Ethereum Vs Solana. Which is Better?

Ethereum and Solana are two leading layer-1 blockchain platforms aiming to transform decentralised technologies and usher in the new era of Web 3.0. While both platforms possess competencies in decentralised finance (DeFi) and smart contracts, they use different approaches and technologies for the same. For this reason, Ethereum and Solana are always touted against one another by crypto analysts, developers and investors alike, with the latter often being termed an ‘Ethereum Killer’.

Solana has emerged as a formidable competitor to Ethereum, with an exploding DeFi expanse, a wide repertoire of meme coins, a steadily climbing user base, and growing popularity among developers. Despite Solana’s considerable growth, Ethereum still stands tall with a 10x total value locked compared to Solana and a mammoth $399.04B market cap.

Solana’s high speed and low transaction costs, coupled with its wide-scale adoption, compared to Ethereum’s complex expanse of smart contracts and well-established development environment, leave stakeholders asking the same question: How do they compare?

Let us dissect these dominant blockchain platforms to draw a comprehensive comparative analysis and determine, which is better? Ethereum or Solana.

Ethereum Vs Solana. Which is Better?

History of Ethereum

Ethereum was born from the need to overcome Bitcoin’s drawbacks, founded by programmer Vitalik Buterin. Buterin envisioned a platform to power decentralised apps, transfer value and execute code and hence released the whitepaper for Ethereum in 2014, followed by a crowd sale to raise funds for further development.

Finally, in 2015, the Ethereum block launched and quickly established itself as a blockchain platform for developers. Although Ethereum faced challenges concerning high transaction fees and platform congestion, the ecosystem has since adopted various upgrades and enhancements, including layer-2 solutions like Arbitrum, Mantle, and Polygon, landmark upgrades like the Merge and Dencun upgrade, and the transition from the proof-of-work consensus mechanism to the proof-of-stake consensus mechanism.

Today, Ethereum is the second-biggest blockchain platform after Bitcoin. It is a leading ecosystem for developing dApps, with a Total Value Locked (TVL) of $66 billion, a total market cap second only to Bitcoin, over 4000 dApps, and a native token ETH considered a valuable investment asset.

History of Solana

Anatoly Yakovenko and Raj Gokal founded Solana Labs in 2018, which launched Solana in 2020. Solana is a smart contract blockchain designed to process fast transactions at low speeds. Built on a unique Proof-of-History consensus mechanism, it is known for its lightning-fast speed and low transaction costs, making it a breeding ground for DeFi, NFTs, and Web 3 applications that need speed and reliability.

Thanks to its sound technical capabilities, Solana soon became a preferred platform for developers to delve into blockchain projects, earning Solana the ‘Ethereum Killer’ tag. Solana has achieved tremendous success in developer retention, developer experience and overall growth, especially in the meme coin space.

Today, Solana is the 5th largest blockchain platform by market capitalization and a bustling roadmap ahead including a Solana smartphone, much-anticipated technical upgrades and a growing repertoire of 400+ projects.

Comprehensive Comparison of Ethereum & Solana

·   Metrics Comparison of Ethereum & Solana

When we compare both these platforms based on popular metrics such as total value locked, total number of validators and user base, Ethereum is a mile ahead of Solana. Ethereum has a TVL of over $66 billion, making it the platform with the largest market share across all blockchains today.This is a testament to Ethereum’s foremost position in the DeFi space and its maturity as a blockchain platform.

While Solana's ecosystem is growing quickly, it still has fewer projects, a smaller developer base, and a smaller TVL than Ethereum. Currently, Solana’s TVL is around $11.77 billion. For the uninitiated, TVL signifies the assets currently being held in DeFi protocols within a blockchain's ecosystem.

Source: DefiLlama

When we look at transaction speed, Solana far outpaces Ethereum, with 2,600 transactions per second, while Ethereum processes 15 transactions per second. As a result, Solana delivers a better user experience. Ethereum gas fees vary with network congestion, often exceeding $1. Solana offers significantly low transaction costs, around 0.0001 SOL ($0.02), making it the ideal choice for high-frequency transactions.

