Solana has quietly become one of the biggest DeFi ecosystems in crypto. With over $9 billion in total value locked, transaction fees under $0.001, and settlements that take less than a second, it's one of the most practical blockchains for actually using DeFi — not just reading about it.
But if you're new to all of this, DeFi can feel overwhelming. Lending, staking, liquidity pools, yield farming — the terminology alone is enough to scare people off.
This guide strips away the jargon and walks you through everything step by step. By the end, you'll understand what Solana DeFi is, how it works, and how to start using it safely.
What Is DeFi?
DeFi stands for "decentralized finance." It's a collection of financial tools — lending, borrowing, trading, earning interest — that run on blockchain technology instead of through banks or traditional financial institutions.
The key difference: there's no middleman. Instead of a bank deciding whether to approve your loan, a smart contract (a piece of code running on the blockchain) handles everything automatically. You interact with these protocols directly from your wallet.
On Solana specifically, DeFi transactions are fast (under a second) and cheap (fractions of a cent). This makes it practical for everyday use, unlike some blockchains where a single transaction can cost $5-50 in fees.
What You Need to Get Started
Before diving into any DeFi protocol, you need three things:
1. A Solana wallet
This is your gateway to everything. The most popular options are:
- Phantom — the most widely used Solana wallet, great for beginners with a clean interface
- Solflare — feature-rich with built-in staking and DeFi access
- Backpack — newer wallet with exchange features built in
All of these are free browser extensions and mobile apps. Download one, create a new wallet, and write down your seed phrase (the 12 or 24 words it gives you). Store this somewhere safe offline — if you lose it, you lose access to your funds permanently.
2. SOL tokens
You need SOL to pay for transaction fees and to use most DeFi protocols. You can buy SOL on any major exchange (Coinbase, Binance, Kraken) and send it to your wallet address.
Start small — you don't need much. Even $20-50 in SOL is enough to explore and learn.
3. Basic understanding of what you're doing
This guide will give you that. Read through the sections below before connecting your wallet to anything.
The Main Types of Solana DeFi
DeFi isn't one thing — it's an ecosystem of different financial tools. Here are the main categories you'll encounter on Solana:
1. Decentralized Exchanges (DEXs) — Swapping Tokens
DEXs let you trade one token for another without using a centralized exchange. On Solana, the most important one to know is:
Jupiter — this is Solana's leading DEX aggregator. Instead of checking prices on multiple exchanges, Jupiter automatically finds you the best price across all of them. Think of it as a search engine for token prices. If you're swapping tokens on Solana, you'll almost always use Jupiter.
Other notable DEXs include Raydium (an automated market maker with deep liquidity), Orca (known for its clean, simple interface), and Meteora (focused on dynamic liquidity pools).
How it works in practice: You connect your wallet to Jupiter, select the token you want to swap from (e.g., SOL) and the token you want to swap to (e.g., USDC), enter the amount, and confirm the transaction. It happens in about a second and costs a fraction of a cent in fees.
2. Lending and Borrowing — Earn Interest or Access Liquidity
Lending protocols let you deposit your crypto and earn interest on it, similar to a savings account. Others can borrow your deposited crypto by putting up their own assets as collateral.
The major lending protocols on Solana are:
- Kamino Finance — the largest lending protocol on Solana with around $2.8 billion in TVL. It offers automated strategies and is popular with both beginners and institutions.
- Jupiter Lend — launched in August 2025 and grew to over $1.5 billion in TVL incredibly fast. It integrates tightly with Jupiter's trading features.
- Save (formerly Solend) — one of the oldest and most established lending platforms on Solana. Simple interface, great for beginners.
- Marginfi — built for more advanced users, with isolated markets and sophisticated risk management.
How it works in practice: You deposit tokens (like USDC or SOL) into a lending protocol. The protocol lends them to borrowers and pays you interest. Rates vary depending on supply and demand — typically somewhere between 2-10% APY for stablecoins.
The risk: If the protocol gets hacked or has a smart contract vulnerability, you could lose your deposit. This has happened in crypto before. Never deposit more than you can afford to lose.
Staking means locking up your SOL to help secure the Solana network. In return, you earn staking rewards (currently around 6-8% APY).
The problem with traditional staking is that your SOL is locked — you can't use it for anything else. Liquid staking solves this by giving you a token that represents your staked SOL, which you can then use across DeFi.
The main liquid staking providers on Solana are:
- Jito — the largest liquid staking protocol on Solana. When you stake SOL through Jito, you receive JitoSOL, which earns staking rewards plus additional MEV rewards.
- Marinade Finance — one of the original Solana staking protocols. You receive mSOL in return, which can be used throughout DeFi.
- Sanctum — lets you swap between different liquid staking tokens easily and access a wide range of LSTs.
How it works in practice: You deposit SOL into Jito and receive JitoSOL. Your JitoSOL automatically appreciates in value relative to SOL as staking rewards accumulate. You can use JitoSOL as collateral in lending protocols, trade it, or simply hold it and earn yield passively.
