Solana's decentralized finance (DeFi) ecosystem is growing at an unprecedented pace, outpacing Ethereum in both speed and revenue. However, a recent report from Franklin Templeton highlights a striking valuation gap between the two networks.
Despite Solana's explosive DeFi growth, its top tokens remain significantly undervalued compared to Ethereum’s. The report compared five major Ethereum-based projects (LDO, AAVE, ENA, MKR, UNI) with five leading Solana protocols (JTO, JUP, KMNO, MNDE, RAY). While Solana's DeFi platforms saw a staggering 2,400% median increase in fees year-over-year, their valuation multiple averaged just 9x. In contrast, Ethereum’s projects experienced only a 150% growth in fees but had a median multiple of 18x.
This comes as Solana’s ecosystem, driven largely by memecoin trading, has achieved record-breaking decentralized exchange (DEX) volume. In January 2025, Solana DEXes processed more trading volume than all Ethereum-based exchanges combined. Franklin Templeton suggests this could mark the beginning of a shift towards Solana Virtual Machine (SVM) dominance, challenging Ethereum’s long-standing reign in DeFi.
However, Ethereum’s mainnet isn’t slowing down. The report notes that the increasing adoption of Ethereum layer-2 networks demonstrates the effectiveness of its scaling approach. But the valuation disparity between Solana and Ethereum DeFi projects may not last forever.
As Solana continues to prove itself as a resilient decentralized computing platform, its core DeFi protocols could soon see a market repricing, aligning more closely with Ethereum’s valuations. If this happens, investors may find significant upside in Solana’s currently undervalued DeFi assets.
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