Over US$520mln worth of Solana (SOL) was withdrawn by Solana’s proof-of-stake (PoS) validators today, with a further US9.3mln already set for withdrawal at the next epoch due in two days.
Staking is the process of validating the Solana blockchain network, and large-scale withdrawals cause two major problems.
With less SOL being staked by Solana’s validators, the network becomes less efficient and more susceptible to exploits
When validators capitulate, the market gets diluted with SOL tokens, causing downward pressure on the coin
Stake capitulation is undoubtedly contributing to SOL’s plummeting price, which has already dipped 50% in he passed day.
Crypto exchange Kraken is one SOL whale rushing for the exit.
Nearly 11% of Kraken’s stake is due to be withdrawn at the next epoch for a net change of -7.87%.
Kraken capitulates– Source: Solana Compass
However, while some stakers are rushing for the exit, this actually presents an opportunity for those sticking around.
Fewer stakers at play means a greater share of the staking rewards.
Top Solana stakers are currently enjoying average returns of around 8.3%, up nearly 43% month on month.
SOL stakers get bonus as others capitulate – Source: stakesolana.app
SOl’s price has recovered in the past couple of hours, with market capitalisation heading back above US$6bn, thus bringing the network up from 15 to 12 on the global charts.