Solana vs. Ethereum: A Deep Dive into Two Leading L1 Blockchains
Solana and Ethereum are two leaders in the smart contract space, yet these Layer-1 giants have distinct approaches to scalability, security, and decentralisation. Understanding these differences is key for anyone in crypto, as they impact performance, costs, and ideal applications.
The difference between Ethereum and Solana is like comparing a highly secure, established bank with extensive services to a newer, ultra-fast payment processor - Ethereum prioritizes security and decentralization with a vast ecosystem, while Solana focuses on lightning-fast transactions at rock-bottom costs.
Why compare them? Their unique designs lead to varied strengths, directly influencing user experience and project outcomes. This article takes a deep dive into their core technologies, ecosystems, security, and adoption trends, helping you understand their respective strengths.
What Is Ethereum (ETH)?
Launched in 2015, Ethereum introduced smart contract functionality to blockchains. This allowed developers to build and deploy dApps, moving beyond Bitcoin's primary use case as a peer-to-peer electronic cash system.
Ethereum is an open-source, decentralised, and secure platform that transitioned from a Proof-of-Work (PoW) consensus mechanism to a more energy-efficient Proof-of-Stake (PoS) system in September 2022 with The Merge. Its native cryptocurrency, Ether (ETH), is used to pay transaction fees (gas) and secure the network through staking. Ethereum has the largest and most established ecosystem of dApps, particularly in DeFi and NFTs.
What Is Solana (SOL)?
Co-founded by Anatoly Yakovenko and Raj Gokal in 2018 and officially launched in March 2020, Solana emerged as a high-performance blockchain designed to address the scalability limitations faced by earlier networks like Ethereum.
Its unique selling proposition is its high throughput and extremely low transaction costs. These are achieved through innovative technologies like the Proof-of-History (PoH) cryptographic clock working in conjunction with the Tower BFT Proof-of-Stake (PoS) consensus algorithm.
Instead of decentralisation, Solana places the key focus on scalability and a user-friendly network, making it attractive for applications requiring fast and cheap transactions, such as high-frequency trading, Web3 gaming, DeFi, NFTs, and memecoins. Its native token, SOL, is used for transaction fees, staking, and community governance.
Differences Between Ethereum and Solana
Core Architecture
Ethereum and Solana differ fundamentally in architecture. Ethereum uses PoS, where validators stake ETH to secure the network. Its Ethereum Virtual Machine (EVM) is the standard for smart contracts, typically written in Solidity.
Solana combines PoS with Proof-of-History (PoH), a cryptographic clock mechanism for verifying time and transaction order before consensus, enabling greater speed. Solana's architecture supports parallel processing of transactions and smart contracts (written in Rust), unlike Ethereum's more sequential approach.
Speed, Scalability, and Transaction Costs
Solana places the key focus on scalability and throughput. This makes Solana's transaction costs remarkably low. As of late May 2025, a typical transaction (0.000005 SOL base fee and a 0.000115375 SOL average priority fee) costs about $0.0186 in Solana gas fees (with SOL at $154.16). In contrast, users pay $1.207 on average to transact on Ethereum (as of June 5, 2025).
In terms of speed, Solana offers a 0.4-second block time and 12-second transaction finality. Ethereum's block time is approximately 12 seconds, with finality taking around 15 minutes. Regarding scalability, Solana has a theoretical maximum of 65,000 transactions per second (TPS). On the other hand, Ethereum's mainnet can handle up to 119.1 TPS theoretically, relying on Layer-2s like Arbitrum or Optimism for higher throughput.
Ecosystem Maturity
Ethereum's first-mover advantage gives it a more mature ecosystem. It boasts approximately 2,181 full-time and 6,244 total monthly active developers, compared to Solana's 582 full-time and 3,201 total. Ethereum hosts around 5,008 dApps, while Solana has approximately 510.
In DeFi, Ethereum leads with $62.574 billion in total value locked (TVL), 54.87% market share, 1,370 protocols, 433,381 daily active addresses, and $1.997 billion in 24-hour volume. This activity generated $1.57 million in fees and $887,880 in protocol revenue. Solana, with $8.501 billion TVL, 7.64% market share, and 223 protocols, shows high engagement with 4.7 million daily active addresses, $1.848 billion 24-hour volume, $1.07 million in fees, and $134,334 in protocol revenue, likely due to its lower fees.
For NFTs, Ethereum saw $144.9 million in 30-day sales from 547,869 transactions. Solana recorded $32.265 million in sales from a higher count of 622,571 transactions.
Security and Decentralisation
Ethereum is among the most secure and decentralised blockchains out there, featuring over 11,269 nodes as of June 5, 2025. Its PoS model and large validator set enhance resilience, a core part of its value, even if it impacts mainnet speed.
