In a newly launched market perspective titled Solana vs. Ethereum Decentralized Finance, international funding agency Franklin Templeton sheds gentle on the more and more aggressive panorama in decentralized finance (DeFi). In keeping with the doc, “DeFi protocols have rapidly become foundational primitives within crypto economies,” as these blockchain-based purposes leverage self-executing sensible contracts to ship monetary companies with out counting on centralized intermediaries.
DeFi: Solana Vs. Ethereum
Franklin Templeton’s evaluation highlights the putting progress of Solana-based DeFi, which stands in distinction to historic market chief Ethereum. Regardless of Solana’s sturdy transaction capabilities and rising person adoption, the paper notes how “Ethereum has historically served as the leader of all DeFi, enabling the highest level of activity and offering the deepest liquidity among all on-chain ecosystems.” But this dominant stance seems to be underneath problem: the analysis reveals that as of January 31, 2025, “Solana DEX volume exceeded both Ethereum DEX volumes as well as volumes from all Ethereum Virtual Machine (EVM)-based DEXs combined.”
Franklin Templeton underscores each the magnitude of the DeFi sector and the tempo at which Solana is catching up. As of January 31, 2025, “DeFi has managed to find strong product market fit, facilitating as much as $600bn in monthly trading volume & securing over $120bn in Total Value Locked (TVL).”
On the Ethereum facet, protocols corresponding to Lido (LDO), Aave (AAVE), Maker (MKR), and Uniswap (UNI) stay steadfast of their market positions, producing tens to tons of of thousands and thousands of {dollars} in annualized charges over a 90-day interval. In keeping with Franklin Templeton:
“Ethereum DeFi Protocol Charges (90d Annualized, $ in thousands and thousands)
- LDO: $249 in This fall 2024, 35% year-over-year progress
- AAVE: $169 in This fall 2024, 312% year-over-year progress
- MKR: $67 in This fall 2024, 196% year-over-year progress
- UNI: $315 in This fall 2024, 105% year-over-year progress”
In the meantime, Solana’s high DeFi contenders—Jito (JTO), Jupiter (JUP), Kamino (KMNO), Marinade (MNDE), and Raydium (RAY)—reportedly posted each speedy progress and surprisingly low valuation multiples. Within the agency’s phrases,
“Solana DeFi Protocol Charges (90d Annualized, $ in thousands and thousands)
- JTO: $423 in This fall 2024, 12405% year-over-year progress
- JUP: $216 in This fall 2024, 2268% year-over-year progress
- KMNO: $32 in This fall 2024, 1587% year-over-year progress
- RAY: $395 in This fall 2024, 2624% year-over-year progress”
Regardless of these eye-opening figures, Franklin Templeton’s knowledge reveals that Solana protocols proceed to commerce at decrease fee-based valuation multiples in comparison with comparable Ethereum DeFi tasks. The analysis factors to “an apparent valuation asymmetry between the two ecosystems,” even after contemplating potential token dilution.
One of many focal factors of the report is the transformative impact of high-throughput chains like Solana. Many observers as soon as believed Ethereum’s first-mover benefit in DeFi was insurmountable, however “the recent rise of Solana and other high-throughput chains has significantly challenged Ethereum’s market-leading position for the first time since Ethereum’s inception.”
Though Ethereum continues to increase by way of Layer-2 blockchains (L2s), the rising prominence of the Solana Digital Machine (SVM) surroundings means that DeFi may be coming into what Franklin Templeton dubs an “era of SVM dominance.” In the meantime, Ethereum is seeing an upsurge in “EVM aligned modular infrastructure,” reflecting a modular method aimed toward scaling monetary exercise to L2 chains and new, higher-throughput Layer-1 networks.
At press time, SOL traded at $147.
Featured picture from CoinDCX, chart from TradingView.com
