Solana’s DeFi Growth Surpassing Ethereum

Solana’s decentralized finance (DeFi) sector is rapidly expanding, outpacing Ethereum’s growth and generating more revenue, despite lower token valuations, according to a report by Franklin Templeton.

The report highlights that Solana DeFi valuation multiples average lower than those of Ethereum, illustrating a significant valuation asymmetry. The study compared five leading Ethereum projects (LDO, AAVE, ENA, MKR, UNI) with five strong Solana protocols (JTO, JUP, KMNO, MNDE, RAY).

Solana projects experienced a staggering 2,400% median growth in fees year over year, with a median multiple of 9x. In contrast, Ethereum projects saw a mere 150% increase in fees, with a valuation multiple of 18x.

The data reflects a year of remarkable growth for Solana. Memecoin traders significantly boosted the volume on Solana’s decentralized exchanges, surpassing that of Ethereum’s ecosystem combined by January 2025.

The report suggests that DeFi may be transitioning into an era dominated by the Solana Virtual Machine, moving away from the previous dominance of Ethereum’s EVM-based DeFi.

However, Ethereum’s mainnet remains robust. Franklin Templeton noted that the shift towards layer 2 blockchains indicates that Ethereum’s scaling solutions are becoming effective.

Despite the current discrepancies in valuation, the report indicates that as Solana proves its capabilities as a decentralized platform, the market may adjust the valuation of major Solana DeFi protocols to align more closely with those of Ethereum.