Ethereum has over 100 million funded active addresses, consolidating its position as a leading ecosystem for developing dApps. Over the years Ethereum has been the most preferred platform for developers. On the other hand, Solana has over 50 million addresses, not all of which are funded.

With the increasing popularity of decentralised governance, Solana offers a relatively centralised set-up with more than 4,500 Solana validators compared to Ethereum’s 1,000,000 validators. Solana’s limited validators make it more susceptible to disruptions and outages.

·   Ecosystem Comparison of Ethereum & Solana

While Ethereum and Solana have a common objective of enabling developers to build and deploy decentralised applications, it is their respective ecosystems that make them different.

Ethereum is based on a Proof of Stake (PoS) consensus mechanism, while Solana uses a combination of Proof-of-Stake & Proof-of-History mechanisms. While the former involves validators staking their cryptocurrency as collateral to earn rewards for helping the blockchain, Proof of History uses a cryptographic clock to create a tamper-proof sequence of timestamps.

The key difference between Solana and Ethereum lies in their architectural approaches: Solana takes a monolithic approach, while Ethereum follows a modular strategy.

Simply put, Solana is a single-layer blockchain that handles all operations in one structure. This design enables fast transactions and low latency, ideal for real-time apps and user experience. However, it can face challenges with scaling and flexibility for future innovations.

Ethereum uses a modular design, splitting functions into separate layers. Layer-2 solutions like Optimism and Arbitrum handle transactions. This reduces strain on the main chain, improving speed and cost. Though this approach offers flexibility, it can complicate integration and affect user experience.

Both Solana and Ethereum have dynamic and diverse dApp ecosystems, each offering distinct advantages for developers and users. These platforms have become centres of innovation in decentralized finance (DeFi), non-fungible tokens (NFTs), and more.

As of January 2024, there are over 4000 dApps on the Ethereum blockchain across deFi, DEX aggregators, wallets, gaming, payments, infrastructure, social media and more. Since Ethereum was the first platform for dApps and smart contracts its benefits from the first-mover advantage are prevalent even today. UniSwap, OpenSea, AAVE and 1inch Network are some of the biggest dApps in the blockchain world that are part of the Ethereum ecosystem. Ethereum is the origin of Decentralised Finance (DeFi), hence boasts of housing leading DeFi apps such as MarkerDAO and Compound.

Although Solana is a relatively young ecosystem, it has quickly developed a robust network of dApps. Solana has 400+ dApps across DeFi, payments, NFTs, meme coins, gaming, automated market makers, DEX, and more such as Raydium, Orca, Dexlab, Jupiter, Bonk, WIF, and more.

Solana boasts of the widest repertoire of meme coins thanks to its sound technical capabilities and low transaction costs. With over $20 billion market cap from meme coins, it enjoys the biggest chunk of the meme coins pie in the blockchain world. As meme coins are speculated to gain big in the upcoming bull run, delivering a CAGR of over 26%, we can expect this crypto niche to be one of the game-changers for Solana’s growth in the coming years.

Recently in January 2025, President Donald Trump launched his meme coin $TRUMP on the Solana blockchain. Amassing a market cap of $7.25 billion, it has already become one of the most valuable meme coins in the Solana ecosystem.

Due to Ethereum’s high transaction processing cost and relatively slower processing speed, this blockchain platform hasn’t capitalized on the meme coin furore as Solana has.

When we speak of stablecoins, although Solana has made considerable progress in the stablecoins niche, adding $1 billion worth of stablecoins in December 2024 alone to reach its highest stablecoin valuation of almost $10 billion, the blockchain platform is still far behind Ethereum on this front.

When we speak of stablecoins, although Solana has made considerable progress in the stablecoins niche, adding $1 billion worth of stablecoins in December 2024 alone to reach its highest stablecoin valuation of almost $10 billion, the blockchain platform is still far behind Ethereum on this front.

Source:Coinpedia.org

Ethereum dominates the stablecoin market, holding over half at $89 billion. Thanks to its robust infrastructure, Ethereum is the ideal ecosystem for stablecoin transactions. Solana currently holds merely a fraction of Ethereum’s size of the pie. As stablecoins are essential to fostering liquidity in the blockchain world, Ethereum’s stronghold in this space gives it a competitive edge over other platforms and offers a safety net for the demand for ETH.

