Solana vs. Ethereum Decentralized Finance

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).

Global investment firm Franklin Templeton recently released a market perspective titled Solana vs. Ethereum Decentralized Finance, offering insights into the increasingly competitive landscape in decentralized finance (DeFi).

According to the firm, DeFi protocols have rapidly become foundational primitives within crypto economies. 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.

However, 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.

Solana DEX Volume Surpasses Ethereum & EVM DEXs

Image: Franklin Templeton

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.

Ethereum DeFi Protocol Fees (90d Annualized, $ in millions)

According to the firm, 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.

Solana DeFi Protocol Fees (90d Annualized, $ in millions)

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.