What is Solana ?

Solana is a blockchain platform designed to host decentralized, scalable applications. Solana can process many more transactions per second and charges lower transaction fees than rival blockchains like Ethereum.

Solana uses a proof-of-history consensus mechanism. This algorithm uses timestamps to define the next block in Solana's chain. Most early cryptocurrencies, such as Bitcoin and Litecoin, use a proof-of-work algorithm to define the blocks in their chains.

What is Decentralized Staking ?

DeFi staking involves locking one's crypto tokens into a smart contract in an effort to earn more of those tokens in return. Consider it the decentralized equivalent of putting your money in a bank fixed deposit.

Proof of Stake (PoS) involves network participants “staking,” or locking up their crypto assets, in exchange for becoming validators of the blockchain. Validators are randomly selected by the network to verify the blockchain. PoS validators are similar to PoW miners, but instead of work, their “stake” allows them to validate the network.

Validators make themselves available by staking their cryptocurrency and then they are randomly selected to propose a block. The proposed block needs to be attested by a majority of the other validators. Validators profit by both proposing a block as well as attesting to the validity of others’ proposed blocks.

With a proof-of-stake system, the more coins you have, the more voting power you have, and those with the coins are also the ones earning the new coins from staking. Since they don’t need to expend resources to stake, they can simply increase their overall staking amount as they earn ongoing coins from staking rewards, and exponentially grow their influence on the network over time, forever. Network dominance tends to lead to more network dominance, in other words.

FTX, Alameda and Solana Ecosystem

In recent days, the cryptocurrency market experienced one of its darkest days in the history because of FTX Exchange and Alameda Research company (both foundend and managed by Sam Bankmank-Fried) crisis. many tokens have experienced massive decrease in their price including Bitcoin that has dropped of to $16000 for a while.

Because of heavy investment of Alameda Research on SOL, This token has experienced one of its highest drop in price to the extent that in just 2 days, SOL price has decreased from $38 to $12!

The epic comedown of Sam Bankman-Fried’s FTX crypto exchange and Alameda Research trading firm is making waves in the market for the Solana blockchain’s SOL token – to the point where some investors have apparently become so nervous that they’re demanding back tokens they had “staked” or deposited into the blockchain’s underlying security protocol. Earlier this week, when concerns started to grow over the state of the two businesses’ finances, crypto market analysts began to speculate that Alameda might need to sell some of its SOL tokens to raise liquidity. The fears sent the SOL price tumbling – as traders rushed to get ahead of the selling pressure.

Apparently, the dynamic has risen to another level: Solana validators who provide security to the blockchain were set to unlock nearly $800 million worth of their SOL holdings as the end of the token lock-in period known as “Epoch 370” approaches.

“A reduction in the amount of SOL staked might indicate that investors are looking to sell all or part of their position,” Sean Farrell, head of digital asset strategy at research firm FundStrat wrote in a note on Tuesday evening following the bailout news. “Due to these factors, we think it is wise to reduce exposure to Solana (SOL) in the immediate term.”

Solana Compass’ blockchain data showed that about 55 million SOL tokens, worth around $776 million, are scheduled to unlock. There’s about 76% of eligible SOL tokens currently being staked on the blockchain. The scheduled unlocked tokens represent around 15% of the token’s circulating supply in a single unlock.

Solana’s price drop accelerated Tuesday as the giant crypto exchange Binance first said it intended to buy FTX and continued Wednesday as CoinDesk reported that Binance was leaning toward not completing the takeover. Last week, CoinDesk reported that a copy of Alameda's balance sheet showed that the firm held $292 million of “unlocked SOL,” $863 million of “locked SOL” and $41 million of “SOL collateral.”

SOL’s funding rates sharply dropped as low as -4% on Wednesday in anticipation of the unlock, according to Coinglass. FundStrat’s Farrell said he expected there is an ability for the Solana ecosystem to “eventually recover and remove itself from Alameda’s shadow.” “But the current liquidity overhang is quite substantial,” he said.

