The battle for DeFi dominance is heating up, and one network is proving to be the dark horse: Solana. According to a recent report from Franklin Templeton, Solana’s decentralized finance (DeFi) protocols are growing at an astonishing rate—far outpacing Ethereum’s. Yet, despite this rapid expansion, Solana’s DeFi tokens remain significantly undervalued compared to their Ethereum-based counterparts. The question is, why?
The Numbers Don’t Lie
Franklin Templeton’s analysis compared five major Ethereum DeFi projects (LDO, AAVE, ENA, MKR, and UNI) with five leading Solana protocols (JTO, JUP, KMNO, MNDE, and RAY). The results were eye-opening. Solana’s DeFi projects saw a staggering 2,400% median growth in fees over the past year, while Ethereum’s projects grew by just 150%. Despite this explosive growth, the valuation multiples for Solana projects averaged just 9x, whereas Ethereum’s sat at 18x.
This discrepancy—what Franklin Templeton calls “valuation asymmetry”—suggests that the market is still hesitant to price Solana’s DeFi ecosystem on par with Ethereum’s, even as it proves its strength.
A Breakout Year for Solana
There’s no denying that 2024 was a breakout year for Solana. Memecoin traders flocked to its decentralized exchanges (DEXes), pushing trading volumes to unprecedented levels. By January 2025, Solana’s DEXes had surpassed the entire Ethereum ecosystem in total volume—a monumental shift in market dynamics.
The report suggests that we may be entering an era of Solana Virtual Machine (SVM) dominance, with DeFi shifting away from Ethereum’s long-standing EVM-based reign. This marks a significant moment in the evolution of decentralized finance, where Ethereum’s first-mover advantage is being challenged by an up-and-coming powerhouse.
Is Ethereum Losing Ground, or Just Evolving?
That said, it would be premature to declare Ethereum’s DeFi dominance over. Franklin Templeton notes that the increased activity on Ethereum’s layer 2 networks—designed to scale the blockchain—shows that Ethereum is evolving, not declining.
However, if Solana continues to prove itself as a high-performance, resilient, and decentralized computing platform, the market may soon start valuing its leading DeFi protocols on par with Ethereum’s blue-chip projects. And when that happens, we could see a major repricing event for Solana’s DeFi tokens.
The Bottom Line
For now, Solana remains one of the most undervalued ecosystems in DeFi. But with its impressive growth, rising trading volumes, and increasing developer adoption, it’s only a matter of time before investors catch on. The crypto markets love an underdog story—and Solana may be on the brink of becoming DeFi’s next heavyweight champion.