Solana December 2024 Update

Momentum Metrics

Solana registered $348M in net inflows from other ecosystems in December 2024. This figure was only surpassed by Base and Hyperliquid, which saw $1B and $711M in net inflows, respectively. The three largest source and destination chains for Solana inflows/outflows were Ethereum, Arbitrum, and Sui. Most likely, flows to Arbitrum were subsequently bridged to Hyperliquid. Boccaccio, an Analyst at Blockworks Research, wrote a note on attention shifting to Base and Hyperliquid last month, with this flow data supporting his thesis.  

Regarding market positioning, SOL open interest across centralized exchanges fell 25% to $4.5B, reflecting significant de-risking. Similarly, funding rates are back to pre-election levels after surpassing 50% annualized at the beginning of December. Historically, when funding rates get so high, the market is usually overextended and near a local top.  

Network Health

Despite congestion issues in the early part of the year, Solana registered its best year in terms of network performance. Still, there is much room for improvement, with Firedancer, increased block space, and other network changes coming in 2025.