Summary and Conclusion

• During the last week, the number and volume and also the average volume of unstake actions were more than stake and deposits. Also, we have seen there were even more claiming reward volume than stake deposits. This shows that users tent to access their staked/unclaimed SOL in order to be able to sell it to not lose more money!
• The number and volume of unstake and withdrawal actions and also order to unstake tokens has increased dramatically after 7th November and these type of actions have already the highest share among all other type of actions and stake/deposit actions share has decreased dramatically as time goes on.
• Most volume of SOL was unstaked on 10th November and also the highest unclaimed reward from staking was claimed on this day.
• During the past week, the highest SOL was unstaked from Lido stake pool. On the other hand, Marinade users had to firstly "Order to Unstake" their staked assets but have already claimed their unclaimed reward.
• During the past week, the highest sol was staked/deposited into the Marinade stake pool but totally the number and volume of stakes (as mentioned) is way less than unstakes and even decreased more after 10th November.
• Everstake validator had the highest number of stakes and stakers, unstakes, unstakers during the past week and was on the second rank after Figment validator in terms of volume of stakes. the validator: hz5alvpkscnwoe9yzwxblrqa3qzhjivbgtfcimekk8m5 had the highest volume of unstakes.
• The volume of claiming rewards of an average Solana staker is more than all other his/her actions but the number of Unstake actions is more than his/her other type of actions.
• The wallet address E9Y6mP85iRWkx47m6THG7SaedLhV1TtDF83zipzjDZ9P has performed the most number of stakes and also Unstake sduring the past week .
• The wallet address UefNb6z6yvArqe4cJHTXCqStRsKmWhGxnZzuHbikP5Q has by far performed the highest stake volume and the wallet 2KEtADJXkXZReaokRU9ARWex2sYCDhmVfN4KiHa9vhh1 has unstaked the highest volume during the past week (159k SOL)
• There was a quite positive correlation between Solana staking/unstaking behaviour and Swap & bridging activity of users during the past week.

Totally, The above analysis showed us that users are losing their trust to the whole Solana ecosystem and also to its native token, SOL, because of its massive collapse during the past week and also because of its several frequent halts and hacks happening on this chain.

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Methodology

In this dashboard, I am going to analyse How has staking pool behavior on Solana responded to above-mentioned events?

For this purpose, I am going to mainly use Flipside’s new staking pool table (solana.core.fact_stake_pool_actions) and also solana.core.ez_staking_lp_actions (for validators analysis).

There are several action types on the action column of _stake_pool_actions table. So, I am going to define all actions which are related to deposit or stake as “Deposit/Stake” actions.

all actions which are related to withdrawal as “Withdrawal/Unstake'“ actions. Also, there is action order_unstake which is related to when a user wants to unstake his/her deposited SOL and ofcourse it has no volume. and another action named ‘claim’ which is related to claiming staking rewards.

In this dashboard, the timespan is from 7 days ago till today and we are only considering Successfull transactions.

After analysis of staking pools and behaviors, I am going to check Solana swaps and bridging activity during this timespan.

According to the above charts, the number of stakes and depositos during past week is more than all other action types. But, if we sum the Unstake/Withdraw numbers + Order to Unstake actions, we can see the number of unstake actions is more than Stake and Deposits.

But in terms of volume, we can see the total unstake volume is way more than stake/deposit actions (volume chart is logarithmic so the difference is way more than what you see). moreover we can see the volume of claiming rewards is also way more than stake and deposit actions and this shows that user tend to access their SOL with any possible way (withdraw/claiming reward) as soon as possible!

On the above left chart, we can see the share of high volume transactions (with more than 100 SOL) on Unstake and Claiming reward actions is way more than Stake and deposits. (as mentioned above, order to unstake has not a volume because its an order action!)

Moreover, on the 2 other charts, we can see the average daily volume of Unstake and WIthdrawals and also Claiming reward actions is way more than stake and deposits. but, the average daily number of deposit/stake actions and its users is more than other type of actions.

On the above charts, we can see quite increasing activity of all type of actions during past week over time. The highest activity have achieved on 8th and 9th November and the highest volume of actions have achieved on 10th November

Moreover, we can see after 7th November, there is a huge increasing share of Withdrawal/Unstakes and also Order to Unstake actions and volumes and this means ppl have started to unstake their SOL since 7th November.

On the other hand, we can see decreasing share of stake and deposit actions as time goes on.

Based on the above charts, Lido and Marinad are the top SOL stake pools with the highest number and also volume of actions during the past week (and all time).

