Solana Decentralized Finance Ecosystem Overview: Major Products and Trend Analysis

The trading volume of DeFi on Solana continues to grow, with the average daily spot DEX trading volume reaching 1.5 billion USD in the first quarter of 2024, a quarter-on-quarter increase of 319%. This growth is mainly driven by Memecoin trading, such as SLERF and BOME. Solana has become the preferred platform for retail and Memecoin traders due to its extremely low transaction fees and fast confirmation times. Against the backdrop of a steady increase in SOL prices, Solana's total value locked (TVL) has grown to 4.311 billion USD. Similar to other public chains, Solana's TVL mainly comes from DEX, LST, lending platforms, and perpetual contract trading.

Decentralized Exchange (DEX)

Decentralized exchanges typically operate around specific ecosystems, especially for non-EVM chains like Solana.

|---------|----------------|-----------|-----------------|-------------| | Project | TVL Total Locked Value (Hundred Million USD) | Circulating Market Cap (Hundred Million USD) | FDV Fully Diluted Valuation (Hundred Million USD) | 24h Trading Volume (Hundred Million USD) | | Raydium | 9.65 | 4.58 | 9.65 | 6.50 | | Jupiter | 5.96 | 11.72 | 86.82 | 8.18 | | Orca | 2.36 | 1.07 | 2.68 | 5.96 |

Raydium

Raydium allows users to create liquidity pools and direct token liquidity. This feature has prompted a large number of meme coins to launch on Solana, making Raydium a major platform for meme coin issuance. Raydium's TVL is approximately $965 million, with a 24-hour trading volume of about $1.162 billion, ranking first in the Solana ecosystem.

However, with the rise of meme platforms represented by Pump.fun, Raydium's influence in project launches may gradually decline. If these platforms build their own DEX, the impact on Raydium could be even greater.

Jupiter

Jupiter, as a liquidity aggregator, searches for the best price routes across all major DEX and AMM on Solana, minimizing slippage and transaction fees, thereby enhancing trading efficiency and user experience.

In addition to being a leading DEX platform, Jupiter also offers decentralized perpetual contract trading with leverage of up to 100 times. Users can participate as traders or liquidity providers. JLP holders can receive 75% of the fees generated from perpetual trading, which are directly reinvested into JLP, increasing the JLP price and promoting yield compounding.

Jupiter has also launched the MEME market exploration tool APE, helping users discover newly launched tokens and conduct risk screening.

Orca

Orca, with the slogan "DEX for people, not programs," has long been at the forefront of Solana DEX. It offers concentrated liquidity active market-making features similar to Uniswap V3 - Whirlpools. This model allows liquidity providers to concentrate liquidity in specific price ranges, enhancing capital utilization efficiency and earning more market-making profits.

Liquidity Staking (LST)

The demand for liquid staking among Solana users is relatively low, mainly because Solana has no minimum staking requirements, and the relatively low price of SOL lowers the barrier to becoming a validator.

|------------|---------|---------------------------|-----------------|----------|----------------| | Project | LST | APY (Annual Percentage Yield) (usually includes MEV income sharing) | TVL (Total Value Locked) (in hundreds of millions) | Circulating Market Cap (USD) | FDV Fully Diluted Valuation (USD) | | Jito | JitoSOL | 8.26% | 17.05 | 295 million | 2.374 billion | | Marinade | mSOL | 7.44% | 14.13 | 27.41 million | 101 million | | BlazeStake | bSOL | 7.06% | 2.75 | Unlock amount unknown | 6.83 million |

Jito (JTO)

Jito launched an airdrop points program in September 2023, quickly becoming a leading project in the field. The TVL of JTO is $1.705 billion, making it the project with the highest TVL in the Solana ecosystem. The staking APY for Jito SOL is currently 8.26%, which includes the Solana staking yield and MEV revenue sharing.

Marinade

Marinade is more popular in native staking, with a higher APY, becoming a leading project in the ecosystem, having a locked amount of 1.413 billion dollars. Compared to Jito, Marinade's market cap and FDV are significantly different, which may indicate that $MNDE has some growth potential.

BlazeStake

BlazeStake is the second-largest LST project in the Solana ecosystem, with a TVL of approximately 275 million USD. The estimated staking APY is currently 7.06%, slightly lower than Jito. Its FDV is 6.87 million USD, which is significantly lower compared to Jito's 2.387 billion USD, reflecting that the ecosystem mainly consists of memecoin players who need high APY to compete for users with leading projects.

Lending

Save

Save (formerly known as Solend) is an algorithmic decentralized lending protocol on Solana. It provides lending services that are 100 times faster and 100 times cheaper on Solana. After the oracle attack incident in November 2022, Save adopted the PYTH oracle to enhance security.

Currently, the lending demand in the Solana ecosystem is not high, and there are relatively few lending products. A new lending protocol, Marginfi, is set to launch soon and is worth paying attention to.

Derivatives

Derivatives are financial contracts that derive value from underlying assets, used for risk management and market forecasting. Major derivatives protocols on Solana include Jupiter, Drift, Flash Trade, and Zeta.

|--------------|-----------------|----------------| | Project | TVL (Total Value Locked) (in hundreds of millions USD) | FDV (Fully Diluted Valuation) (USD) | | Drift | 360 million | 530 million | | Flash Trade | 14.69 million | 550 million | | Zeta Markets | 9.7 million | Not issued |

Drift

Drift is a multifunctional integrated DEX that offers pre-market trading, 20x leverage, and collateralized lending among other features. It currently has a TVL of $360 million and is supported by Multicoin Capital. Drift v2 provides enhanced liquidity, market making, and collateral features, improving the trading experience.

Flash Trade

Flash Trade is a decentralized spot and contract exchange focused on the Solana network, characterized by low trading fees and minimal price impact. It employs a unique multi-asset pool system and an innovative NFT structure to enhance user engagement. The pool-to-point trading model of Flash Trade ensures zero price impact and optimal trading conditions.

Zeta Markets

Zeta Markets is a Decentralized Finance derivatives platform that offers two core products: DEX and FLEX. The platform aims to simplify the derivatives trading experience, allowing users to easily hedge, speculate, and predict market movements.

PYTH

PYTH is the main oracle on the Solana chain, offering faster update speeds and higher stability compared to traditional oracles. It is not only applicable to the Solana chain but can also be applied to other blockchains, showing great development potential.

Conclusion

The DeFi ecosystem of Solana is continuously expanding, with new projects like the prediction market B.E.T. constantly emerging. These DeFi projects enrich Solana's ecosystem, providing users with more financial tools and options. While mature products have the advantage of a user base and market trust, emerging products can also quickly attract users through innovative user interface design, user education, and community building. With the emergence of more innovative products, Solana's DeFi ecosystem will become even more prosperous and diverse.