Key takeaways:
- Solana perpetual futures funding rates turned negative, signaling excessive bearish demand.
- Rival networks such as Base and Hyperliquid pose a direct threat to Solana by aggressively taking over DEX market size.
Solana’s native token, SOL (SOL), saw a 15% correction after the May 11 rejection at $98. Following a retest of the $83 level on Tuesday, futures funding rates were negative, indicating increased demand for brief SOL positions.
While degenerating network activity has contributed to falling prices, competition between competing blockchain networks has increased.
SOL Perpetual Futures Annual Funding Rate. Source: Lightness
The SOL perpetual futures funding rate was -3% on Tuesday, down significantly from +8% on Saturday. In neutral market conditions, this ratio fluctuates around +9% to take into account the cost of capital and currency risk. Demand for bullish leverage has been largely absent since Saturday, when SOL fell below $90.
Solana DEX activity has dropped 56% since January.
Declining activity on Solana’s decentralized exchanges (DEXs) has reduced ecosystem revenues and demand for SOL. This decreased appetite for decentralized applications (DApps) hasn’t been unique to Solana, but increasing competition poses a grave threat as investors fear that demand for memecoin will decline for good.
Solana Weekly DEX Volumes, DApps Revenue, USD. source: DefiLlama
Solana DApp revenue stabilized at near $20 million per week, compared to an average of $35 million in January. The move closely mirrors the network’s DEX activity trend, which is currently at $11 billion per week, compared to January’s average of $25 billion. The 30-day DApp revenue leaders on Solana are Pump, Axiom Pro, Phantom and Jupiter, with a combined market share of 65%.
Blockchain Ranked by Weekly DApps Revenue Market Share. source: DefiLlama
Solana remained the largest blockchain by DApp revenue despite increasing competition. Hyperliquid posed an immediate threat due to its properties dominance in perpetual contractsoffering a high-throughput solution with core trading capabilities built directly into the consensus layer. Meanwhile, Ethereum’s Layer 2 network base provided seamless integration into the Coinbase ecosystem.
In terms of total value locked (TVL), Solana secured the second spot with $5.9 billion, followed by BNB Chain with $5.5 billion and Base with $4.5 billion. DEX platforms and staking DApps such as Jupiter, Kamino, Sanctum and Raydium lead Solana’s TVL. Still, no blockchain threatens Ethereum’s $43.2 billion TVL, which relies heavily on collateralized loans and liquid stakes.
Potential spoofing activity of Solana Network DApps
Solana’s presence in the DApp industry cannot be overstated, but low network fees present a prime opportunity for maximum extraction value (MEV) bots and inflated activity.
Related: Goldman Sachs Exiting Exposure to XRP, Solana ETF in Q1 2026
Source: X/lukecannon727
User The analysis shows that these entities were characterized by sustainable trading activities, high execution frequency and low net losses. These findings are highly consistent with arbitrage activity, but may also indicate volume spoofing.
SOL’s recent pricing weakness can be partially attributed to a broader decline in DApp demand and increased competition, particularly from Hyperliquid and Base. An eventual bull run appears to be largely dependent on an raise in DEX activity, particularly in memecoin trading. At the same time, however, there is no indication that SOL should retest the $78 level last seen in early April.
