The post Is Solana’s $10B liquidity drain a sign of trouble for SOL? appeared on BitcoinEthereumNews.com.

Solana has burned over $10 billion in value in just six months, more than its entire TVL. Is SOL climbing on solid ground, or just flying on fumes? May brought plenty of chop to the crypto market, but Solana [SOL] had it worse than most, dropping about 10% and underperforming the rest of the high-caps.  That said, with the market starting to stabilize, SOL has already bounced back 5% at press time. It looks like strategic investors are beginning to reposition, eyeing the next major resistance as the potential breakout zone. But under the surface, liquidity dynamics are shifting, and not necessarily in Solana’s favor. According to AMBCrypto, unless that trend reverses, this rally might not have the legs to last. Riding high on thin liquidity, but for how long? Liquidity is the lifeblood of Solana. It fuels user activity and acts as sidelined capital ready to deploy. Most Layer 1s tighten supply the old-school way: By burning tokens, sending them to dead addresses to fight inflation. But Solana’s $10 billion “burn” over the past six months is anything but traditional. This isn’t just about reducing supply. Instead, it’s about value being siphoned out of the system. Take Pump.fun, for instance. It has pulled over $700 million SOL into memecoin launches. While these short-lived tokens attract liquidity fast, much of that value vanishes just as quickly, never recycling back into core DeFi.  Meanwhile, a significant portion of this loss comes from MEV (Maximal Extractable Value) strategies. In fact, it’s estimated that up to 30% of Solana’s daily TVL gets drained this way during peak periods. Source: DeFilLama But the most concerning part? The $10 billion burned exceeds Solana’s current Total Value Locked (TVL) of $8.822 billion.  That means the network is operating at a net liquidity loss, where more value…

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Filed under: News - @ June 10, 2025 10:21 am