Solana's DeFi Tokens Appear Undervalued Compared to Ethereum Counterparts, According to Franklin Templeton

The decentralized finance scene on Solana is experiencing rapid growth, outpacing Ethereum in terms of expansion and revenue generation. However, as highlighted in a report by Franklin Templeton on Tuesday, the valuation of Solana's tokens lags behind that of Ethereum's. The report notes, "Despite exhibiting significantly higher growth profiles, Solana DeFi valuation multiples trade at lower averages compared to their Ethereum counterparts, indicating an apparent disparity in valuation." Franklin Templeton's analysis involved comparing the tokens of five prominent Ethereum projects, namely LDO, AAVE, ENA, MKR, and UNI, with those of five leading Solana protocols, including JTO, JUP, KMNO, MNDE, and RAY. The Solana projects demonstrated a median growth of 2,400% in fees on a year-over-year basis, with a median multiple of 9x, whereas the Ethereum projects saw a 150% increase, with a multiple of 18x. This development comes on the heels of a remarkable year of growth for Solana, driven in part by the activity of memecoin traders, which propelled the network's decentralized exchanges to unprecedented heights in 2024. By January 2025, Solana's DEXes had surpassed the combined volume of Ethereum's entire ecosystem. The report suggests, "DeFi may be entering an era dominated by the Solana Virtual Machine, marking a shift away from the historical dominance of EVM-based DeFi." While this does not signify the demise of the Ethereum mainnet, the migration of activity to layer 2 blockchains is seen as evidence that Ethereum's scaling strategy is gaining momentum. Nevertheless, the disparity in valuation between Ethereum's highly valued assets and Solana's relatively undervalued tokens may be short-lived. As Solana continues to demonstrate its capabilities as a decentralized computing platform, the market may soon reevaluate and adjust the pricing of prominent Solana DeFi protocols to be more in line with their Ethereum counterparts.