Solana's Network Gains Momentum Amid Divergent Market Signals

Solana sees unique ETF inflows amid broader crypto outflows, while infrastructure upgrades aim to decentralize validators and improve network efficiency.

This week presents a multifaceted picture for the Solana blockchain, where infrastructure upgrades, speculative trading activity, and persistent ETF inflows are converging. The key question for observers is distinguishing between short-term market noise and developments that could foster greater long-term network resilience.

ETF Flows Defy the Broader Trend

A notable divergence has emerged in the exchange-traded fund landscape. Data indicates that Solana-focused ETFs have seen consistent capital inflows since February 10th, experiencing only three days of outflows throughout the entire month. In total, these products attracted a net $30.33 million.

This trend stands in stark contrast to the flows for the two largest digital assets. Over the same February period, Bitcoin ETFs recorded net outflows of $939.94 million, while Ethereum ETFs saw $490.58 million leave. Although the absolute figures for Solana remain significantly smaller, this pattern suggests a more selective investor appetite exists for SOL exposure, even as broader cryptocurrency ETF sentiment wanes.

DoubleZero Aims to Decentralize Validator Geography

On the infrastructure front, provider DoubleZero has announced the March 9th launch of "Phase II" for its delegation program, initially revealed on February 26th. The primary objective is to improve the geographical distribution of network validators.

The plan involves redirecting 2.4 million SOL from a 13-million-SOL delegation pool to regions currently considered underrepresented. The specifically named targets are São Paulo, Singapore, Hong Kong, and Tokyo, with each eligible for up to 600,000 SOL in additional staking incentives.

This initiative addresses a growing concentration of staked SOL in Central European data centers—a legacy from Solana's earlier years when cost-effective bare-metal hosting in that region was particularly attractive. DoubleZero, which reportedly raised $28 million at a $400 million valuation in 2025, also operates a private fiber network designed to reduce latency between validators.

Adopting Multicast for Efficiency

Running parallel to the geographical expansion, DoubleZero is introducing multicast functionality to its infrastructure. This data distribution method, common in traditional financial trading systems, involves transmitting a signal once and replicating it near the network edge, rather than sending individual data streams to each validator.

The company reports that this approach should lower bandwidth costs, enhance fairness in data delivery, and align Solana's infrastructure more closely with conventional exchange systems. According to DoubleZero, 22% of the SOL staked on the Mainnet is already utilizing its service.

Market Rally Fuels Liquidations

From a trading perspective, SOL participated in a broad-based altcoin recovery on February 25th and 26th. During this move, over $400 million worth of short positions across the market were liquidated, with Solana accounting for approximately $22 million of that total. Such forced coverings often act as an accelerant for price moves, generating buying pressure driven by risk management rather than fundamental conviction.

This activity creates a contrast with SOL's longer-term price chart. Despite a daily gain of 6.75% at the time of reporting, the asset remained under significant pressure on a 30-day view, showing a decline of -31.97%.

Step Finance Closure Highlights Ecosystem Risks

Not all recent news from the ecosystem has been positive. Step Finance, a DeFi portfolio tracker built on Solana, ceased operations effective February 24th. The shutdown followed a January hack that resulted in a loss of $27 million. In the aftermath, the project's STEP token lost nearly 96% of its value. Related projects, including SolanaFloor and the tokenization platform Remora Markets, are also slated to close.

Looking ahead, two dates are pivotal. The March 9th launch of DoubleZero's Phase II will test the impact of its staking redistribution. Furthermore, the trajectory of ETF inflows since February 10th will serve as a gauge for whether demand extends beyond a short-term price bounce. Simultaneously, the shutdown of Step Finance serves as a reminder of how quickly individual components within a blockchain ecosystem can falter, even as its core technology advances.