In a newly released market perspective titled Solana vs. Ethereum Decentralized Finance, global investment firm Franklin Templeton sheds light on the increasingly competitive landscape in decentralized finance (DeFi). According to the document, “DeFi protocols have rapidly become foundational primitives within crypto economies,” as these blockchain-based applications leverage self-executing smart contracts to deliver financial services without relying on centralized intermediaries.
DeFi: Solana Vs. Ethereum
Franklin Templeton’s analysis highlights the striking growth of Solana-based DeFi, which stands in contrast to historical market leader Ethereum. Despite Solana’s robust transaction capabilities and rising user 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.” Yet this dominant stance appears to be under challenge: the research shows 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 both the magnitude of the DeFi sector and the pace 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 side, protocols such as Lido (LDO), Aave (AAVE), Maker (MKR), and Uniswap (UNI) remain steadfast in their market positions, generating tens to hundreds of millions of dollars in annualized fees over a 90-day period. According to Franklin Templeton:
“Ethereum DeFi Protocol Fees (90d Annualized, $ in millions)
- LDO: $249 in Q4 2024, 35% year-over-year growth
- AAVE: $169 in Q4 2024, 312% year-over-year growth
- MKR: $67 in Q4 2024, 196% year-over-year growth
- UNI: $315 in Q4 2024, 105% year-over-year growth”
Meanwhile, Solana’s top DeFi contenders—Jito (JTO), Jupiter (JUP), Kamino (KMNO), Marinade (MNDE), and Raydium (RAY)—reportedly posted both rapid growth and surprisingly low valuation multiples. In the firm’s words,
“Solana DeFi Protocol Fees (90d Annualized, $ in millions)
- JTO: $423 in Q4 2024, 12405% year-over-year growth
- JUP: $216 in Q4 2024, 2268% year-over-year growth
- KMNO: $32 in Q4 2024, 1587% year-over-year growth
- RAY: $395 in Q4 2024, 2624% year-over-year growth”
Despite these eye-opening figures, Franklin Templeton’s data shows that Solana protocols continue to trade at lower fee-based valuation multiples compared to comparable Ethereum DeFi projects. The research points to “an apparent valuation asymmetry between the two ecosystems,” even after considering potential token dilution.
One of the focal points of the report is the transformative effect of high-throughput chains like Solana. Many observers once believed Ethereum’s first-mover advantage in DeFi was insurmountable, but “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.”
Although Ethereum continues to expand via Layer-2 blockchains (L2s), the growing prominence of the Solana Virtual Machine (SVM) environment suggests that DeFi might be entering what Franklin Templeton dubs an “era of SVM dominance.” Meanwhile, Ethereum is seeing an upsurge in “EVM aligned modular infrastructure,” reflecting a modular approach aimed at scaling financial activity to L2 chains and new, higher-throughput Layer-1 networks.
At press time, SOL traded at $147.
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