global asset manager Franklin Templeton released a report predicting that Solana’s surging decentralized finance (DeFi) ecosystem could soon challenge Ethereum’s market valuation. The analysis, penned by the firm overseeing $1.5 trillion in assets, underscores Solana’s rapid growth in user activity and protocol revenue, positioning it as a formidable rival to Ethereum’s long-standing dominance in the DeFi sector. With Solana’s native token, SOL, trading at $149.77 as of March 6, the report has ignited discussions about the blockchain’s trajectory among Web3 enthusiasts and investors alike.
Franklin Templeton’s findings highlight Solana’s explosive DeFi performance, driven by protocols like Jito, a liquid staking platform that recently hit a record $3 billion in total value locked (TVL)—a first for any Solana-based project. Other key players, including Jupiter, Raydium, Kamino, Marinade, and Sanctum Coin, have fueled the network’s ascent, collectively boosting Solana’s DeFi ecosystem to new heights. The report notes that Solana’s decentralized exchange (DEX) volumes outpaced Ethereum’s in the third and fourth quarters of 2024, a shift attributed to the blockchain’s scalability and low transaction costs. “Solana’s active addresses per hour reached 26 times Ethereum’s in January 2025,” the firm stated, emphasizing the network’s efficiency and appeal to developers seeking faster, cheaper alternatives.
Ethereum, with a market cap hovering near $400 billion in March 2025, has historically led the DeFi space, thanks to its robust smart contract capabilities. However, Solana’s ability to process up to 65,000 transactions per second—compared to Ethereum’s 15-30 during peak times—has drawn a growing number of projects and users. Franklin Templeton’s analysts pointed to a “valuation asymmetry,” observing that Solana’s DeFi tokens trade at a median multiple of 9x, far below Ethereum’s 18x, despite posting a staggering 2,400% median growth in fees year-over-year. Ethereum’s equivalent projects, such as AAVE (up 312%) and Maker (up 196%), lagged behind with a median fee growth of 150%.
The report suggests this gap could narrow as market recognition catches up with Solana’s fundamentals. “DeFi may be entering an era of Solana Virtual Machine dominance,” the authors wrote, contrasting it with Ethereum’s reliance on layer-2 solutions to address scalability woes. Still, they acknowledged Ethereum’s enduring strength, noting that its layer-2 adoption signals a maturing scaling strategy. For Solana, the path to parity with Ethereum’s $400 billion valuation—SOL’s market cap sits at $118.66 billion with 486.66 million tokens in circulation—hinges on sustaining this momentum.
Solana’s rise hasn’t gone unnoticed beyond Franklin Templeton. The firm filed for a spot Solana exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission in February 2025, a move that could further legitimize the blockchain in traditional finance circles. Unlike prior ETFs, this proposal includes staking capabilities, allowing investors to earn rewards by supporting network validation—a novel feature that could attract institutional interest if approved. The SEC’s decision, expected by late March, looms large as Solana navigates regulatory scrutiny and competition.
Analysts and community voices offer mixed perspectives. Crypto analyst Armando Pantoja told The Crypto Basic in January that Solana could hit $1,000 by mid-2025, citing its 35% price surge in late 2024 and growing DeFi adoption. On X, users have debated Solana’s centralization risks, with one skeptic arguing it must bolster developer adoption to truly rival Ethereum. Franklin Templeton’s report counters such concerns, pointing to Solana’s resilience and its 25% share of transaction fees in 2025, up from 1.5% a year prior.
For everyday users, Solana’s appeal lies in its practicality—transactions cost just $0.00025 on average, a fraction of Ethereum’s fees, which can climb above $5 during congestion. This affordability has fueled a memecoin frenzy and drawn developers to build scalable applications, from cross-border payments to decentralized energy projects. Yet, challenges remain, including past network outages and the need for broader institutional trust.
As Solana’s DeFi ecosystem expands, its potential to close the gap with Ethereum’s market value grows more plausible. Franklin Templeton’s prediction isn’t a guarantee, but it reflects a shifting tide in the blockchain race—one where Solana’s speed and cost-efficiency could redefine DeFi’s future.
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