According to statistics provided by StakingRewards, Solana (SOL) has exceeded Ethereum (ETH) in staking market capitalization, reaching a total of $53.15 billion compared to Ethereum's $53.72 billion.
This development has triggered intense debates on the social media platform X, leading people to question whether this marks a significant moment for Solana or just a temporary surge.
Solana's growth has outpaced Ethereum due to the attractive high staking returns it offers. Recent data shows that 64.86% of Solana's total supply is currently staked, yielding an annual percentage yield (APY) of 8.31%. In contrast, Ethereum has only 28.18% of its supply staked, with an APY of 2.98%.
The difference in staking ratios highlights Solana's increasing popularity among investors seeking passive income from staking. Solana's staking market capitalization is calculated by multiplying the total number of staked tokens by their current price. With SOL priced at $138.91 currently, Solana has officially surpassed Ethereum in this aspect.
However, the high staking ratio of Solana has brought about some controversy. Critics, like Dankrad Feist on X, argue that Solana's absence of a slashing mechanism (penalties for validator violations) weakens the economic security of its staking model. In contrast, Ethereum, with its slashing mechanism, offers more security despite having a lower staking ratio.
The notable activity of large investors, known as "whales," has added to the intrigue around Solana. Recent withdrawals and accumulations of significant amounts of SOL by various entities indicate mixed sentiments among institutional investors and whales, affecting the fluctuating Solana price.
As of the latest data, SOL is trading at $140.49, showing a 3.53% increase in the past 24 hours. Key price levels to watch for include $129 as crucial support and $144 as a significant resistance level that could pave the way for Solana to reach new highs.
The Solana community is eagerly anticipating key announcements from the upcoming Solana Breakpoint conference, with potential positive impacts on SOL's price trajectory. Despite its success in staking market capitalization, Solana faces hurdles such as competition with Ethereum's mature DeFi ecosystem, institutional trust, and security measures.
The crypto community remains divided over whether Solana's rise signifies a lasting breakthrough or just a momentary buzz, as it challenges Ethereum's dominance in the crypto space.