·   Tokenomics of ETH and SOL

Ethereum’s native token, ETH, is used to pay for transaction fees and computational services on the network along with interactions with dApps, and minting NFTs. It’s also used for staking in the Proof of Stake (PoS) system.

SOL, the native token of Solana, also has several uses, such as paying for transaction fees and staking to help secure the network. Similar to ETH, SOL also functions as an investment asset and a store of value.

Before the Merge, a software update that transitioned Ethereum from a proof-of-work (PoW) to proof-of-stake (PoS) in September 2022, Ethereum followed an inflationary issuance model and had no capped supply. After 2022, the issuance of ETH has significantly decreased, along with a portion of transaction fees being burned, leading to decreased ETH supply over time.

SOL has a total supply of around 592 million tokens. Its inflationary model slowly releases new tokens to reward validators and help secure the network. With over 100 million SOL yet to be issued into circulation, the token stands a good chance to attract more developers and investors.

·   Upcoming Upgrades Comparison

Solana

Upcoming Solana upgrades include Firedancer and Agave 2.0. The Firedancer validator upgrade will significantly increase Solana’s capacity, potentially handling up to 1 million transactions per second. This will make Solana the fastest blockchain in the world, the implications of which will be massive across the entire blockchain world.

While Solana ETFs have been approved in Brazil and Ethereum ETFs received SEC’s approval in May 2024, Solana ETFs in the US are yet to receive the nod, with applications currently underway. The potential approval of Solana ETFs will be something to watch closely, as this could boost the demand and use of the platform and SOL, further bridging the gap between Ethereum and Solana.

Further, Solana Labs plans to launch a mobile phone with a built-in crypto wallet in 2025. This phone, called Solana Seeker, will usher in ease of initiating and executing transactions, leading to a trading frenzy on the platform.

Ethereum

The Dencun upgrade, one of the biggest changes in the Ethereum ecosystem was ushered in on March 13, 2024, to increase network scalability, and security and reduce transaction fees. It also included dank sharding, which allows data to be temporarily stored in transactions instead of permanently stored on the blockchain. Up next is the much-anticipated Pectra upgrade, which is touted to be even more powerful and impactful than Dencun, making Ethereum more scalable, secure and stable, significantly improving user experience and the proof of stake (PoS) protocol.

Vitalik Buterin also revealed that in 2025 the ecosystem’s focus is going to be on improving interoperability between layer-1 and layer-2 networks including chain-specific addresses and shared tools that ensure seamless movement between the two.

·   Popularity & Community Support – Ethereum Vs Solana

Ethereum has one of the largest developer communities in the blockchain world. Through the years, this platform has amassed a wide array of tools, resources, partnerships and use cases. Ethereum has also fostered an ideal ecosystem for any new developer through hackathons, education resources, grants and more. ETHDenver is a case in point, a community event that supports numerous developers and projects that eventually add to Ethereum’s rich ecosystem of dApps.

Solana also enjoys massive investor, developers and community support thanks to its game-changing technical capabilities. With its strong foothold in meme coins, Solana is also a Gen-Z favourite thanks to its association with internet memes and social media trends. The meme coin frenzy on Solana has seen tokens like CHILLGUY, GOAT, BONK, and WIF gain traction, fuelled by its vibrant and active communities attracting investors.

Both platforms enjoy strong community, developer and investor interest aside from lucrative strategic partnerships.

·   Investment Viability – ETH vs SOL

With the upcoming crypto bull run in 2025, all eyes are on altcoins that promise to deliver the biggest gains.

ETH has truly reaped the benefits of the Dencun upgrade and the ETF approval by showing tremendous price resilience in 2024. Since the approval of spot Ethereum ETFs, the ecosystem has added $2.2 billion in net inflows. Ethereum has gained from greater visibility in traditional financial markets, and accessibility by a broader user base including institutions, thereby improving the overall market sentiment and confidence in ETH.