4. Yield Farming and Liquidity Provision — Higher Returns, Higher Risk
Yield farming involves providing liquidity to DEXs and earning fees from trades that happen in your liquidity pool. It's more complex than simply staking or lending, and the risks are higher.
How it works: You deposit a pair of tokens (e.g., SOL + USDC) into a liquidity pool. When people trade between those tokens, they pay a small fee, and you earn a share of those fees proportional to your contribution.
The catch — impermanent loss: If the price of one token in your pair moves significantly compared to the other, you can end up with less value than if you had just held both tokens. This is called impermanent loss.
Platforms like Kamino offer automated vault strategies that manage liquidity positions for you, rebalancing as prices move. This reduces the complexity but doesn't eliminate the risk.
Recommendation for beginners: Skip yield farming until you're comfortable with the basics. Start with simple staking or lending.
5. Perpetual Futures — Leveraged Trading
Perpetual futures (or "perps") let you trade with leverage — meaning you can control a larger position than your actual capital. On Solana, the main platforms are:
- Drift Protocol — Solana's leading perpetuals platform with deep liquidity and fast execution
- Jupiter Perpetuals — integrated into Jupiter's ecosystem, letting you trade with up to 100x leverage
Warning for beginners: Leveraged trading can amplify both gains and losses. You can lose your entire deposit in minutes if a trade goes against you. This is not where you should start.
A Practical Getting-Started Roadmap
Here's the order I'd recommend for a complete beginner:
Week 1: Set up and explore
- Install Phantom or Solflare wallet
- Buy a small amount of SOL ($20-50) and send it to your wallet
- Do one token swap on Jupiter to get comfortable with the process
- Explore the interface — click around, read descriptions, get familiar
Week 2: Try staking
- Stake a portion of your SOL through Jito or Marinade
- Receive your liquid staking token (JitoSOL or mSOL)
- Understand that this is now earning yield passively
Week 3: Explore lending
- Deposit a small amount of USDC or SOL into Kamino or Save
- Watch how interest accrues
- Understand the risks before increasing your deposit
Week 4+: Go deeper based on interest
- Explore more complex strategies only after you understand the basics
- Read documentation for any protocol before depositing significant amounts
- Follow Solana DeFi updates to stay informed about new opportunities and risks
Safety Rules for Solana DeFi
These are non-negotiable, regardless of your experience level:
Never invest more than you can afford to lose. Smart contract exploits, hacks, and rug pulls are real. Every dollar you put into DeFi is at risk.
Always verify URLs. Phishing sites that look identical to real DeFi protocols are everywhere. Bookmark the official sites and never click links from Discord, Telegram, or Twitter DMs.
Start small. Do your first transaction with a tiny amount. Make sure you understand what happened before scaling up.
Revoke approvals regularly. When you connect your wallet to a DeFi protocol, you grant it permission to interact with your tokens. If that protocol gets compromised, those approvals can be exploited.
Use a separate wallet for DeFi. Don't use the same wallet that holds your long-term savings for experimental DeFi plays.
Read before you sign. Every transaction in DeFi asks you to approve something. Read what you're approving. If a transaction looks suspicious, reject it.
Understand that APY is not guaranteed. A protocol showing 20% APY today might show 2% next week. High yields often come with high risk.
Key Terms Glossary
TVL (Total Value Locked): The total amount of crypto deposited in a protocol. Higher TVL generally indicates more trust and liquidity, but it's not a guarantee of safety.
APY (Annual Percentage Yield): The yearly return you'd earn on a deposit, including compounding.
Slippage: The difference between the expected price of a trade and the actual price you get.
Impermanent Loss: The potential loss from providing liquidity to a pool when the price ratio of your deposited tokens changes.
Collateral: Assets you deposit as security when borrowing.
Liquidation: When a borrower's collateral value falls below a certain threshold, the protocol automatically sells it to protect lenders.
MEV (Maximal Extractable Value): Extra value that can be captured from reordering transactions within a block.
Seed Phrase: The 12 or 24 words that give complete access to your wallet. Never share it with anyone, ever.
Useful Tools for Tracking Your DeFi Activity
- Step Finance — portfolio dashboard that shows all your Solana DeFi positions in one place
- Birdeye — token charts, prices, and analytics
- DefiLlama — track TVL and yields across all Solana DeFi protocols
- Solscan — Solana blockchain explorer to verify transactions
We review all of these tools and more on MadeOnSol.com.
The Bottom Line
Solana DeFi is one of the most accessible and practical DeFi ecosystems in crypto today. Sub-second transactions, near-zero fees, and a growing selection of mature protocols make it a great place to learn.
But "accessible" doesn't mean "risk-free." Every protocol carries smart contract risk. Every market can move against you. The best approach is to start small, learn by doing, and gradually increase your involvement as your understanding grows.
Don't try to do everything at once. Master one thing — whether it's simple token swaps, staking, or lending — before moving to the next. The protocols will still be there when you're ready.
Disclaimer: This guide is for educational purposes only. DeFi involves significant financial risk, including the potential loss of all deposited funds. MadeOnSol does not provide financial advice. Always do your own research before using any DeFi protocol.
