Solana DeFi leads activity amid recent SOL price slump

The anatomy of SOL liquidations in the latest market crash revealed that most of them were processed by Solana DeFi, indicating an increasing level of use of on-chain trading

ContentsOn-chain trading dominates SOL liquidationsDeFi ecosystem growth strengthens SolanaWhales increase short positions amid cautious sentimentWhen SOL declined to U.S. $182.60 this weekend, decentralized platforms executed over a hundred times as many liquidations as centralized platforms’ fiscal commerce, demonstrating that Solana can execute financial activity at scale.

Market statistics indicate that the total on-chain SOL liquidations were $37.4 million, which is higher than the $20.9 million decommissioned on centralized platforms. More than $29.7 million worth of liquidations were spotted on centralized exchanges by Monday. This transition highlights how decentralized vs. centralized infrastructure is becoming the main highlight within Solana derivative marketplaces.

On-chain trading dominates SOL liquidations

Decentralized exchanges received more than 79% of the liquidations compared to centralized exchanges. This trend underlines Solana’s increasing potential as a trusted place of DeFi. Phantom wallet is one of the major gateways of derivative traders, and the widespread use of its wallet encourages perpetual futures to be out on the on-chain protocol.

The shift in trading mode to the decentralized token comes after reports that SOL has moved out of traditional platforms in its derivatives. Binance is still the most popular centralized platform, but it is losing its leading position because on-chain interest is increasing.

The on-chain market is dominated by Drift Protocol, which has locked in over $1.19 billion. In the meantime, Hyperliquid recorded SOL open interest of more than 1.2 billion. This makes SOL one of the most active assets on the protocol, even though it is a smaller market in terms of size.

DeFi ecosystem growth strengthens Solana

SOL open interest dropped more than 7% during the weekend drop, but the levels are still healthy. There was a restoration of total open interest up to the $4.98 billion as traders started to re-acquire long positions around the price of a hundred and seventy-five dollars. The short position is congregating just above $200, which suggests a conservative mood.

Solana’s open interest in hyperliquid expanded to a record, as decentralized activity for SOL continued to surpass centralized liquidations. | Source: Hyperliquid

Solana has seen Jupiter and Jito apps return to being the top fee earners. The entry fees are up again, from between $1 million and $2 million, with 2.3 million active users. The Ethereum inflow into the Solana DeFi ecosystem also flamed on, with stablecoins flocking to more than $12 billion.

Another growth was witnessed in Kamino Lend, where almost $3 billion in value is locked. The DeFi ecosystem on Solana is moving away from the area of speculative tokens and into structured financial apps.

Whales increase short positions amid cautious sentiment

According to Hyperliquid data, 70 whales took short SOL positions on August 18 compared to 59 that took longs. Sentiment on the retail and institutional side is bearish and cautious.

Part of the notable position is the 20X levered long position on SOL by the White Whale, which has a nominal value of 79 million. The trade has an unrealized loss of $1.22 million and a liquidation price of 154.59. The trader is in a bull mode, hoping that a breakout will occur.