When staking on Marinade, ppl firstly have to “order to unstake” their asset but on Lido, the unstake process is way faster.

So, we can see the highest volume of unstake during the past week belong to the Lido pool while activity on Marinade is more at stake/deposits and also claiming rewards and order to unstake.

Based on the above charts, the majority of Stake and Deposit actions during the past week (in both terms of number and volume) belong to the Marinade stake pool.

There was a high spike of stake activity during 8th and 9th November but after these dates, we can see quite decreasing number and volume of stake actions on pools.

But in terms of Unstake, as mentioned earlier, we can see Lido is the top performing stake pool.

The number and volume of unstake/withdrawals has increased significantly since 8th November to the extent that this day has the highest average volume of unstakes. the highest spike of unstake (both number and volume) has achieved on 10th November.

Totally, with a simple comparison of these Unstake charts vs the previous stake charts, we can see huge difference in transactions volume (unstake is way more)

Validators Stats

On Solana, stake pools are a collection of one or more validator nodes.

In this part, I have analysed the validators behaviour during past week using solana.core.ez_staking_lp_actions table to see which was most affected.

Overall Stats

Stake Pools Stats

Based on the left charts, the everstake validator had the most number of stakes and stakers and the second volume of stakes during the past week.

While, the Figment validator had the highest stake volume.

Also on the left chart, we can see the Everstake validator had the most number of stake and stakers in almost all days among other top validators of each day.

But in terms of volume, we can see different results and there are various validators which had the high volume of stakes during the past week.

Everstake validator has also the highest number of Unstakes and Unstakers during the past week.

But the validator: hz5alvpkscnwoe9yzwxblrqa3qzhjivbgtfcimekk8m5 had the highest Unstake volume.

We can also see there is very high difference between number and volume of unstakes from validators & stakes to them (unstakes are way heavier and more)

On the left chatrt, we can see Everstake validator has the highest share of unstake and unstakers during the past week in majority of days.

But in terms of volume, similar to the stakes, we can see various number of validators on the top 10 list of each day.

On the left chart, we can see the average Claim reward volume of an average Solana staker during the past week is more than all other actions.

Moreover, we can see the number of Unstake/Withdrawal actions by a user is more than all other actions.

The interesting thing is that the wallet address E9Y6mP85iRWkx47m6THG7SaedLhV1TtDF83zipzjDZ9P has also performed the most number of Unstake actions.

2KEtADJXkXZReaokRU9ARWex2sYCDhmVfN4KiHa9vhh1 has performed the highest unstake volume during the past week (more than 159k SOL).

Other DeFi Activity on Solana

In this part, I am going to link Staking behaviour action and the Swaps and Bridge activity on Solana ecosystem during the past week collapse.

Swaps

Based on the above charts, Similar to the stake and unstake behaviors, we can see increasing number and also volume of swap transactions on the Solana ecosystem after 8th November and with the highest spike (similar to the Stakes) on the 10th November.

Based on the above charts, we can see the huge increasing activity of swaps to and from SOL token to other assets since 8th November. highest number of SOL swaps achieved on 8th November but the number of swappers and also volume of swaps on 9th November is more than other days. In addition, we can see quite increasing trend of average SOL Swaps volume as time goes on to the extent that on 10th November, we can see highest spike of average SOL swaps volume.

Moreover, we can see as time goes on , the number of swaps from SOL to other tokens is increasing dramatically.

So, we have seen there is positive correlation of swaps vs stake and unstake actions on Solana during the past week.

On the left chart, we can see as time goes on, the number of swaps with less than 10 SOL volume is increasing in both swap from and to SOL.

Bridging

On the above charts, we can also see quite increasing number and volume of bridges from Solana to the Ethereum since 7th November. Maybe this can be users have lost their trust on Solana and tend to bridge their assets to a more safe blockchain like Ethereum.

Also, we can see a significant increasing share of USDC (and also all other assets which are also being hosted on EthereuM) bridges from Ethereum to Solana after 2nd November.

Users

The wallet address E9Y6mP85iRWkx47m6THG7SaedLhV1TtDF83zipzjDZ9P has performed the most number of stake transactions during the past week but the stake volume of UefNb6z6yvArqe4cJHTXCqStRsKmWhGxnZzuHbikP5Q is way higher than all other users.