The Solana ecosystem has shown remarkable strength, fueled by DePIN and MEME coins, with SOL's price surging to nearly $100 on December 22. Notably, Solana's DEX trading volume briefly surpassed Ethereum's, sparking discussions about "Solana Flipping Ethereum." Amid Ethereum facing FUD (Fear, Uncertainty, Doubt), particularly around its DeFi projects, how are Solana's DeFi projects faring? Are older projects truly recovering?
Liquid Staking: The Growth Engine
Liquid staking stands out as a key driver of growth on Solana. By locking funds to stake SOL, these projects contribute to SOL's price appreciation while enabling the use of Liquid Staking Tokens (LSTs) across other DeFi protocols. Incentives like airdrops and rewards further boost participation.
Top Liquid Staking Projects:
- Marinade Finance: TVL of $1.05 billion (as of December 22), with 11.15 million SOL staked—a historic high in SOL terms despite being 57% below its USD peak.
- Jito: TVL of $626 million, offering MEV infrastructure. Its JitoSOL token has gained traction due to an impressive airdrop and DeFi adoption incentives, now holding 6.42 million SOL.
Decentralized Exchanges (DEXs): Liquidity vs. Trading Volume
Raydium and Orca remain Solana's leading DEXs, both introducing concentrated liquidity features. However, their positions have shifted:
- Liquidity: Raydium's liquidity dropped to 5.1% of its peak ($1.13B vs. $2.21B), while Orca retains 13% ($184M vs. $1.41B).
- Trading Volume: Solana's DEXs briefly outpaced Ethereum's, with a 24-hour volume of $1.55B (Raydium, Orca, etc.) versus Ethereum's $1.18B (Uniswap dominating at $940M).
Key Metric: DEX Volume/TVL ratios highlight Solana's efficiency:
- Raydium: 4.81
- Orca: 2.87
- Uniswap: 0.26
This suggests higher returns for liquidity providers on Solana, potentially attracting more capital.
Decentralized Lending: New Players Rise
While legacy protocols like Solend (TVL at 20.5% of peak) struggle, newcomers marginfi ($348M TVL) and **Kamino** ($204M TVL) thrive with no-token-launch strategies and point systems capitalizing on airdrop hype.
Legacy Protocol Decline:
- Solend: $187M (from $910M peak)
- Port Finance: $570K (from $260M)
- Larix: $481K (from $360M)
Perpetual Contracts: Niche Growth
Solana's perpetual contracts niche is led by:
- Drift: $105M TVL, $43M 24h SOL-PERP volume.
- Jupiter’s JLP: $23M cap, $101M 24h volume (GMX-style model).
- Mango: Declined to $1.05M TVL post-hack.
Stablecoins and Yield Aggregators: Limited Traction
- Stablecoins: UXD Protocol ($11.2M TVL) and others faltered, shifting to USDC-backed models.
- Yield Aggregators: Sunny’s TVL collapsed from $3.4B to $402K, exposing past frauds.
FAQ Section
Q: Why is Solana’s DEX volume surpassing Ethereum’s?
A: Higher capital efficiency (Volume/TVL) and lower fees drive more trading activity.
Q: Which Solana DeFi projects have airdrop potential?
A: marginfi and Kamino, both using point systems ahead of token launches.
Q: Is liquid staking safe on Solana?
A: Top projects like Marinade and Jito have robust mechanisms, but always audit smart contracts.
Conclusion: Solana’s DeFi revival is led by liquid staking and efficient DEXs, while lending and perpetuals show promise. However, stablecoins and yield aggregators lag, reflecting sector-specific challenges.