Yield Farming on Solana in 2024: Ecosystem Overview

Solana has been a conversation starter in DeFi circles for nearly half a decade now. Since its inception in 2017 by Anatoly Yakovenko, Solana’s journey has been marked by notable highs and challenging lows; 2022 proved to be a crucible. Plagued by network outages and facing the headwinds of a tumultuous market, the platform encountered skepticism and intense scrutiny.

Netizens were even calling it Slowlana. It was bad.

Source: Twitter

As we close out 2023, the narrative surrounding Solana has shifted towards recovery and potential. The burning question in the minds of seasoned DeFi participants is whether Solana has not only weathered the storm but emerged stronger, poised to redefine its role in the DeFi ecosystem. According to information from DeFiLlama, Solana is still the top Non-EVM blockchain by TVL.

Source: DeFiLlama

In this article, we will explore the technical enhancements Solana has implemented post-2022, scrutinize its current market dynamics, and evaluate the evolving landscape of its DeFi and yield farming ecosystem in order to answer the question: where is Solana headed in 2024?

Solana’s Recovery from 2022

In the aftermath of a challenging 2022, Solana has shown signs of a robust recovery and resurgence in 2023. This section delves into key aspects of Solana’s rebound, focusing on technical network improvements, market performance, total value locked in DeFi, and developer engagement.

1. Network Stability Improvements

Solana has undergone multiple significant improvements since October 2022, which include a smooth release of v1.14 to the mainnet. This was part of the improvements to the software upgrade process proposed after an outage on February 25, 2023, which occurred during a previous software upgrade. Notably, according to Solana’s most recent performance report, the network has experienced 100% uptime since this date.

According to data in the aforementioned report, the network’s performance has improved in terms of uptime, the ratio of non-voting-to-voting transactions, time to produce a block, and average and max transactions per second.

2. Market Performance

Token Recovery: Solana’s native token, SOL, experienced a 22% surge on November 10, 2023, breaking past the $54 mark for the first time since May 2022. It then went on to put in a local top around $68 on November 16, 2023.

Source: SOL-USD on Coinbase via TradingView

While far from a full recovery to the previous 2021 high around $240, early signs of life are there for sure. This all against the backdrop of FTX’s liquidation, who as of the last update held about $1.16 billion in SOL. Their liquidation process has been structured to avoid market flooding, with initial limits set to $50 million per week, and later increases subject to approval by committees representing FTX debtors. The markets appear to be absorbing the sales well.

Source: Twitter

3. Total Value Locked in DeFi

Solana’s TVL inched past $10b in Nov, 2021, before crashing all the way down to $210m by Jan 1st, 2023 — a nearly 50x decrease in ~14 months.

Source: Solana TVL via DeFiLlama

Since this early 2023 low, Solana’s TVL has continued to climb gradually, picking up steam in Q4 and currently sitting at $633m — a solid 3x since the lows.

Source: Solana TVL via DeFiLlama

While still below pre-FTX bankruptcy figures, early signs of a positive trend in Solana’s TVL are forming.

4. Developer and Community Engagement

Sustained Development Activity: The number of developers working on Solana has been keeping an exceptional pace given its 2022 circumstances. In 2021, Solana was ranked as a medium-sized ecosystem with less than 1000 developers. As of 2023, there are over 2,000 active developers on Solana and still adding as many as 30 new ones each month. This places Solana second only to Ethereum in terms of the number of active developers, with Ethereum having a whopping 5,000+.

Source: DeFiLlama

Diverse Range of DeFi Activity: The Solana community and DeFi ecosystem encompass a variety of services such as liquidity provision, automated market making, and staking solutions, not to mention the vibrant Solana NFT environment. Each protocol, with its unique approach and functionality, not only contributes to the robustness of the Solana blockchain but also reflects the vibrant, collaborative spirit of its developers and users.

Top 10 Protocols on Solana by TVL:

Source: DeFiLlama

Now a brief overview of the top 10 protocols on Solana by TVL heading into 2024.

Marinade Finance | $577m TVL:

A DAO with a staking protocol on Solana, allowing users to stake natively or liquid stake to a pool of over 100 high-performing validators. Offers an mSOL token for liquid staking​​.

For more information about Marinade Finance and their specific features, please visit their website or consult their official docs.

Jito | $399m TVL:

A protocol on Solana for democratizing access to MEV with software tools. Contributes to JitoSOL, a liquid staking token on Solana​​.

For more information about Jito and their specific features, please visit their website or consult their official docs.

Marginfi | $144m TVL:

A decentralized portfolio margining protocol for trading on Solana, providing a unified account for margin access and portfolio composition​​.

For more information about Marginfi and their specific features, please visit their website or consult their official docs.

