Solana’s DeFi Surge Could Rival Ethereum’s Market Value Soon, Franklin Templeton Predicts
- Franklin Templeton predicts Solana's DeFi ecosystem could soon rival Ethereum's valuation, highlighting its growing market presence and rising activity.
- Solana outperformed Ethereum in Q3 and Q4 of 2024, with decentralized exchange (DEX) volumes surpassing Ethereum's amid growing developer engagement.
- Franklin Templeton's report suggests Solana's DeFi tokens remain undervalued, presenting a potential investment opportunity as the market adjusts.
In recent months, Solana has demonstrated remarkable growth in the decentralized finance (DeFi) sector, prompting discussions about its potential to rival Ethereum’s valuation.
A new report by Franklin Templeton highlighted that Solana’s DeFi protocols are among the most utilized and highest-earning platforms across all blockchain environments.
Franklin Templeton Predicts Solana as Ethereum’s Rival
In an analysis, Franklin Templeton highlighted the rapid growth and potential of Solana’s DeFi ecosystem. The report suggested that its valuation could soon rival Ethereum’s.
The global asset management firm, which oversees $1.68 trillion in assets, noted that six Solana-based protocols surpassed $1 billion in Total Value Locked (TVL).
During the third and fourth quarters of 2024, Solana outperformed Ethereum in several key metrics. Solana’s decentralized exchange (DEX) volume notably exceeded that of Ethereum and all Ethereum Virtual Machine (EVM)–based DEXs combined.
The surge indicates a significant shift in DeFi activity towards Solana, challenging Ethereum’s longstanding dominance in the space. Jito (JTO) leads the charge, a liquid staking protocol that recently reached an all-time high of $3 billion in TVL. Notably, this marked the first time a Solana-based protocol has achieved this milestone.
Other notable protocols include Jupiter (JUP), Raydium (RAY), Kamino (KMNO), Marinade (MNDE), and Sanctum Coin (SANCTA). Collectively, these protocols contributed to Solana’s growing DeFi ecosystem.
Further emphasizing its growing prominence, Solana’s active addresses per hour were reported to be 26 times higher than Ethereum’s as of January 2025. This surge in user activity reflects the network’s scalability and efficiency, making it an attractive platform for developers and investors seeking faster transactions and lower fees.
Despite the impressive growth, Franklin Templeton’s report points out that Solana’s DeFi protocols remain undervalued compared to their Ethereum counterparts. The analysis reveals that Solana’s DeFi tokens are trading at lower valuation multiples, although they exhibit higher growth profiles and strong fundamentals.
“Solana DeFi valuation multiples trade on average lower than their Ethereum counterparts despite significantly higher growth profiles. This highlights an apparent valuation asymmetry between the two ecosystems,” an excerpt in the report read.
Notwithstanding, Franklin Templeton says the increased activity has also contributed to Solana’s rising market capitalization and overall ecosystem growth. According to the asset manager, these discrepancies suggest a potential investment opportunity as the market adjusts to recognize Solana’s expanding influence in the DeFi sector.
Reflecting this optimism, Franklin Templeton filed for a spot Solana ETF (exchange-traded fund) with the US SEC. Notably, the proposed ETF includes staking capabilities. This means investors can earn rewards by participating in network validation processes, which is the first for a Solana-based ETF.
Solana Rising – Could It Overtake Ethereum?
While some investors are enthusiastic about Solana’s potential, others remain skeptical. A user on X (Twitter) challenged the move to compare Solana to Ethereum, alluding to stark differences in foundational robustness.
“It’s like comparing Ethereum versus Las Vegas casino. Yea Vegas has more chips,” the user quipped.
Similarly, industry analysts caution against assuming Solana is poised to surpass Ethereum imminently. Juan Pellicer, Senior Research Analyst at IntoTheBlock, noted that while Solana has narrowed the market capitalization gap with Ethereum, it still faces significant hurdles.
“While Solana may continue to grow and potentially challenge Ethereum in specific niches, overcoming Ethereum’s entrenched position as the dominant platform in the immediate future is still unlikely, though the competitive landscape is dynamic and evolving,” Pellicer told BeInCrypto.
Specifically, Pellicer emphasized that Ethereum benefits from established trust and a vast developer community. According to the analyst, these are critical factors in maintaining its leading position in the DeFi space.
He also highlighted the need for Solana to address centralization concerns and achieve parity in developer adoption. These, according to the analysts, would see Solana truly challenge Ethereum’s dominance.
As Solana continues to innovate and expand its DeFi ecosystem, its potential to reach valuations comparable to Ethereum becomes more plausible.
BeInCrypto data shows SOL was trading for $149.77 as of this writing, up by over 5% in the past 24 hours.
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