$BNSOL Claims Solana’s LST Crown Amidst DeFi Deposit Flight

With DeFi users losing trust in the onchain economy amidst a litany of destructive exploits, centralized exchanges are stepping in to assert their dominance. 

While Solana’s LST rate has dropped 6.8% YTD, Binance’s $bnSOL is only growing its influence, flipping rivals to become the network’s biggest LST by market cap.

Meanwhile, Solana’s $SOL-denominated TVL is struggling to find its feet, dropping 12.9M $SOL since the April 1st Drift hack.

$BNSOL Market Cap Climbs to $918M

Binance, the world’s largest crypto exchange, now also operates Solana’s biggest LST by market size. Based on Blockworks data, $bnSOL’s market cap has risen to over $918M and now represents 17% of Solana’s LST supply.

But despite its size, $bnSOL distribution is still significantly smaller than other leading operators. While $bnSOL is held in 13,999 wallets, onchain data indicates that rival LSTs like $jitoSOL and $mSOL are distributed across 187,965 and 146,429 accounts, respectively.

Beyond a much broader distribution, no doubt aided by the tenure of older assets, Solana’s stable LSTs enjoy much wider usage across the DeFi economy. 96.8% of all $bnSOL is held in just three Binance-controlled wallets. Comparatively, the top ten $jitoSOL and $mSOL wallets respectively hold 33.41% and 47.99% of supply.

The high concentration of $BNSOL holdings in Binance-controlled suggests that these funds are held within the exchange itself, rather than being deployed across Solana DeFi. $bnSOL’s recent growth could also be attributed to a lack of trust in the onchain economy, with holders preferring to stake their funds on centralized exchanges.

Solana LST Rate Down 6.8% YTD

Reinforcing the belief that stakers are seeking to reduce their risk, onchain data indicates that LST penetration on Solana is steadily shrinking. For the first time since December 2022, Solana’s LST rate has dropped for three consecutive months.

Based on Blockworks data, Solana’s LST rate has fallen 6.8% YTD, dropping 1.05% percentage points in the slide from 15.43% to 14.38%.

While this may seem like a negligible drop, it marks a dramatic change in trajectory for LST growth, which has largely trended upwards since the network launched in 2021. 

DeFi TVL Drops 12.9M $SOL in April

April has been a particularly harsh month for DeFi enthusiasts, with the multichain economy being hit by multiple large scale hacks that have shaken the resolve of even the most devout crypto users.

Since April 1st, Solana’s $SOL-denominated DeFi TVL has dropped by 12.9M $SOL. While the first outflow was a direct consequence of the Drift exploit, last week’s KelpDAO bridge hack only exacerbated the decline. 

However, where Solana and Ethereum’s TVL decline has been pronounced in the last month, rival networks like Binance Smart Chain and Tron appear to be capturing liquidity flows, with the latter increasing its TVL by over 25% in the last 30 days.

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