Solana prioritises high throughput, operating with around 5,889 nodes. While still significantly decentralised, this is fewer than Ethereum, and higher hardware requirements for validators have raised some centralisation concerns.
Community Support and Adoption Trends
Both blockchains have active communities and distinct adoption trends. Ethereum saw its daily active addresses grow 28.47% year-to-date (YTD) to 507,630. During the same period, unique addresses in the network rose 9.25% to 321.908 million, and daily transactions surged 34.52%. Mainnet daily fees fell 77.73% and protocol revenue by 83.30% YTD. The July 2024 approval of US spot Ethereum ETFs, holding $10.45 billion AUM by June 5, 2025, signals strong institutional interest in the smart contract network.
Solana's daily active addresses grew 7.32% YTD to 4.4 million, though its daily transaction count fell 14.40%. Daily fees dropped 69.08% and protocol revenue by 91.74% YTD. US spot Solana ETF applications, first filed in June 2024, currently awaiting SEC approval, which could provide a significant boost to SOL's institutional adoption.
Use Cases
Both Ethereum and Solana are versatile blockchains, but their architectures suit different applications. We have compiled a list of their potential use cases for various sectors of the cryptocurrency market in the table below:
| Use Case | Ethereum | Solana |
|---|---|---|
| DeFi | Dominant for complex protocols, large-value transactions, and institutional DeFi due to established security, larger TVL, and extensive developer tooling. Ideal for lending, borrowing, derivatives. | Excels in high-frequency DeFi (e.g., DEXs needing fast order execution), micro-payments, and retail-focused services due to low costs and responsive user experience. |
| Web3 Gaming | Mainnet can be costly; however, its Layer-2 solutions are increasingly becoming hubs for Web3 games, leveraging Ethereum's security. | High throughput and low fees make it very attractive for on-chain gaming with many small, fast transactions (e.g., in-game asset trading, micro-transactions). |
| NFTs | Primary market for high-value NFTs and established collections, benefiting from its large user base and strong network effects. | Rapidly growing ecosystem for NFTs requiring low minting costs and fast trading; popular for newer collections and volume-focused projects. |
| Cryptocurrency Transfers & Payments | Mainnet transfers can be slower and more expensive; Layer-2s and stablecoins on Ethereum are widely used for value transfer. | Speed and extremely low fees make it highly suitable for everyday payments and fast, cheap transfers of value. |
| RWAs (Real-World Assets) | Currently leading in RWA tokenisation due to robust security, institutional trust, and established reputation. | Efficiency could make it a future contender as the RWA space matures and seeks lower operational costs for high-volume asset management. |
| Memecoins | Hosts significant memecoin activity, especially for larger, established communities, though high gas fees can be a barrier during peak hype. | A hotspot for memecoin creation and trading due to extremely low transaction fees, allowing for rapid, low-cost token launches and high trading volumes. |
| Layer-2 Chains | The primary Layer-1 for a vast ecosystem of Layer-2 scaling solutions (e.g., Arbitrum, Optimism, Polygon) designed to provide users with inexpensive transactions while tapping into Ethereum's security. | As a high-performance Layer-1, Solana focuses on optimising the base layer rather than a similar L2 structure to Ethereum. |
Buy SOL and ETH on VALR
Choosing between Solana and Ethereum depends on your specific needs - whether you prioritise Ethereum's vast, mature ecosystem and decentralisation, or Solana's raw speed and low costs. Both represent established blockchains and offer unique opportunities for users, developers, and investors. Fortunately, gaining exposure to both is super easy via VALR.
On VALR's user-friendly, secure, and regulated platform, you can buy, sell, and trade both SOL and ETH without hassle. Whether you're looking to make a quick purchase or engage in more advanced trading, VALR has you covered.
Here's how you can buy SOL and ETH on VALR:
Create a VALR Account: If you're new, register an account on VALR and pass KYC verification.
Deposit Funds: Fund your account with fiat or cryptocurrency to start trading.
Choose How You Trade Crypto on VALR:
Simple Buy/Sell: For a quick and easy purchase, use the "Simple Buy/Sell" service. Select ETH or SOL, choose the currency you want to pay with (e.g., USDC, USDT, ZAR), enter the amount, and confirm.
Pro Trading: For more advanced options, navigate to the "Pro Trading" section. Here, you can find various trading pairs like ETH/USDT, SOL/USDT, ETH/ZAR, or SOL/ZAR. You can place limit orders and market orders, and utilise VALR's charting tools and other features.
Execute Your Trade: Review your order details and confirm your transaction.
Ready to gain exposure to the leading smart contract blockchains?
Risk Disclosure
Trading or investing in crypto assets is risky and may result in the loss of capital as the value may fluctuate. VALR (Pty) Ltd is a licensed financial services provider (FSP #53308).
Disclaimer: Views expressed in this article are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.