Solend | $135m TVL:

A DeFi protocol for lending and borrowing on the Solana blockchain, similar to Aave or Compound. Users can earn interest by lending crypto assets and use deposits as collateral for borrowing​​.

For more information about Solend and their specific features, please visit their website or consult their official docs.

Orca | $84m TVL:

A DEX and AMM protocol on Solana focusing on capital efficiency and human-centered design, part of the decentralized finance ecosystem​​.

For more information about Orca and their specific features, please visit their website or consult their official docs.

Raydium | $58m TVL:

An AMM and DEX built on Solana, designed to utilize Solana’s high transaction throughput and low fees, offering a multifaceted DeFi service​​.

For more information about Raydium and their specific features, please visit their website or consult their official docs.

Lido on Solana | $57m TVL:

A Lido-DAO governed liquid staking protocol. Staking SOL tokens with Lido issues an on-chain representation of SOL staking position, known as stSOL​​. While still holding a relatively high TVL at the time of writing, it’s worth noting that Lido is discontinuing its staking activities on Solana, which you can learn more about from their blog.

For more information about Lido (Solana) and their specific features, please visit their website or consult their official docs.

Drift | $41m TVL:

An open-source decentralized exchange on Solana, offering transparent and non-custodial trading. Enables trading with up to 10x leverage, borrowing or lending, staking, and liquidity provision​​.

For more information about Drift and their specific features, please visit their website or consult their official docs.

BlazeStake | $39m TVL:

A non-custodial liquid stake pool protocol, partly built by Solana Labs and audited by three organizations. Part of the staking rewards support the Solana ecosystem​​.

For more information about BlazeStake and their specific features, please visit their website or consult their official docs.

JPool | $38m TVL:

A stake pool on the Solana blockchain, providing high-yield rewards on staked SOL​​.

For more information about JPool and their specific features, please visit their website or consult their official docs.

More Notable DeFi Protocols on Solana in 2024:

MonkeDAO: The first NFT DAO on Solana, focusing on digital collectibles and creating a large community of Web 3.0 enthusiasts, with access to various NFT collections​​.

For more information about MonkeDAO and their specific features, please visit their website or consult their official docs.

Tulip Protocol (formerly SolFarm): A DeFi platform and the first yield aggregation dApp on Solana, aiming to provide high APYs with low fees. Tulip Protocol offers Auto Vaults, Lending, and Leverage Farming services​​.

For more information about SolFarm and their specific features, please visit their website or consult their official docs.

Mango Markets: A decentralized crypto trading platform offering lending, borrowing, and swapping services, along with up to 5x leverage trading. Governed by its DAO, and all powered by flashloans​​.

For more information about Mango Markets and their specific features, please visit their website or consult their official docs.

Kamino Finance: A DeFi platform on Solana specializing in liquidity mirroring and yield optimization, offering enhanced yield farming opportunities and higher APYs with a user-friendly interface.

For more information about Kamino Finance and their specific features, please visit their website or consult their official docs.

Looking Forward to Solana DeFi: 2024

Nobody knows how this is going to play out, but there are a lot of positive signs. Let’s imagine we’re bullish. The main question then has to be: How can I farm yield on Solana in 2024?

The answer is the same as it always is. You need to look. Moreover, you need to know where to look, and then look in those places constantly like it’s a full-time job in order to manage your portfolio and always be on top of the best yield farming opportunities.

Now we have a new question: Isn’t there a better way?

The answer is one that shouldn’t surprise you. AI has changed everything — yield farming doesn’t need to be a full-time job anymore. Instead of manually reviewing dozens of web pages searching for the best yields, some choose to use DeFi analytics & aggregator tools such as One Click Crypto.

One Click Crypto is the front page of DeFi yield where you can explore 20,000+ yield farming opportunities from 14+ networks, all in one place. It also has an embedded AI portfolio builder that can help craft a personalized strategy tailored individually for you.

Here’s an example of a cross-chain portfolio including a Solana pool generated by One Click Crypto:

Sign up for One Click Crypto today and gain access to 20,000+ yield farming opportunities on all blockchains including Solana — https://defi.oneclick.fi/

Disclaimer: This article, including insights on Solana Yield Farming and other DeFi strategies, is for informational purposes only and should not be considered as financial advice, investment recommendations, or an endorsement of any particular investment or strategy. The cryptocurrency and DeFi markets are highly volatile and unpredictable. Past performance is not indicative of future results. The author makes no representations or warranties regarding the accuracy, completeness, or timeliness of the information provided. Readers should conduct their own research and consult with independent financial advisors before making any investment decisions. By using this information, you agree that the author is not liable for any losses or damages arising from your investment choices.