A negative funding ratio of SOL indicates a fall in demand for SOL

Main Receptors:

Funding volume for Solana Perpetual Futures has turned negative, indicating demand for weak positions. Rival networks like Base and Hyperliquid pose a direct threat to Solana by aggressively capturing DEX market size.

Solana's native token SOL (SOL) faced a 15% correction after declining at $98 on May 11. A retest of the $83 level on Tuesday was followed by negative futures volume, indicating increased demand for short SOL positions.

As the decline in network activity contributes to falling prices, competition between rival blockchain networks has increased.

SOL Sustainable Future Annual Funding Amount. Source: Simplicity

SOL perpetual futures funding stood at -3% on Tuesday, down significantly from +8% on Saturday. In neutral market conditions, this indicator hovers around +9% for capital expenditure and exchange risk. Bullish demand has largely been absent since Saturday when the SOL price dropped below $90.

Solana DEX activity has decreased by 56% since January

Reduced activity on Solana's decentralized exchanges (DEXs) has reduced ecosystem revenue and demand for SOL. This decline in appetite for decentralized applications (DApps) was not limited to Solana, but growing competition poses a major concern, as investors fear that demand for memecoins has faded for good.

Solana Weekly DEX Volumes, DApps Earnings, USD. Source: Defillama

Solana's DAP revenue is steady around $20 million per week, down from an average of $35 million in January. This activity closely mirrors the trend of the network's DEX activity, which currently stands at $11 billion per week, compared to the January average of $25 billion. The 30-day DApp revenue leaders on Solana are Pump, Axiom Pro, Phantom and Jupiter, which have a combined 65% market share.

Blockchain is ranked weekly by DApps revenue market share. Source: Defillama

Despite intensifying competition, Solana remains the top blockchain for DApp revenue. Hyperliquid created a direct threat because of it Predominance in perpetual contractsProviding a high-throughput solution with core business features built directly into the consensus layer. Meanwhile, Ethereum's Layer-2 network base offers seamless integration into the Coinbase ecosystem.

In terms of Total Value Locked (TVL), Solana ranks second at $5.9 billion, followed by BNB Chain at $5.5 billion and Base at $4.5 billion. DX platforms and DAP applications such as Jupiter, Camino, Sanctum and Radium lead Solana's TVL. Still, no blockchain threatens Ethereum's $43.2 billion TVL, which relies on collateralized loans and liquid reserves.

Impersonation functionality that can occur on Solana network DApps

Solana's footprint in the DApp industry cannot be understated, but the network's low fees provide the perfect opportunity to generate maximum leveraged value (MEV) botting and leveraged activity.

Related: Goldman Sachs exits exposure to XRP, Solana ETF in Q1 2026

Source: X/Luccannon727

X user lucannon727's 1,600 addresses are reported to be responsible for 63% of volumes on the synthetic asset trading platform operating on the Solana network. According to the analysis, those entities presented balanced trading activity, high execution frequency and minimal net losses. These findings are highly consistent with arbitrage activity, but may also indicate volume congestion.

The recent weakness in SOL prices may be due in part to declining DApp demand and increased competition, particularly from Hyperliquid and Base. The eventual bull run seems to be heavily dependent on picking up DEX activity, especially the memecoin trade. However, at the same time, there is no indication that SOL will retest the $78 level last seen in early April.