At the time of writing, Solana remains among the top five largest cryptocurrencies by market value. That status is thanks in large part to a rebound in SOL prices, the project's dedicated community, interest in Solana-based memecoins, and its strong DeFi ecosystem.
Meanwhile, Solana brings cross-chain compatibility with the Wormhole bridge, which connects the network to other blockchains like Ethereum, Base, and Uniswap. You may have heard of Helium and Pyth Network — just two of the top Solana decentralized (DApps) applications out there today.
Eager to find out more? In this article, we'll explore other DApps and SPL tokens you might consider adding to your Solana DeFi list.
TL;DR
Solana remains the fifth-largest cryptocurrency thanks to its community, token price rebound, memecoin hype, and DeFi growth.
Wormhole bridge connects Solana to other blockchains like Ethereum and Uniswap, improving cross-chain compatibility.
Key Solana projects include Jito, Helium, Pyth Network, and Marinade Finance, with promising SPL tokens for DeFi.
Marinade Finance promotes liquid staking, and Jito improves staking rewards with maximum extractable value.
Despite challenges, Solana’s unique speed and scalability position it to take DeFi to the next level.
What is Solana?
Before doing a deep dive into the Solana ecosystem, it's helpful to first understand what Solana is. In a nutshell, Solana is a Layer-1 blockchain platform that aims to stand out from other Layer-1s by offering high-performance, scalability, and security. Thanks to its unique combination of technologies like PoH and tower byzantine fault tolerance (BFT), Solana achieves an impressively high throughput of up to 65,000 transactions per second (TPS). The technology stands out as one of the most popular Layer-1 blockchains in the crypto space today.
Despite being popular with crypto enthusiasts for its ability to provide unmatched scalability, Solana has faced criticism for its network outages and perceived centralization. Meanwhile, the limited number of validators raises concerns about vulnerabilities and central control. Thankfully, Solana seems to have turned the corner with the outages challenge and found a fix with the announcement of its Firedancer validator client. By adding an additional validator client for the Solana network, Firedancer acts as a backup that'll keep the Solana network online even if an existing issue is bugging the original client.
What are SPL tokens?
Like the ERC and BRC token standards present in Ethereum and Bitcoin, SPL tokens refer to both non-fungible and fungible tokens on the Solana network with the SPL token standard, which governs how they operate on the Solana blockchain. This guarantees compatibility and interoperability within the Solana ecosystem.
Uncovering the Solana ecosystem: what are the best Solana projects and SPL tokens to watch?
Looking for the best Solana projects to keep an eye on? To better understand the entire Solana DeFi ecosystem, we've broken it down into common DApp categories for your convenience. From infrastructure powerhouses like Pyth Network and Helium Network to liquid staking platforms like Jito and Marinade Finance, here are our thoughts on the best projects from the Solana DeFi ecosystem. We've also highlighted their respective SPL tokens, which you can consider trading after adding them to your watchlist.
Marinade Finance: disrupting traditional staking with liquid staking
As Solana's most popular DApp to date with almost one billion in TVL, Marinade Finance is an early adopter and innovator in the liquid staking space for Solana. Previously, Solana stakers simply let their Solana be locked up for a predetermined period to reap Solana on-chain staking rewards.
With the introduction of Marinade's mSOL, which is a liquid representation of staked SOL, Marinade Finance essentially creates a convenient gateway for many crypto beginners to get into Solana DeFi. How? By participating in mSOL lending pools and lending while earning staking rewards. Even if users are already staking their SOL, they can easily redelegate their SOL stakes to the Marinade Finance validator pool without any unstaking hassle. This significantly lowers the barrier to entry and allows for instant participation in Marinade’s native or liquid stake. Aside from being the DApp's governance token, MNDE also offers various forms of utility, like additional staking rewards and attractive discounts on transaction fees within the Marinade ecosystem.
Jito: boosting liquid staking efficiency with MEV
Far from being your average DeFi staking protocol, Jito has exploded in popularity because it's an early pioneer of Maximal Extractable Value (MEV) enhanced liquid staking. This essentially allows for a double-dipping scenario where users enjoy rewards from both MEV staking and using JitoSOL to participate in Solana's DeFi ecosystem.
Thanks to Jito's Block Engine that maximizes MEV capture to boost overall staking gains, Jito offers superior rewards beyond basic staking APY. Additionally, users can make use of the DeFi liquidity offered by JitoSOL tokens to participate in additional yield-generating opportunities like liquidity pools and lending platforms to maximize their overall gains. To enjoy a part of Jito's MEV rewards, users must hold JTO, the native token for Jito. The asset also doubles as a governance token granting access to the blooming Jito DeFi community.
