The latest report by Franklin Templeton showed that Solana’s DeFi protocols are some of the most popular and money-making platforms in all blockchain environments.
Franklin Templeton Predicts That Solana Will Be Ethereum’s Competitor
Franklin Templeton wrote an analysis that showed how quickly and greatly Solana’s DeFi ecosystem was growing and what it could become. The report suggests that its value may soon approach that of Ethereum. Six Solana-based protocols had Total Value Locked (TVL) amounts exceeding $1 billion, according to the global asset management firm that oversees $1.68 trillion in assets.
Source: Franklin Templeton Report
In several ways, Solana did better than Ethereum in the third and fourth quarters of 2024.
The increase shows a big shift in DeFi activity toward Solana, which puts Ethereum’s long-held lead in the space to the test. A liquid staking protocol called Jito (JTO) is in the lead. Its value recently hit an all-time high of $3 billion in TVL.
Jupiter (JUP), Raydium (RAY), Kamino (KMNO), Marinade (MNDE), and Sanctum Coin (SANCTA) are some other well-known protocols. These protocols worked together to help Solana’s DeFi ecosystem grow.
As of January 2025, Solana was said to have 26 times more active addresses per hour than Ethereum. This shows how popular it is becoming.
While the market has grown a lot, Franklin Templeton’s report says that Solana’s DeFi protocols are still not worth as much as their Ethereum counterparts. The study shows that Solana’s DeFi tokens are trading at lower valuation multiples, even though they have stronger fundamentals and higher growth profiles.
“Despite Solana DeFi is expected to grow much faster than Ethereum, its valuation the market is still usually lower than Ethereum’s.” which means that both ecosystems do not get the same value”, an excerpt in the report read.
Noticing this, Franklin Templeton says that the extra activity has also helped Solana’s market value rise and the ecosystem grow as a whole.
In line with this sense of hope, Franklin Templeton asked the US Securities and Exchange Commission for a spot Solana exchange-traded fund. One important thing about the proposed ETF is that it allows for staking. In this case, investors can get paid to help validate the network. This is the first time that this has happened for a Solana-based ETF.
Could Solana’s Rise Challenge Ethereum?
While some are very excited about Solana’s potential, others are still not sure. A Twitter user on X questioned the decision to compare Solana to Ethereum, pointing out that the two are very different in terms of how stable their foundations are.
“It’s like comparing Ethereum to a casino in Las Vegas.” The person joked, “Yeah, Vegas has more chips.”
Also, experts in the field warn people not to think that Solana is about to beat Ethereum right away. Senior Research Analyst at IntoTheBlock Juan Pellicer said that Solana has closed the market capitalization gap with Ethereum, but it still has a long way to go.
Pellicer told BeInCrypto, “Solana may continue to grow and could pose a threat to Ethereum in certain niches, but it is still unlikely that Solana will be able to overtake Ethereum as the dominant platform shortly. The competitive landscape is dynamic and evolving.”
In particular, Pellicer stressed that Ethereum benefits from a large developer community and a history of trust. The analyst says that these are important factors that will help it keep its top spot in the DeFi space.
He also said that Solana needed to fix problems with centralization and make sure that all developers could use it.
As Solana keeps adding new features and growing its DeFi ecosystem, it looks more likely that it will be worth as much as Ethereum.
