Solana vs. Ethereum: Can SOL Flip ETH?

Solana‘s (SOL) outperformance of Ethereum (ETH) in 2024 has revived an old debate about “Ethereum killers.”

Back in the crypto bull run of 2021, Cardano (ADA) and Avalanche (AVAX) were among the potential candidates to dethrone Ethereum. But in 2024, only Solana can be considered a serious contender.

Throughout 2024, crypto Twitter was buoyant, with Solana supporters boastfully tweeting how SOL has pipped ETH in terms of active addresses, daily transactions, and trading volumes.

But does the Ethereum vs. Solana debate have substance? Is Solana better than Ethereum?

Table of Contents Table of Contents

1. Key Takeaways
2. SOL Climbs to All-Time High, While ETH Falters
3. SOL vs. ETH: Why Is Solana Outperforming Ethereum?
4. Solana vs. Ethereum Comparison: Key Stats
5. Will Solana Overtake Ethereum?
6. The Bottom Line
7. FAQs
8. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. SOL Climbs to All-Time High, While ETH Falters
3. SOL vs. ETH: Why Is Solana Outperforming Ethereum?
Show Full Guide
4. Solana vs. Ethereum Comparison: Key Stats
5. Will Solana Overtake Ethereum?
6. The Bottom Line
7. FAQs
8. References

SOL Climbs to All-Time High, While ETH Falters

Solana has outperformed its layer one (L1) rivals in the crypto market by a long mile in 2024.

SOL’s climb to a new all-time high (ATH) price of $263 in November 2024 has people talking about Solana “flipping” Ethereum to become the top smart contract blockchain in the world.

ETH, on the other hand, has come nowhere close to its record-high price despite receiving approval for the coveted spot ETF wrapper from the US Securities and Exchange Commission (SEC) in 2024.

For many crypto investors, Ethereum has become old and boring. Newer, performance-focused chains like Solana are driving the market narrative.

SOL vs. ETH: Why Is Solana Outperforming Ethereum?

So, what are the key differences between Solana and Ethereum, and factors affecting their performance lately?

Solana’s Performance-Focused Blockchain

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 high and volatile gas fee market.

Solana’s biggest advantage over Ethereum is its ability to process transactions in parallel.

Thousands of non-overlapping transactions can be executed simultaneously on Solana via “parallel processing,” resulting in high network throughput and low gas fees.

Meanwhile, Ethereum’s prioritization of decentralization and security has forced the blockchain to postpone L1 scalability upgrades.

Instead, Ethereum is currently focused on scaling with the help of layer two (L2) rollups.

Uncertainties Related to Ethereum’s Rollup-Centric Scaling Roadmap

Ethereum’s plan to scale via L2 rollups has been a mixed bag.

While L2s like Arbitrum (ARB) and Base successfully provided faster and cheaper transactions to Ethereum users, their growing popularity is cannibalizing Ethereum by taking crypto capital and users away from the L1.

We also have to discuss a detrimental side effect of Ethereum’s rollup-centric scaling plan – liquidity fragmentation.

As of December 2024, more than $50 billion in total value locked was scattered across 50 Ethereum rollups, data on L2Beat showed.

The distribution of crypto capital across L2 chains that are not seamlessly interconnected has resulted in poor user experience and capital inefficiencies.

Meanwhile, Solana does not expect to use L2s as its primary scaling solution. The varying scaling roadmaps are a key difference between Solana and Ethereum.

Solana vs. Ethereum Comparison: Key Stats

Note that only L1 data accounted for Ethereum’s data. Data from Ethereum L2s were not taken into account.

Will Solana Overtake Ethereum?

Solana versus Ethereum analysis shows that despite the encouraging signs, Solana has a long way to go before overtaking Ethereum as the premier smart contract blockchain.

Price performance certainly favors Solana, but investors are forward-looking, which can cloud their judgment. You need look no further than on-chain statistics to learn that talks of Ethereum’s demise are overexaggerated.

As of December 13, 2024, Ethereum accounted for more than half of the TVL locked-in decentralized finance (DeFi) smart contracts across all blockchain networks.

Onchain data compiled by DeFiLlama showed Ethereum’s TVL at $77.6 billion versus Solana’s $9.2 billion at the time of writing.

Furthermore, Ethereum’s high degree of decentralization and security has made it the top choice among traditional finance institutions looking to tokenize real-world assets (RWA) like US treasuries and corporate bonds.

In March 2024, BlackRock (BLK), the world’s largest asset manager, chose Ethereum to tokenize a yield-bearing fund called BUIDL that invests in cash, US Treasury bills, and repurchase agreements.

Meanwhile, about 99% of assets under management (AUM) of Hashnote’s short-duration yield fund USYC—the second largest RWA token after BUIDL—was tokenized on Ethereum, at the time of writing.

Data compiled by rwa.xyz showed Ethereum had a market share of 76.3% in the RWA token market.

More than $3.1 billion RWA (excluding stablecoins) were tokenized on Ethereum as of December 13, 2024. Solana’s figure stood at $134 million.

The Bottom Line

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.

Whether you support Solana or Ethereum, it is important that you keep an open mind and explore as many blockchain networks and DeFi experiences as you can.

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