Neon EVM: bridging the Ethereum gap
If you can't beat them, join them — that's the collaborative mindset many of today's top Solana DApps hold as they focus on interoperability to achieve a low-friction transition for any Ethereum-based developer who's considering porting their DApp over to Solana. That's where Neon EVM comes in, acting as a bridge that connects the vast DApp ecosystem of Ethereum with the lightning-fast rails of Solana.
By applying the parallel transaction capabilities of Solana through the use of Neon Proxy, users will enjoy a significant boost to throughput as the Neon EVM bundles transactions before sending them to the Solana mainnet. This means you can enjoy the best of both worlds as the established track record and security of Ethereum combines with the blazing speed and low fees of Solana. As this migration process from Ethereum to Solana is performed by Neon Proxy, the NEON token stands to benefit from this as it facilitates transactions on the Neon platform.
Orca: fluid DeFi trading on Solana
Orca is a decentralized exchange (DEX) built on the Solana blockchain, designed with a focus on user-friendliness and efficiency. Orca’s Concentrated Liquidity Automated Market Maker (CLMM) improves liquidity provision. It lets liquidity providers focus their capital in specific price ranges instead of spreading it across the entire spectrum. This model is similar to Uniswap v3 and helps improve capital efficiency. Meanwhile, the project's simple interface makes it easy for new and experienced DeFi users to use.
Orca also offers yield farming opportunities, where you can earn rewards by providing liquidity to specific pools or participating in token swaps. The ORCA token offers governance, liquidity provision, and earning yield through staking and liquidity pools. Its low transaction fees and fast processing times make it a preferred choice for those seeking to improve their DeFi strategies.
Solend: decentralized borrowing and lending
Solend is a decentralized lending and borrowing protocol built on the Solana blockchain, allowing you to access financial services permissionlessly and efficiently.
As a non-custodial platform, Solend lets you deposit various assets, including SOL, USDC, USDT, and other SPL tokens, to earn interest or use them as collateral for borrowing. Solana’s platform offers low fees and fast transactions, making it easy for users to interact with the protocol quickly and affordably.
Solend’s robust security and stability lies in its overcollateralized lending model. Here, you must provide collateral greater than the value of your loans, which minimizes the risk of defaults and helps to protect lenders. This model allows seamless lending and borrowing across different assets while maintaining competitive interest rates.
Solend’s SLND token lets holders vote on proposals that affect the protocol, such as interest rates, collateral, and adding assets. The token also rewards you for providing liquidity or participating in governance.
Helium: integrating with Solana to solve the PoC bottleneck
While not labeled as a typical Solana DeFi project, Helium is certainly a project on the Solana ecosystem worth watching. Since launching its Hotspot mining product in 2019, Helium Network has strategically integrated with the Solana blockchain to overcome scalability limitations and unlock powerful smart contract functionality. This move fueled the rapid growth of a unique project that built a global and decentralized wireless network for Internet of Things (IoT) devices.
Leveraging blockchain technology and proof-of-coverage (PoC) consensus, Helium incentivizes network participants to provide reliable coverage for connected devices, earning rewards in the form of various tokens. While initially relying on HNT tokens, the network now boasts a wider ecosystem with tokens like IOT and MOBILE. IOT enables data transfer, while MOBILE incentivizes mobile network operators to join the Helium family, further expanding its reach.
This innovative approach unlocks diverse applications, such as real-time asset tracking for logistics, air quality monitoring in smart cities, and secure machine communication in industrial settings. By building a scalable, community-driven, and cost-effective network, Helium has the potential to revolutionize how users connect and manage devices across numerous industries.
Pyth Network: powering DeFi with aggregated real-time data
The reliability of price oracles can't be understated in the world of DeFi, where miscalculations and latency issues can lead to millions in financial losses. That's where next-generation price oracles like Pyth Network come in handy. Thanks to defining features like high-frequency data updates every 400 milliseconds and the inclusion of confidence intervals to gauge data certainty, Pyth Network stands out against competing oracles like Chainlink as a solution to the age-old problem of blockchains being isolated from external, real-world data.
As DeFi continues to grow and DApps require accurate and timely market data, the team behind Pyth Network expects their offerings to be in high demand as its technology will help to accurately determine crucial pricing issues like asset prices and collateral requirements. PYTH is the native governance token of Pyth Network and grants holders the opportunity to participate in on-chain governance to determine the future development of Pyth Network.
