Key Takeaways
- Solana's DeFi ecosystem is growing rapidly.
- Several high-quality projects are vying to become the network's blue chips.
- By using these protocols early, users can get in on the ground floor before the ecosystem develops.
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Following Solana’s meteoric price rise, the smart contract platform’s DeFi ecosystem has exploded. With so many new projects establishing themselves on Solana, there are numerous opportunities to benefit from the rapid growth.
Solana’s Ascent
While Solana has grown exponentially over the summer, Ethereum is still the undisputed home of DeFi in the crypto space. Following the “DeFi summer” of 2020, a handful of top projects have established themselves as DeFi blue chips on Ethereum, covering the functionalities of traditional financial markets in the decentralized space.
However, the expense of using DeFi on Ethereum today has priced out many users. While Layer 2 solutions like Optimism and Arbitrum promise to reduce the cost of using the network, progress has been slow. As such, other Layer 1 chains like Solana are well-positioned to take some of the DeFi market share away from Ethereum.
Solana ticks all the boxes for an up-and-coming DeFi-focused Layer 1. Its fast block times and Proof-of-History mechanism prevent frontrunning, and its node scalability means the network can theoretically avoid congestion and keep transaction costs low.
With this in mind, Solana is well on the way to fostering its own thriving DeFi ecosystem. At present, several DeFi projects are vying to become Solana’s DeFi blue chips. By identifying potential projects, users can benefit from being early adopters and all the perks that come with that, such as airdrops, liquidity mining, and more.
Potential Blue Chips
Two of the biggest DeFi blue chips on Ethereum are Compound and Aave. Both of these protocols act like decentralized banks, allowing users to deposit assets to earn interest and use them as collateral for borrowing assets. Advanced yield farmers often use Compound and Aave as the base layer for stacking “money legos,” borrowing assets to generate additional yield in various DeFi protocols.
Port Finance and Solend are two Solana-based projects that are competing to act as decentralized banks.
Port Finance, is currently the 11th largest dApp on Solana with a total value locked (TVL) of around $122 million, according to DeFi Llama. Port works much the same way as Compound and Aave and currently supports stablecoins USDC, USDT, and PAI, plus a few Solana-native assets such as Serum. Port is currently running a liquidity mining program, where users can earn the protocol’s governance token PORT in addition to interest paid out in the deposited asset.
The Port Finance Liquidity Program is now live
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