The Solana token (SOL) is facing challenges, including negative futures market dynamics and increasing competition from Ethereum and its L2 solutions. This article examines factors influencing the situation.
Negative Futures Funding Rate for Solana
On Monday, the futures funding rate for SOL turned negative, indicating increased demand for short positions. Typically, cryptocurrency traders are optimistic about price directions; thus, this shift is rare and signals widespread lack of confidence among bullish investors.
Competition from Ethereum and L2s
Some analysts argue that SOL's competitive advantages have diminished due to the rapid growth of the Ethereum Layer-2 ecosystem. Nevertheless, Solana continues to demonstrate innovation through applications like Jito, which reached 17.92 million SOL in total value locked, marking a 12% increase since January.
Solana's Revenue and Market Position
In Q2 2025, Solana generated $271.8 million in revenue, reportedly 64% higher than Tron and more than double Ethereum's $129.1 million. However, there are concerns that high fees may deter large institutional investors.
Given the current market conditions, Solana faces significant challenges such as negative futures funding rates and growing competition from L2 solutions. The future of SOL remains uncertain, and investors are skeptical about the token reclaiming the $180 level.