Stepping in 2025, we expect a sustained upward trend in ETH price levels, supported by the upcoming Pectra upgrade, increased adoption of layer-2 solutions and Ethereum’s growing hold in the NFT, Real World Asset (RWAs) and DeFi niches.

SOL, the native token of Solana, will also continue to enjoy dominance on the price board as a reflection of its growing daily transactions, record-breaking new users added every month and the launch of the much-anticipated Firedancer upgrade in 2025.

The upcoming bull run will see unprecedented action in the meme coins space - the almost instant upsurge of the Trump meme coin is only a trailer of what lies ahead. With Solana leading all blockchain platforms in the meme coin niche, we can expect this to be an absolute game-changer for SOL in 2025, catapulting the token to new price highs.

Additionally, should Solana Labs secure the SEC nod for Solana ETFs this year, the token will enjoy an all-new wave of optimism on the price board.

Hence, in terms of investment prospects, both ETH and SOL shine bright.

·   Can Solana reach 100 million users like Ethereum?

Ethereum reached 100 million users in 2023, capitalising on its almost decade-long existence and well-established environment for developing f dApps.

Solana has witnessed rapid user growth in recent years, clocking in 50 million active addresses as of September 2024. Given Solana’s sound technical capabilities, growing stablecoin & meme coin presence along with a repertoire of leading dApps, we can expect Solana to reach 100 million users like Ethereum. However, this feat cannot be achieved in the short term and may take Solana months or even years to clock in 100 million users.

FAQs

Can Solana Beat Ethereum?

There is no denying that Solana trumps Ethereum on several metrics such as transaction speed, low transaction costs, high throughput, security and onboarding new users. Having said that, Ethereum still enjoys a dominant position among blockchain platforms thanks to its strong 100 million and growing active users, mature and resource-rich development ecosystem with diverse use cases, significant stablecoin consolidation and 4000+ dApps across various niches.

Solana has been outpacing Ethereum in attracting new capital, delivering a 122% increase in market value in 2024, compared to Ethereum’s 39% growth in the same period.

However, one must note that the price of one ETH is around $3,165, which is 1270.13% more than the price of one SOL, $231. Also, Ethereum’s market cap of $399 billion is sizably more than Solana’s $112 billion. So, although Solana’s pace of growth is currently faster than Ethereum's, Ethereum is much ahead of Solana on several grounds.

Is Solana Better than Ethereum?

Solana is ahead of Ethereum in certain aspects such as transaction throughput, gas fees and transaction speed. Having said that, Ethereum's well-established dApps ecosystem with diverse use cases, its pioneering role in DeFi and its legacy as one of the oldest and biggest blockchain platforms with years of community engagement to its credit continue to give Ethereum an edge above newer platforms such as Solana.

Both Ethereum and Solana have their respective strengths and drawbacks. Ethereum continues to enjoy dominance and relevance in the blockchain world, along with its strong network of layer-2 solutions. Given the stark difference in the market cap and price of ETH and SOL, Solana has plenty of progress to rub shoulders with Ethereum.

Can Solana Flip Ethereum?

Ethereum has, for many years, been the most popular blockchain for smart contract development, although Solana outperforms Ethereum in certain aspects.

Only time can tell if Solana can make good its tagline of being an ‘Ethereum Killer’. Although Solana is growing at lightning-fast speed, reaching 3.25 million daily users and 35.99 million daily transactions in September 2024, aside from its rising popularity among developers and booming market dominance in the meme coin niche, Solana still has a lot to achieve to flip Ethereum.

Solana’s market cap is around 30% of Ethereum’s $399 billion market cap. Aside from this, Solana only has a fraction of Ethereum’s vast repertoire of dApps, resources, partnerships and use cases. Ethereum also enjoys a relatively more decentralised functioning vs Solana, with its 1,000,000 Ethereum validators. Ethereum's diverse ecosystem and strong security make it appealing to institutional investors seeking stability and decentralisation, especially with the introduction of exchange-traded funds (ETFs).

Hence, although Solana is a standout contender to Ethereum in the current blockchain epoch, it still has more to achieve to flip Ethereum.