Foreign media believe that the recent increase in Solana's stablecoin supply indicates that on-chain fund activity is still strengthening, but this does not necessarily translate into price support for SOL. New USDC is more likely to flow into short-term trading and leveraged activities rather than forming long-term holdings.
Stablecoin size nears previous high
Over the past week, more than $370 million in stablecoin funds flowed into Solana, bringing the total on-chain stablecoin market capitalization close to its all-time high of $16 billion. Circle also minted an additional $500 million in USDC on Solana, increasing the USDC supply on the network by nearly 6% in a single week.
The article mentions that USDC currently accounts for over 51% of Solana's stablecoin liquidity. In contrast, the supply of USDC on Ethereum decreased by 1.48% during the same period. From a funding distribution perspective, Solana is absorbing more stablecoin liquidity.
Increased funds failed to drive SOL higher.
However, the expansion of on-chain liquidity has not been reflected in token prices. The article states that the SOL/ETH exchange rate fell by nearly 3% this week, and the price of SOL also fell to multi-month lows. Even though technical indicators have entered oversold territory, the market has not yet shown a significant recovery.
This has led the market to reassess the nature of these stablecoin inflows. The article argues that the increase in USDC does not necessarily represent investors making long-term investments in Solana; it could simply be providing settlement funds for higher-frequency on-chain transactions.
Perpetual trading amplifies speculative attributes
The article links this assessment to memecoin trading within the Solana ecosystem. It has been repeatedly mentioned in the market that a portion of Solana's on-chain revenue relies on highly volatile, high-turnover speculative activities, with platforms like Pump.fun often considered a significant source of this trading flow.
Meanwhile, DeFiLlama data shows that the total trading volume of Solana on-chain perpetual contracts DEX reached $64.5 billion in May, setting a new monthly record. The article argues that such high-intensity perpetual trading typically reflects short-term risk appetite and leverage demand rather than long-term capital accumulation.
Based on signals such as stablecoin inflows, memecoin trading, and increased perpetual contract volume, the article argues that Solana's current liquidity cycle is more speculative than driven by long-term capital allocation. Therefore, while the continuous inflow of USDC indicates on-chain activity, it may not be sufficient to directly translate into sustained buying of SOL.
