Solana Leads in Capital Inflows Despite Declining Activity as Chain Competition Intensifies

May has been a month of mixed blessings for Solana . While the network saw a major inflow from centralized exchanges, to the tune of $1.1 billion—that’s the most since 2024; its on-chain transaction activity keep declining. Now, two key things here: 1. The inflow is a sign that investor interest is on the uptick, at least. 2. The fact that transaction activity on the chain is going down in spite of this inflow signals a divergence between investor interest and network utility that is rarely seen. BREAKING: @Solana saw an inflow of $1.1 billion from centralized exchanges in May alone, the largest monthly inflow since 2024. pic.twitter.com/Fh9eIZkBIx — SolanaFloor (@SolanaFloor) May 27, 2025 And from where I’m sitting, that ain’t great. Solana Sees Historic Inflows Amid Transaction Decline In May, Solana drew in an astonishing $1.1 billion in capital from centralized exchanges, cementing its status as a go-to blockchain for institutions and retail investors. This figure represents the highest monthly inflow recorded since 2024 and occurs during a period when the entire crypto sector seems to be favoring high-throughput, low-fee chains. Even with this strong indication, Solana’s transaction volumes tell another tale. Per the data of OKX Explorer covering May 18 to 24, Solana carried out 2.37 billion transactions, down 8.24 percent week-over-week. This was the third week in a row of Solana having less “activity.” Even though this statement does not carry a good connotation, it does not make Solana’s numbers look bad at all. In fact, the number of raw transactions that Solana handles is vastly greater than those of competing chains. And even with these “bad” numbers, Solana is still a blockchain that you would want to be a part of. This divergence raises some big issues. Is it the case that users are becoming less active at the same time that capital is rushing into the ecosystem? We could be looking at something totally normal and healthy, with all this new money speculating on the ecosystem, in anticipation of upcoming applications or market catalysts—rather than something that’s representative of any sort of growth in everyday usage of Solana right now. On the flip side, if this new money is representative of actual new use cases for Solana, then where are all these new users of upcoming applications participating in Solana’s ongoing speculative economy? Competitors Catching Up as Solana’s Grip Weakens While Solana’s on-chain activity is decreasing, other blockchain networks are getting more active. The standout is clearly BNB Chain, which saw 53 million transactions last week—up 5.36 percent from the prior week. This was its third consecutive week of positive growth, with transaction activity rising 54 percent, then 2 percent, and now another 5 percent. BNB’s Chains steady climb should be interpreted as a rise in user engagement, which might be driven by DeFi applications, token launches, or the still-growing number of Binance-led initiatives. Polygon also had a strong showing, amassing 24.7 million transactions and vaulting 9.31 percent over the week. That comes on the heels of a three-week run totaling an 18 percent increase, putting Polygon atop the mid-tier performer ranking. Top 8 Chains by Weekly Total Txn OKX Explorer | May 18-24 Weekly Trends: @solana : 2.37B (-8.24% WoW) — Drop for 3 consecutive weeks; dominance erodes further. @fractal_bitcoin : 91.8M (-7.82% WoW ) — Volatility spikes after +2% rebound last week, but still holding a… pic.twitter.com/ACzNJYSYPb — OKX Explorer (@okxexplorer) May 27, 2025 Its low fees, along with its compatibility with Ethereum-based tools, keep developers and users piling into the ecosystem, with that flood largely dominated by the gaming and NFT sectors. At the same time, Base—the Ethereum Layer 2 created by Coinbase—had 59.3 million transactions but a 5.95 percent drop. This marked the halt of a five-week growth streak and may have signaled the beginning of a short-term correction. Base is still new, and this is a relatively calm period for it, which is tied closely to the destiny of Coinbase and what it decides to integrate and do in the future. Broader Ecosystem Faces Volatility and Fluctuation Other notable chains experienced similar conditions. Fractal Bitcoin, a volume-driven but not particularly “run-of-the-mill” platform, executed 91.8 million trades—a 7.82 percent drop after a minor rebound the prior week that hardly deserves mentioning. Even with that close-to-static status, Fractal Bitcoin retained its total-ahead-of-totals status versus Solana by remaining a stricter rule-following platform. Thus, among second-tier platforms, Fractal Bitcoin seems the most likely candidate for a kind of “pause that refreshed” scenario. Sui Network and Aptos, two younger Layer 1 blockchains, both continued to have some headwinds. Sui dropped another 2.87 percent in weekly transaction count, bringing its three-week decline to 9 percent. Aptos remained mostly flat at 26 million transactions, offering very little indication of renewed momentum after a brief stabilization phase. Tron also saw a setback hit it, with its 24.7 million weekly transactions coming in at an 8.05 percent drop. This netted out the week-before gains, and in the end, it highlighted the erratic nature of user activity on old, high-throughput chains. Even though transaction activity is down, inflows to Solana are at an all-time high. This must mean that there is still confidence in the Solana network, and confidence in it as a long-term vehicle for value. Solana is up against some stiff competition, though. The performance of not just Solana but all Layer 1 networks will be closely scrutinized in the coming weeks to see if they can maintain their upswell of interest and not just be faddish at the Layer 1 level while Layer 2 is winning the competitive race. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news !

Source: NullTx