Analysis of the Development of Solana Ecosystem Decentralized Finance Projects

Recently, the Solana ecosystem has shown strong growth momentum, with the price of SOL approaching 100 dollars on December 22. Meanwhile, the trading volume of decentralized exchanges on Solana briefly surpassed that of Ethereum, attracting widespread attention in the market. However, the Ethereum ecosystem is also facing some challenges, especially as DeFi projects that led the trend in the last bull market are now being questioned. So, how are the DeFi projects in the Solana ecosystem performing? Let us delve into the development status of various sectors.

Liquidity Staking

Liquid staking is a rapidly growing important sector in the Solana ecosystem. Staking itself can lock up funds, which is beneficial for the increase in SOL prices, while various liquid staking tokens (LST) can be applied in other Decentralized Finance projects. According to data statistics, as of December 22, Marinade Finance and Jito are the two largest liquid staking projects on Solana, with a total locked value (TVL) of 1.05 billion dollars and 626 million dollars, respectively, ranking first and second on the Solana ecosystem TVL leaderboard.

It is worth noting that although Marinade's TVL in USD is only 57% compared to its historical peak, the amount of staked SOL (11.15 million SOL) has reached a new high. Jito also provides MEV infrastructure based on staking, and recently, due to the incentive to use JitoSOL in DeFi projects, the amount staked has rapidly increased, currently reaching 6.42 million SOL.

Decentralized Exchange (DEX)

In the DEX space, Raydium and Orca remain the two most important projects, but their positions have reversed. In terms of liquidity, Raydium currently stands at $113 million, which is only 5.1% of its peak; Orca is at $184 million, which is 13% of its peak.

Recently, the trading volume on DEXs on Solana has surpassed that of Ethereum, drawing attention. Data shows that both the 24-hour and 7-day trading volumes are higher on Solana than on Ethereum. While some have questioned whether this might be due to the repeated calculation of trading aggregator volumes, it was found that when calculating the trading volumes of each DEX separately, the total 24-hour trading volume of the main DEXs on Solana is $1.55 billion, indeed higher than the $1.18 billion of the main DEXs on Ethereum.

Another indicator worth noting is the trading volume/TVL ratio of DEXs, which reflects the utilization of funds. This indicator on major DEXs on Solana is significantly higher than that on Ethereum, meaning that the income from providing liquidity on Solana may be higher under the same principal.

Decentralized Finance

The lending sector has seen significant changes, with the established project Solend still ranking among the top, but having been surpassed by new projects. Solend's TVL has dropped from a high of $910 million to $187 million, while other established lending protocols have performed even worse.

The emerging projects marginfi and Kamino performed excellently, with TVL reaching $348 million and $204 million respectively, and growing rapidly. These projects have not yet issued governance tokens, but have launched a points system that has attracted significant funding.

Yield Aggregator

The yield aggregator track has almost been denied by the market. The once most famous Sunny project saw its TVL drop from a peak of $3.4 billion to $4.02 million. Other projects providing lending and leveraged mining functions, such as Francium and Tulip, also experienced a significant decline in TVL.

Perpetual Contract

Compared to projects on Ethereum Layer 2, Solana performs moderately in the perpetual contract space. Currently, Drift stands out, adopting a similar order book trading model as dYdX, with a TVL reaching a new high of $105 million. The veteran project Mango, despite having faced a hacking incident, is still operational and has added perpetual contract trading. Jupiter's JLP adopts a model similar to GMX V1 and has shown impressive trading volume.

Decentralized Stablecoin

Solana has always lacked a prominent performance in the decentralized stablecoin sector. The UXD Protocol was once valued at nearly $2 billion, but its highest TVL was only $42 million, and it currently stands at just $11.19 million. Other stablecoin projects that use over-collateralization for minting, such as Parrot Protocol and Hubble, are also gradually declining.

Conclusion

Overall, the liquidity staking and DEX sectors within the Solana ecosystem are developing strongly, and emerging lending projects are also performing well. However, the yield aggregators and decentralized stablecoin sectors still face challenges. As the ecosystem continues to develop, DeFi projects on Solana may attract more funds and users, but it will take time to observe their long-term development trends.