High SOL staking return is stifling Solana DeFi, pundits sayHowever, the “risk-free” 8.31% return for SOL stakers at the network level — significantly higher than ETH’s 2.98% — may be attracting Solana users away from DeFi activities, such as providing liquidity to automated market makers and lending protocols in exchange for token rewards.“Solana having 65% of its marketcap staked means there's no other use of it's token, it’s actually bearish,” Builda Protocol developer and X user “JC” said.
Solana staking isn’t really staking, Ethereum researcher arguesOne Ethereum researcher said Solana staking isn’t really securing the Solana network because there isn’t a mechanism to penalize bad actors for malicious behavior.“It's very ironic to call it ‘staking’ when there is no slashing.What's at stake? ” Dankrad Feist said in an April 20 X post. “Solana has close to zero economic security at the moment.”Solana Labs said slashing is already possible, but it’s not automatic, and the attacker’s assets can only be slashed by restarting the entire network.
The Solana network briefly surpassed Ethereum in total staked value of their respective native tokens, SOL and ETH, sparking debate over whether it is actually bullish or bearish for Solana. More than $53.9 billion worth of SOL is now staked on the Solana network from 505,938 unique wallet holders, who are making an 8.31% annualized return, blockchain data shows.
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Author / Journalist: Cointelegraph by Brayden Lindrea
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