Overview of the Solana DeFi Ecosystem: Major Products and Trend Analysis

The report released by Messari for the first quarter of 2024 shows that Solana's DeFi trading volume continues to grow, with an average daily spot DEX trading volume increasing by 319% month-on-month to $1.5 billion. This growth is mainly driven by trading in popular tokens represented by SLERF and BOME. Solana has become a hub for retail and popular token 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 locked value (TVL) has also grown to $4.311 billion. Similar to other public chains, Solana's TVL is mainly composed of DEX, LST, lending platforms, and perpetual contract trading.

Decentralized Exchange ( DEX )

Decentralized exchanges typically focus on a single ecosystem, a characteristic that is particularly evident on non-EVM chains like Solana.

| Project | TVL( billion USD) | Circulating Market Cap( billion USD) | FDV( billion USD) | 24h Trading Volume( billion 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 led to the emergence of a large number of popular tokens on Solana, making Raydium a preferred DEX for issuance at one point. Currently, 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 new token issuance platforms, Raydium's dominant position in token issuance may face challenges. If these platforms build their own DEX, it could have a greater impact on Raydium.

Jupiter

Jupiter, as a liquidity aggregator, can find the best price routes across all major DEXs and AMMs on Solana, effectively reducing slippage and transaction costs, while enhancing trading efficiency and user experience.

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

Jupiter has also launched the MEME market discovery tool APE, which helps users discover newly launched tokens and conduct risk assessments. The platform's points system also provides users with considerable rewards.

Orca

Orca, with the slogan "a DEX designed for people, not programs," has long been a leader among Solana DEXs. Its feature is the concentrated liquidity active market-making mechanism called Whirlpools, similar to Uniswap V3. This model allows liquidity providers to concentrate their funds within specific price ranges, improving capital efficiency.

As the top DEX in the Solana ecosystem, Orca's FDV is only $268 million, reflecting the potential bubble situation that may exist with other chains and DEXs.

Liquid Staking ( LST )

The demand for liquid staking among users on Solana is relatively low, mainly because Solana has no minimum staking amount requirement, and the relatively low price of SOL lowers the threshold for becoming a validator.

| Project | LST | APY | TVL ( hundred million ) | Circulating Market Cap | FDV | |------|-----|-----|-------------|----------|-----| | Jito | JitoSOL | 8.26% | 17.05 | 295 million USD | 2.374 billion USD | | Marinade | mSOL | 7.44% | 14.13 | 27.41 million USD | 101 million USD | | BlazeStake | bSOL | 7.06% | 2.75 | Unknown | 6.83 million USD |

Jito (JTO)

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

The eligibility for airdrops for JitoSOL users is based on a points program ranking, with ten levels of allocation standards set. The lowest tier can receive 4941 Jito, which is approximately valued at 10524 USD based on the first day's price.

Marinade

Marinade focuses on native staking with a high APY, becoming a leading project in the ecosystem, with a locked value of $1.413 billion. Compared to Jito, Marinade has a significant gap in market capitalization and FDV, reflecting that $MNDE may have growth potential.

BlazeStake

BlazeStake is the second largest LST project in the Solana ecosystem, with a TVL of approximately $275 million. The estimated staking APY is currently 7.06%, slightly lower than Jito. Its FDV is only $6.87 million, which is a huge gap compared to Jito's $2.387 billion, reflecting both growth potential and the need to attract users through high APY.

Lending

Save

Save(, originally named Solend), is a lending algorithm protocol on Solana. Compared to traditional lending products, Save achieves a 100-fold increase in speed and reduced costs on Solana.

In November 2022, Save experienced an oracle attack targeting USDH, resulting in bad debts of $1.26 million, but Save provided full compensation. This incident highlights the importance of reliable oracles in the Decentralized Finance ecosystem.

Currently, Save uses the PYTH oracle to provide real-time price data for various assets. Overall, the Solana ecosystem does not have high lending demand, and there are relatively few existing lending products. The upcoming emergence of the new lending protocol Marginfi is worth looking forward to.

Derivatives

Derivatives are financial contracts based on underlying assets, used for risk management and market forecasting. In addition to Jupiter, there are several other derivatives protocols on Solana, such as Drift, Flash Trade, and Zeta.

| Project | TVL( billion USD) | FDV | |------|-------------|-----| | Drift | 360 million | 530 million USD | | Flash Trade | 14.69 million | 550 million | | Zeta Markets | 9.7 million | Unissued tokens |

Drift

Drift has a TVL of $360 million, offering multi-functional integrated DEX services such as pre-market trading, 20x leverage, and collateralized lending. The project is supported by Multicoin Capital and raised $3.8 million in seed funding in October 2021.

Drift v2 attracted over 15,000 users and a trading volume exceeding $10 billion within six months, demonstrating strong user appeal and trading activity.

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.

The platform employs a unique multi-asset pool system and innovative NFT structure to enhance user participation. Its pool-to-pool trading model ensures zero price impact and optimal trading conditions. The platform utilizes the Pyth oracle and backup system for dynamic pricing and gamifies the trading process through NFTs.

These innovative features helped Flash Trade attract $17 million in TVL.

Zeta Markets

Zeta Markets is a Decentralized Finance derivatives platform aimed at democratizing derivatives trading. The platform offers two core products, DEX and FLEX, simplifying the derivatives trading experience.

Its interface is simple and smooth, integrating TradingView's candlestick chart functionality, and the tokens have airdrop expectations. These factors together have contributed to the platform attracting over tens of millions of dollars in TVL.

PYTH

PYTH, as a leading oracle on the Solana chain, has several innovations compared to Chainlink. PYTH's data update speed is faster and more stable, making it suitable not only for the Solana chain but also applicable to other blockchains, demonstrating huge development potential.

Conclusion

The Solana ecosystem is continuously expanding, with new Decentralized Finance products emerging, such as the recently launched prediction market B.E.T. These projects enrich the Solana ecosystem, providing users with more financial tools and options.

Although mature products have a strong user base and market trust, emerging products lower the barriers to use by optimizing user interface design, enhancing user education, and building community. Through well-planned brand building and marketing promotion, these new products can also quickly attract a large number of users and occupy a place in the market.

With the emergence of more innovative products, Solana's Decentralized Finance ecosystem will become more prosperous and diverse. In the future, we may focus on the analysis of more undistributed token projects and in-depth interpretations of specific products.