The Solana ecosystem has grown immensely in the decentralized finance (DeFi) sector over the last few months. This growth has stirred a debate in the crypto sector about whether Solana could rival the valuation of Ethereum after depicting huge potential in DeFi.
With the discussions picking up heat, a U.S-based asset management firm, Franklin Templeton, has issued a report to show Solana’s DeFi growth and why it could rival Ethereum. Solana has taken the center stage lately with the ecosystem’s DeFi protocols becoming the most widely utilized as per the report.
https://twitter.com/FTDA_US/status/1897356253732724758
Solana’s Huge Potential Positions It To Rival Ethereum
Franklin Templeton recently analyzed how Solana is expanding fast in the DeFi space. The research findings indicate that Solana is set to develop a valuation similar to what Ethereum possesses currently. As per the report, the asset management firm which controls $1.68 trillion in collective assets reported six Solana-based protocols had exceeded $1 billion in Total Value Locked (TVL).
Additionally, Solana generated better performance than Ethereum in multiple vital metrics starting from the third to fourth quarters of 2024. Solana exceeded Ethereum DEX trading volumes and volumes from every decentralized Exchange that runs on Ethereum Virtual Machine protocols.
With DeFi activity increasing in Solana, the ecosystem is contesting to overtake Ethereum. The liquid staking protocol Jito (JTO) continues to dominate the scene by reaching $3 billion Total Value Locked which marked its highest point ever. Such achievement represents the first time a Solana-based protocol reached it.
Jupiter (JUP), Raydium (RAY), Kamino (KMNO), Marinade (MNDE) and Sanctum Coin (SANCTA) also serve as significant protocols in the Solana ecosystem. These protocols have collectively enhanced the DeFi ecosystem growth on Solana.
Furthermore, the number of active addresses on Solana reached 26 times higher than Ethereum during January 2025 according to recent data reports. User activity has surged on the platform due to its efficient operation which attracts developers and investors pursuing low-fee and fast transaction operations.
Solana DeFi is Still Undervalued Despite Recent Growth
Franklin Templeton’s report shows that Solana DeFi protocols still have lower market value than corresponding protocols built on Ethereum despite their recent rapid growth. “Solana DeFi valuation multiples trade on average lower than their Ethereum counterparts despite significantly higher growth profiles, highlighting an apparent valuation asymmetry between the two ecosystems,” the report confirmed. This can be clearly seen through the two charts below.
Comparing the two charts above it is quite clear that Ethereum DeFi multiples the market values Ethereum DeFi multiples more than those on the Solana ecosystem. Nonetheless, the increase in Solana’s DeFi activity further contributed to the growth of both its market capitalization and according to Franklin Templeton.
The asset manager sees these market differences as possible signs to invest because Solana continues to grow its impact in the DeFi sector. This positive investment outlook prompted Franklin Templeton to file a Solana spot ETF with the US Securities and Exchange Commission. Investors will have staking capabilities in the proposed ETF if approved. This Solana-based ETF will allow investors to obtain rewards through engaging in network validation activities.
How Are SOL and ETH Performing?
As of this writing, Solana is trading at $147.69 depicting a 2.99% surge on the day. On the other hand, Ethereum is trading at $2,253.37 having pumped 2.72% today according to data on Coinmarketcap.
While Solana is growing in the DeFi sector, it is quite unlikely that it will flip Ethereum anytime soon. However, with the growth picking up pace in Solana, it could achieve a valuation similar in the future.
