Illustrative photo for news about Solana. Source: photo_gonzo - stock.adobe.com

Key Takeaways:

Solana briefly surpassed Ethereum in staked value with over $53.9B in SOL staked, driven by a sharp rise in the SOL/ETH ratio.
Critics argue Solana’s high staking yield discourages DeFi activity, with Ethereum maintaining a strong lead in DeFi TVL and liquid staking.
Solana faces scrutiny over its weak slashing mechanism, while Ethereum’s staking model raises centralization concerns due to reliance on services like Lido.

Solana briefly surpassed Ethereum in total staking market cap on April 20, with over $53.9 billion worth of SOL staked, slightly edging out Ethereum’s $53.93 billion.

This development, driven largely by a tenfold increase in the SOL/ETH price ratio over the past year, sparked debate within the crypto community.

SOL just flipped ETH in "staking market cap". pic.twitter.com/bhbrPFsoFB
— Alex Svanevik 🐧 (@ASvanevik) April 20, 2025

While some hailed the moment as a sign of Solana’s growing strength, others cautioned that its high staking yields—currently at 8.31%—may discourage DeFi participation due to better returns from staking alone.

Critics also highlighted risks in Solana’s staking design.

Unlike Ethereum, which enforces automatic slashing to penalize malicious validators, Solana’s slashing mechanism is rarely used and requires a full network restart.

Solana Labs plans to improve this in 2025 with a proposed “correlated slashing” model.

Meanwhile, Ethereum dominates DeFi, with $50.4 billion in total value locked (TVL) compared to Solana’s $8.85 billion, and leads in liquid staking, though centralization concerns have emerged, with Lido controlling 88% of Ethereum’s liquid staking market.

Ultimately, while Solana’s flippening is notable, it underscores the complexities and trade-offs in both networks’ staking and DeFi ecosystems.