Bonk Inu: Solana's beloved memecoin
When it comes to interesting projects on the Solana network, Bonk Inu is a dog-themed memecoin that might pique the interest of crypto beginners and DeFi enthusiasts. Despite its reputation as a memecoin, Bonk Inu isn't just your average joke cryptocurrency with no purpose. Rather, BONK's objective is to restore faith in the Solana ecosystem in the wake of the FTX collapse that led to Solana's undoing in 2022.
Bonk Inu first made headlines during its official debut when it directly airdropped half of its supply to prominent Solana community members. Since then, Bonk Inu has stated that it remains committed to contributing to the Solana ecosystem by attracting the attention of crypto curious beginners who have yet to experience the Solana network. The team has accomplished this by refining its BONK roadmap and developing a full-fledged ecosystem revolving around the BONK memecoin. This includes the BONKSWAP DEX, the BONKBOT Telegram trading bot, and DeFi integrations across familiar DApps like Jito for staking and Wormhole for bridging.
Zebec Protocol: maximizing capital efficiency with continuous-flow payments
Like how liquid staking is maximizing capital efficiency, Zebec Protocol is a revolutionary DeFi project built on the Solana blockchain that's rewriting the rules of payment automation. While traditional Web2 businesses still rely on archaic processes and the use of a middleperson, Zebec disrupts the entire process and makes key financial processes like payroll management, dollar-cost averaging over time, and treasury management a breeze.
Its flagship product, Zebec Pay, emphasizes efficiency and personal ownership of wages as intermediaries are removed from transactions and transactions capitalize on the speed and security of the Solana network. Besides Zebec Pay, the team has also launched other services including Zebec Card, Zebec Safes, and Web3 banking. These work in tandem to offer an exclusive financial ecosystem that thrives on Zebec's continuous-flow payments, which offers a steady flow of funds and does away with situations like periodic payouts and payment bottlenecks. Its token, ZBC, underpins this entire protocol and offers users a means of participating in its governance and utility. Some examples of utility include bonus rewards on the Zebec Card and payment for gas fees on the Nautilus chain.
Final words and next steps
Solana's recent upswing paints a promising picture for its evolving DeFi ecosystem. While it faces competition from established giants, Solana is evidently attracting an array of promising projects. From pioneering liquid staking to bridging interoperability gaps, Solana's DApps are showing they're no slouch when it comes to pushing the boundaries of DeFi. Yet, Solana's journey won't be without challenges. While it attempts to shed its network instability reputation amid fierce competition, Solana has managed to carve a niche in the blockchain space with its unique blend of speed, scalability, and innovation. As Solana refines its technology and fosters its community, its ecosystem is poised to disrupt the status quo and reshape the crypto landscape.
Regardless of whether you're a seasoned DeFi veteran or a Solana beginner, it might be worth keeping your eyes on Solana, being an innovative force with the potential to revolutionize the way we interact with DeFi ecosystems.
FAQs
Solana’s strong community, market rebound, memecoin excitement, and growing DeFi ecosystem have all contributed to its success. These factors, plus innovations like the Wormhole bridge for cross-chain compatibility, keep Solana relevant and contribute to its growth.
The Wormhole bridge connects Solana to other major blockchains. Doing so allows assets to move quickly between connected chains. This capability helps to grow the Solana ecosystem and boost its role in DeFi.
Solana’s growing projects to watch include Jito, Helium, Pyth Network, and Marinade Finance. They contribute to liquid staking, real-time data feeds, and decentralized wireless networks.
Cryptocurrency transactions and DeFi activities may have tax implications depending on your jurisdiction. Seek professional advice to understand your tax obligations.
Solana offers promising projects and tokens, but there are risks involved. It’s always important to do your own research as you explore the Solana ecosystem. Never participate in a project you can’t afford, and stay informed to protect your digital assets.
While decentralized finance holds immense potential, it's also an emerging technology with inherent risks. That's why it's key to do your own research, choose reputable projects on the Solana ecosystem, and practice caution when engaging in DeFi activities.
© 2024 OKX. This article may be reproduced or distributed in its entirety, or excerpts of 100 words or less of this article may be used, provided such use is non-commercial. Any reproduction or distribution of the entire article must also prominently state: “This article is © 2024 OKX and is used with permission.” Permitted excerpts must cite to the name of the article and include attribution, for example “Article Name, [author name if applicable], © 2024 OKX.” No derivative works or other uses of this article are permitted.
