Solana Crypto Staked Value Lead Over Ethereum Could Be Short-Lived, Why?

Solana (SOL) crypto briefly surpassed Ethereum (ETH) in the market cap for staked tokens but could be argued the lead was likely to be short-lived.

Solana vs Ethereum Staking Market Caps

The blockchain Solana has overtaken Ethereum to obtain the largest market cap for all blockchains based on staked value.

As of press time, Solana was the largest blockchain by proof-of-stake (PoS) market value.

Developers and investors choose SOL because of its high transaction throughput, low costs, and fast confirmation times; therefore, increasing the staking activity.

SOL tokens les with over 64% of total SOL tokens in staking positions, whereas Ethereum held about 28% of its total in staked assets.

The market capitalization of Solana crypto reached $53.96 Billion while Ethereum’s was $53.77 Billion, stressing on the little margin.

Solana remained popular among developers since its improved performance and postponed deployment of delayed sharding brought users to its network with more than 1,500 dApps.

Improved security features would most likely boost SOL market demand and provide better staking rewards.

The positive market momentum of SOL could stimulate investors to change their investment positioning towards SOL.

The dual advantage of Ethereum’s current leadership in DeFi and upcoming improvements may eventually counter Solana’s position at the forefront of the market.

Solana utilizes scalability to dominate the field, amid Ethereum’s difficulty in implementing updates.

What’s Driving the Surge in SOL Staking

ARK Invest adopted Solana through the SOLQ ETF from 3iQ in both ARKW and ARKF, which became the first U.S.-listed funds to hold Solana positions.

The $5 Million investment from ARK Invest showed a strong commitment to staked SOL as it enjoyed brief market superiority over Ethereum with a $53.96 Billion capital value, passing its $53.77 Billion total.

The total yield at 8.3% represented twice the value of Ethereum’s 2.9%, along with a 65% stakes supply and a growing DeFi sector with $7.08 Billion TVL driving Solana’s market expansion.

The combination of Canada’s supportive ETF regulation approach and Solana’s capability for building decentralized apps drove continued market adoption.

Additionally, savvy traders continued to embrace SOL staking. For instance, a whale unstaked 100K SOL worth $13.9M after 4 years of staking and deposited it to Binance.

Back then, he staked 991,079 SOL at an average price of $27. He has 1.19M SOL worth $166.37 Million staked, with total profits of over $153 Million.

Why Could Solana Crypto’s Lead be Short-Lived

The short-term supremacy of SOL in stake value over ETH could likely fade away as ETH is preparing to launch its Pectra upgrade and possibly approve Ethereum ETF staking.

EIP-7251 will become part of the Pectra upgrade that releases in May 2025 to increase validator maximum effective balance from 32 ETH to 2,048 ETH.

The changed maximum effective validator balance through Pectra enabled validators to bundle their stakes for improved capital utilization and potential network-related performance improvements.

Stakers obtain improved operational enhancements through the update with better validator deposit features combined with execution-layer-triggered withdrawal functionality.

A reviewing process at the U.S. Securities and Exchange Commission (SEC) aims to accept staking methodologies within Ethereum ETFs.

This approval would enable ETF investors to claim staking rewards, thus stimulating ETH demand while promoting more participants to stake their assets.

Future advancements could strengthen staking on Ethereum to the point where it might become equally attractive or more so than Solana across its present competitive position.

Also, the SEC’s nod and other decisions regarding ETFs could determine the actual outcome. Meanwhile, adoption rates could directly influence how this situation would unfold.

The outcome depends on various aspects, as Ethereum has implemented systems to improve its staking attractiveness.

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