Solana Decentralized Finance ecosystem fully recovers, performance analysis of projects in various fields

Recently, the Solana ecosystem has shown strong growth, driven by MEME coins and DePIN projects, with the price of SOL once climbing to around $100. The trading volume of the decentralized exchange (DEX) on the Solana chain briefly surpassed that of Ethereum, sparking market discussions. Meanwhile, Ethereum has faced various doubts, especially as DeFi projects that once led the last bull market are being neglected. So, how are the DeFi projects in the Solana ecosystem performing? Are the established projects truly reviving? Let's analyze from multiple angles.

Liquidity Staking: Growth Engine

Liquidity staking has become an important growth driver for the Solana ecosystem. Staking locks up funds, which is beneficial for the rise in SOL prices, while various liquidity staking tokens (LST) can be applied in other Decentralized Finance projects. New project airdrops and incentive measures continue to attract capital inflow.

Data shows that Marinade Finance and Jito are the two largest liquid staking projects on Solana. As of December 22, their total locked value (TVL) reached $1.05 billion and $626 million respectively, ranking them the top two in Solana's ecosystem TVL. Although Marinade's USD TVL is only 57% of its historical peak, the staked amount of SOL (1115 million SOL) has reached a new high. Jito has gained widespread attention due to its unexpected airdrop and has recently started incentivizing the use of JitoSOL in DeFi projects, with the staking amount rapidly growing to 6.42 million SOL.

Decentralized Exchange: Status Reversal

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

Recently, the trading volume of Solana DEX has surpassed that of Ethereum, attracting attention. Data shows that the total trading volume of major DEXs on Solana reached 1.55 billion USD in 24 hours, while the total trading volume of major DEXs on Ethereum was 1.18 billion USD. It is worth noting that the trading volume on Ethereum is mainly concentrated in Uniswap 1.94 billion USD and Curve 1.14 billion USD.

Another indicator worth noting is the trading volume/TVL ratio of DEXs, which reflects the efficiency of capital utilization. Raydium and Orca stand at 4.81 and 2.87 respectively, far exceeding the 0.26, 0.09, and 0.042 of major DEXs on Ethereum. This suggests that the returns on providing liquidity on Solana could be significantly higher than those on Ethereum, likely attracting further capital inflow.

Decentralized Lending: New and Old Changes

The lending sector has seen significant changes, with the established project Solend still ranking at the forefront, but it has been surpassed by emerging projects. Solend's TVL has dropped from a peak of $910 million to $187 million, which is 20.5% of its high. Other established lending protocols have performed even worse, with Port Finance, Larix, and Apricot Finance all experiencing a substantial decline in TVL.

The emerging projects marginfi and Kamino have shown impressive performance, with TVL reaching $348 million and $204 million respectively, and both are growing rapidly. These projects have not yet issued governance tokens, but have launched a points system to incentivize user participation. Amid various airdrop expectations and LST support, funds continue to flow in.

Yield Aggregators: Nearly Disappeared

The yield aggregator track has almost been eliminated from the market. Sunny, which once shone brightly, 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, have also seen significant reductions in their TVL.

Perpetual Contracts: Potential Waiting to Be Unleashed

Compared to perpetual contract projects on Ethereum Layer 2, Solana has performed moderately in this field. The more prominent one at the moment is Drift, which adopts an order book trading model similar to dYdX, with TVL reaching a new high of $105 million. The established project Mango saw its TVL drop from $210 million to $10.47 million after a hacker attack. Jupiter's JLP adopts a model similar to GMX V1, with a funding cap of $23 million, and a 24-hour SOL-PERP trading volume of $101 million, surpassing Drift.

Decentralized Stablecoins: Lackluster

Solana has been lacking highlights in the decentralized stablecoin space. The once highly regarded UXD Protocol, despite being valued at nearly $2 billion, peaked at a TVL of only $42 million, which has now dropped to $11.19 million. Other stablecoin projects that use over-collateralization for minting, such as Parrot Protocol and Hubble, are also gradually fading.

In summary, the Solana Decentralized Finance ecosystem shows signs of recovery, but performance varies across different sectors. The liquidity staking and DEX sectors have seen significant growth, emerging lending projects are rising rapidly, the potential for perpetual contracts is yet to be realized, while yield aggregators and stablecoin projects have performed moderately. The future development of the Solana Decentralized Finance ecosystem is still worth ongoing attention.