Solana’s DeFi Overtakes Ethereum

Despite having a lower valuation, Solana’s decentralized finance (DeFi) scene is growing at a faster rate than Ethereum’s, even earning more in the process. This was the conclusion of a report released by Franklin Templeton on Tuesday, which noted a striking valuation asymmetry in favor of Ethereum.

Comparing Growth Profiles

The report compared tokens from five leading Ethereum projects (LDO, AAVE, ENA, MKR, and UNI) to those of Solana’s top protocols (JTO, JUP, KMNO, MNDE, and RAY). It found Solana projects experienced a median growth rate in fees of 2,400% YoY, with an average multiple of 9x. In contrast, Ethereum projects rose just 150%, with a higher multiple of 18x.

The Rise of Solana

Solana has seen a year of extraordinary growth, largely driven by memecoin traders. By January 2025, Solana’s decentralized exchanges (DEXes) had outstripped the entire Ethereum ecosystem in terms of volume. This trend suggests a shift towards dominance by Solana Virtual Machine-based DeFi, moving away from the historical reign of EVM-based DeFi.

The Future of Ethereum and Solana

Despite this, Ethereum is far from being out of the game. The increase in activity to layer 2 blockchains, as noted by Franklin Templeton, suggests that Ethereum’s scaling approach is beginning to bear fruit. However, the valuation disparity between highly valued Ethereum assets and Solana’s relatively undervalued tokens may soon change.

As Solana continues to prove its resilience as a decentralized computing platform, the market may begin to value its DeFi protocols comparably to those of Ethereum.