Solana vs Ethereum: Is It a Winner-Takes-All L1 Battle?

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Solana has outperformed L1 rivals in 2023. SOL token price has surged over 600% YTD. Moreover, Solana has recently pipped Ethereum in terms of active addresses, daily transactions and trading volumes in 2023. Is Solana better than Ethereum and can Solana and Ethereum coexist?

Solana‘s (SOL) incredible 600% gain in 2023 has revived an old debate about Ethereum (ETH) killers. It feels like 2021’s crypto bull market again.

The mood on Crypto Twitter is buoyant, with Solana supporters boastfully tweeting how their chain has pipped Ethereum in terms of active addresses, daily transactions, and trading volumes in 2023.

But does the Ethereum vs Solana debate have substance? Is Solana better than Ethereum? In this article, we talk about SOL’s 2023 comeback, why decentralized finance (DeFi) users are moving from Ethereum to Solana, and whether Solana and Ethereum can coexist.

SOL’s Breakout Performance in 2023

Solana has outperformed its Layer One (L1) rivals in the crypto market by a long mile in 2023. SOL’s year-to-date (YTD) gain of over 650%, as of 20 December 2023, has people talking about Solana “flipping” Ethereum to become the top L1 blockchain in the world.

The change in SOL market sentiment is drastic. Just over a year ago, SOL prices crashed over 50% following the bankruptcy of Sam Bankman-Fried’s FTX crypto exchange in November 2022.

Bankman-Fried and FTX were one of Solana’s biggest investors, holding 55.75 million SOL tokens (about 13% of SOL’s circulating supply) and several other Solana-based tokens at the time of its bankruptcy. By December 2022, SOL prices fell to a low of $8.


Renewed optimism about the Solana ecosystem has powered SOL prices to a 19-month high of nearly $80 in December 2023. Blockchain analysts have also pointed to positive on-chain data showing Solana surpassing its L1 rivals in several metrics, including active addresses and transaction count, as catalysts for SOL’s outperformance.

Asset Price Market Capitalization Year-to-date gain
Ether (ETH) $2,200 $265 billion 84%
BNB Chain (BNB) $254 $38.5 billion 3%
Solana (SOL) $75 $32.5 billion 661%
Cardano (ADA) $0.58 $20.7 billion 138%
Avalanche (AVAX) $41 $15.2 billion 282%
Polkadot (DOT) $6.8 $8.6 billion 58%

(Data sourced from CoinMarketCap, as of 20 December 2023.)

Why is Solana Outperforming Ethereum?

Solana’s rise in popularity in 2023 can be attributed to its offering of low gas fees and fast transactions. Out of all the L1s out there, Solana has come closest to challenging Ethereum and attracting users and developers to its ecosystem by offering an alternative to Ethereum’s notoriously expensive gas fee market.

At the time of writing, the average gas fees on Ethereum stood at $4.37, Etherscan data showed. There have been instances when Ethereum gas fees have spiked above the $50 mark. In comparison, Solana’s average gas fee at the time of writing stood at around 0.000005 SOL ($0.0000013), according to on-chain data compiled by Solscan.

The low gas fees on Solana are an attractive proposition to decentralized finance (DeFi) users. Many Ethereum DeFi users are exploring the Solana ecosystem for the first time in search of profits from meme coin trading, airdrops, and staking.

Take Solana-based memecoin called BONK, for example. BONK has surged nearly 9,000% YTD in 2023 to become the third-largest memecoin by market capitalization, behind Dogecoin (DOGE) and Shiba Inu (SHIB). For most of 2023, the only place where you could buy BONK was on a Solana-based decentralized exchange. In order to get your hands on BONK, you first needed to have SOL tokens in your wallet to pay for gas fees.

Aside from degen trading, airdrops were the Solana ecosystem’s key attraction in 2023. The eligibility criteria for most Solana ecosystem airdrops required users to stake SOL or interact with specific DeFi apps on Solana. The Solana airdrops were extremely lucrative for some users. As news spread on Twitter, more crypto degens rushed to Solana.

Encouraging Stats of Solana vs Ethereum

  • Solana’s 24-hour decentralized exchange (DEX) trade volume stood at $1.262 billion, above Ethereum’s $1.167 billion, as of 20 December 2023, DefiLlama data showed.
  • 7-day NFT sales volume on Solana ($99.3 million) surpassed that of Ethereum’s ($82.4 million) as of 20 December, 2023, CryptoSLAM data showed.
  • Daily active addresses on Solana addresses (723K) surpassed that of Ethereum (374K) as of 19 December 2023, data from Artemis.
  • Daily transactions on Solana stood at 25.9 million compared to 1.15 million transactions on Ethereum as of 19 December 2023, according to data from Artemis.

Note that only L1 data accounted for Ethereum’s data. Data from Ethereum layer twos (L2) were not taken into account.

Can Solana Flip Ethereum?

Tribalism is a distinct crypto investor trait. The Bitcoin maximalists believe that Bitcoin is the only cryptocurrency that will be needed in the future.

Ethereum maximalists continue to point out rival blockchain’s decentralization and security compromises made in favor of speed and scale. Similarly, factions within each crypto tribe occasionally spark conversation on Twitter about how their crypto is better than the others.

Today, Solana’s over 600% gain in 2023 has revived an online debate about “Ethereum killers” and L1 dominance. But does it have to be a winner-takes-all battle for the L1 blockchain space?

Some crypto intellects do not think so.

In conversation with Blockworks, Brandon Potts of crypto venture capital firm Framework Ventures explained the difference between the growth paths of Ethereum and Solana:

“Ethereum is going for this bulletproof security model. They are going for more of a settlement layer, more of the high value transactions, if you will.


But with Solana, they are going with high speed, low latency, performance, low cost. So I don’t mean to pit those two against one another, but they are starting on opposite ends of the spectrum.”

Potts added that Ethereum’s security will attract on-chain treasuries, bonds, and other high-value real-world assets (RWA), while Solana’s low cost and fast transactions will make it the go-to blockchain for payments.

On a similar note, Jacob Franek of AllianceDAO tweeted about the culture shift within the major blockchain networks. Franek noted that Solana is embracing crypto degens and has become the “new casino” for DeFi users, while Ethereum has matured to attract traditional finance players and RWA.

The Bottom Line

Whichever crypto project you support, it is important that you keep an open mind and explore as many blockchain networks and DeFi experiences as you can. The crypto industry is evolving incredibly fast, and there is no guarantee that blockchain technology will still be relevant five to ten years from now.


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Mensholong Lepcha
Crypto & Blockchain Writer
Mensholong Lepcha
Crypto & Blockchain Writer

Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to, StockTwits, XBO, and other publications. He started his writing career at Reuters in 2017, covering global equity markets. In his free time, Mensholong loves watching football, finding new music, and buying BTC and ETH for his crypto portfolio.