Solana’s present funding fee sits at -0.0002%, signalling brief strain.
Solana DEX volumes fell behind Ethereum earlier this yr.
Accumulation of SOL suggests long-term investor confidence stays.
Commonplace Chartered has cautioned that Solana (SOL) may underperform Ethereum (ETH) as a consequence of fading meme coin exercise, a key driver of Solana’s on-chain quantity in latest quarters.
Whereas Solana has confirmed its technical capabilities, notably through the latest meme coin buying and selling growth—the financial institution now sees a threat of underutilisation as seasonal developments shift.
In keeping with the financial institution’s Head of Digital Property Analysis, Geoff Kendrick, Ethereum’s broader adoption and institutional partnerships place it in a stronger place for sustained progress.
Ethereum features from broader use instances
Solana has typically been positioned as a quicker and cheaper various to Ethereum, with the flexibility to deal with excessive transaction volumes at low value.
Nevertheless, Commonplace Chartered factors out that a lot of this exercise has been pushed by short-term buying and selling of meme cash, a sector identified for its volatility and restricted utility.
With meme coin enthusiasm cooling off in 2025, Kendrick initiatives a attainable utilization hole for Solana earlier than different purposes, equivalent to decentralised finance platforms, gaming initiatives, or social media integrations, acquire vital mass.
The financial institution says Ethereum’s benefit lies in its diversified person base, which incorporates enterprise-level purposes, monetary merchandise, and long-term good contract growth.
Blockchain analytics additionally helps this view. Earlier this yr, Ethereum overtook Solana in decentralised trade (DEX) buying and selling volumes after a hunch in buying and selling on Raydium (RAY) and Pump.enjoyable, two of Solana’s most energetic meme coin platforms.
That shift underlined Ethereum’s dominance throughout a number of sub-sectors of the blockchain house.
Market sentiment displays short-term Solana dangers
Traders seem like reacting to those alerts. In February, merchants started trimming publicity to Solana-based property as a consequence of uncertainty over the way forward for meme coin initiatives and delays in scaling up main Solana-native protocols.
Commonplace Chartered says these issues are actually being priced into market forecasts, notably when it comes to income from transaction charges and new person onboarding.
One key indicator is Solana’s funding fee. In keeping with blockchain information agency Glassnode, Solana at the moment has a adverse funding fee of -0.0002%, the one such determine among the many prime 10 cryptocurrencies by market capitalisation, excluding stablecoins.
A adverse funding fee means brief sellers are paying charges to carry bearish positions, which generally signifies mounting downward strain on value.
Nevertheless, a adverse funding fee can typically be a contrarian indicator. Merchants could also be anticipating a brief squeeze, the place sudden upward value strikes power shorts to purchase again their positions, doubtlessly creating a pointy rally.
BeInCrypto studies that the buildup of SOL by institutional gamers in Could means that long-term buyers should see worth in Solana, even when near-term efficiency lags Ethereum.
Analysts say Ethereum stays the dominant layer-1
Whereas Solana has demonstrated fast progress and strong technical infrastructure, analysts from IntoTheBlock imagine the community nonetheless has vital floor to cowl earlier than difficult Ethereum’s dominance.
The analysis group mentioned that though Solana might proceed to develop and goal area of interest purposes, surpassing Ethereum stays a long-term objective slightly than an imminent milestone.
Ethereum’s integration with conventional finance, widespread developer assist, and upgrades just like the shift to proof-of-stake have helped entrench its place because the go-to blockchain for decentralised purposes.
Till Solana’s subsequent wave of real-world use instances features momentum, Commonplace Chartered believes the community’s value and on-chain exercise might proceed to path Ethereum.
Because the market matures, each blockchains might discover house for progress—however within the brief time period, Ethereum’s ecosystem breadth and investor confidence give it the sting, in keeping with the financial institution’s newest evaluation.
