Key Points:
The perpetual futures funding rate for SOL has turned negative, highlighting a lack of confidence among traders.
Despite strong fundamentals, institutional investors continue to avoid Solana due to MEV issues.
The native token of Solana, SOL, has failed to reach the $180 level since the end of May, leading traders to question whether a bull market will emerge in 2025. The demand for leveraged long positions in SOL has sharply declined, negatively impacting market sentiment.
On Monday (July 7), the funding rate for SOL perpetual futures turned negative, indicating higher demand for short (sell) positions. Given that cryptocurrency traders typically maintain an optimistic outlook on price trends, this shift is relatively rare and suggests a general lack of confidence among bullish investors.
Some analysts believe that SOL's competitive advantage has been weakened by the rapid expansion of Ethereum's Layer 2 ecosystem. Others emphasize that Solana's more integrated user experience remains its strength. Although SOL has declined following the memecoin craze, new use cases have emerged.
Currently, Solana's largest decentralized application (DApp), Jito, holds a total locked value (TVL) of 17.92 million SOL, a 12% increase since January. By providing maximum extractable value (MEV) optimized staking and integrated decentralized finance services, Jito demonstrates Solana's continued innovation without relying on token issuance platforms.
Solana also boasts a staking rate of 66.5%, meaning fewer SOL tokens are available for sale on exchanges. In contrast, less than 30% of Ethereum (ETH) is staked on Ethereum, while Cardano's ADA staking rate is 58%. The current annualized staking yield for SOL is 7.3%, providing strong staking incentives for token holders.
According to a post by SolanaFloor on X, Solana has led all blockchains in network revenue for three consecutive quarters.
In the second quarter of 2025, Solana generated $271.8 million in revenue, reportedly 64% higher than Tron and more than double Ethereum's $129.1 million. Solana's dominance is also reflected in its DApp activity, with users paying $460 million in fees over 30 days. This reflects a healthy ecosystem and encourages developers to build on the platform.
Despite ongoing criticisms regarding transaction failures and high activity concentration, these are intentional design decisions that represent optimization opportunities rather than structural weaknesses. If it were merely bot activity driving up transaction volume, there would be little justification for the $62.6 million in network fees paid in June.
Reportedly, Robinhood's CEO Vlad Tenet stated that building on Solana has been abandoned due to MEV issues, adding that they wish to "have complete control over validators." X user Conduit’s forrestnorwood pointed out that both Coinbase and Robinhood "prefer maximum control, favoring transaction ordering guarantees on their own L2."
If these claims are true and major institutions continue to bypass Solana, it could limit SOL's upside potential. These concerns help explain the waning interest in leveraged bullish positions on SOL and are ultimately related to Ethereum's strategy of incentivizing rollups through extremely low data fees.
The key question facing SOL holders is whether Ethereum will eventually abandon its predatory pricing model and be forced to compete on an equal footing. Currently, the likelihood of SOL returning to the $180 level remains low.
Related: SOL News Update: Bullish Technical Patterns Offset Negative Impact of Solana ETF Delay
Original: “Solana (SOL) Futures Funding Rate Turns Negative: Is $180 the Next Target?”
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