Key takeaways
- Ethereum dominates in DApps and NFTs, while Solana is known for its fast transactions and low fees.
- Ethereum uses PoS, while Solana combines PoH and PoS for faster transaction processing, making it attractive for high-frequency and speculative trading.
- Solana’s speed comes with occasional outages, while Ethereum, though slower, has a more stable network.
- Ethereum is more decentralized, whereas Solana focuses on performance but faces centralization challenges.
Solana and Ethereum are widely used blockchain platforms today, but they serve slightly different purposes.
Ethereum was launched in 2015 by Vitalik Buterin and a team of developers who wanted to create a decentralized platform for building applications beyond Bitcoin’s limitations. It introduced smart contracts, which allowed developers to create decentralized apps (DApps) that automatically execute when conditions are met. Ethereum has become the go-to platform for smart contracts, NFTs, DeFi and token creation.
Solana came onto the scene in 2020, founded by Anatoly Yakovenko. The goal was to build a blockchain that could process transactions at high speed while keeping costs low. Its ecosystem is smaller than Ethereum but growing rapidly, especially in areas like NFTs and gaming.
Projects like Magic Eden (an NFT marketplace) and Serum (a decentralized exchange)have contributed to the growth of Solana’s ecosystem, while its low fees and fast processing times make it attractive to developers and users.
Both platforms play key roles in the current blockchain space, each with unique strengths. Still, there are critical differences between them, ranging from consensus mechanisms and transaction speeds to how each appeals to developers and enthusiasts.
Consensus mechanism comparison
Ethereum (post-Merge): proof-of-stake (PoS)
Ethereum originally used PoW), but with the Merge in 2022, it switched to PoS to improve scalability and reduce its environmental impact.
In proof-of-work (PoW), miners compete to find a nonce (a random number) that, when combined with the block’s data, produces a hash that meets a certain difficulty target. This process requires a lot of computational power, as miners must try many different nonce values until they find one that results in a hash below the target.
In proof-of-stake (PoS), there’s no need for this hashing competition. Instead, validators are selected in an orderly fashion based on the amount of Ether (ETH) they’ve staked (locked up as collateral). This process significantly reduces the network’s energy consumption by over 99%.
Under this system, validators propose new blocks and verify transactions, earning rewards for doing so correctly and facing penalties (slashing) for dishonest behavior. Ethereum’s PoS also introduces a larger validator pool, which enhances security and decentralization since more participants can secure the network without expensive mining equipment.
While PoS has helped Ethereum become more eco-friendly and scalable, the network is still addressing issues like high gas fees and congestion, so layer-2 solutions are being developed to improve performance.
Additionally, Buterin emphasized the importance of decentralization within these L2 projects. Starting in 2025, Buterin plans to publicly endorse only those L2s that reach “stage 1” on his decentralization scale, which includes active fraud-proof or validity-proof mechanisms and decentralized governance through multi-signature models.
Solana: proof-of-history (PoH) + proof-of-stake (PoS)
Solana uses a unique approach with a mix of proof-of-history (PoH) and PoS. PoH works by generating a cryptographic timestamp for every transaction or event.
This timestamp proves that the event happened at a specific moment in time, which validators can then use to order transactions. Because this is all done automatically by the system, it drastically speeds up the process and allows Solana to handle thousands of transactions per second.
On top of that, PoS ensures network security, with validators staking SOL (Solana’s native token) to validate transactions and secure the network.
The combination of these two mechanisms makes Solana one of the fastest blockchains in history, far outpacing Ethereum. However, this speed has occasionally led to network outages and questions about the level of decentralization due to the limited number of validators. Solana only has around 2,000 validators compared to Ethereum’s 800,000.
Did you know? On February 6, 2024, the Solana network was down for nearly five hours. This disruption was caused by a bug in Solana's Just-in-Time (JIT) compilation cache, which led to an infinite loop during the recompilation of certain older programs.
Transaction speed and throughput
Solana’s transaction speed (TPS) vs. Ethereum’s current capacity
When it comes to raw transaction speed, Solana is one of the fastest blockchains, boasting a theoretical capacity of up to 65,000 transactions per second (TPS). This is largely thanks to its unique consensus mechanism, which combines PoH with PoS to streamline how transactions are ordered and validated. In practice, Solana processes around 3,000 to 4,000 TPS on a regular basis, making it far superior to most blockchains in terms of throughput.
Ethereum, in contrast, currently handles around 15 to 30 TPS on its base layer. While Ethereum’s transition to PoS through the Merge was a major improvement in energy efficiency, it didn’t directly enhance its transaction speed.
Still, Ethereum has taken steps to address its scalability issues by relying on layer-2 scaling solutions like Arbitrum and Optimism, which move transactions offchain and then bundle them back to the main chain. These layer-2 solutions can boost Ethereum's effective TPS into the thousands, but they require more adoption and refinement.
Scaling challenges
Solana's high TPS is impressive, but it hasn’t been without its own growing pains. The network has experienced outages and performance bottlenecks during periods of extreme demand, raising concerns about how well it can handle further scaling as its ecosystem grows.
Ethereum, meanwhile, is addressing its scalability challenges in a different way. With upgrades like sharding, Ethereum aims to break up the network into smaller “shards,” each capable of processing its own set of transactions. This could significantly increase Ethereum’s capacity without overburdening the base chain. Until sharding is fully realized, Ethereum will rely heavily on layer-2 solutions to offload the transaction load.
Network fees: a cost comparison
Solana’s low transaction costs
One of Solana’s key features is its extremely low transaction fees, typically costing just a fraction of a cent (around $0.00025 per transaction). This affordability is a key selling point for Solana, making it particularly attractive for use cases such as NFTs, DeFi and gaming, where high transaction volumes are common. Solana’s high throughput allows it to keep fees low, even during periods of heavy network usage, which is a major advantage over many other blockchains.
Ethereum’s gas fees and layer-2 solutions
In contrast, Ethereum has historically struggled with high gas fees. Gas fees are the payments users must make to complete transactions on the Ethereum network, and they fluctuate based on network demand. During periods of congestion, such as when popular NFT drops or DeFi activities spike, gas fees can soar to hundreds of dollars per transaction, pricing out smaller users.
As mentioned, to combat this, Ethereum has been turning to layer-2 solutions like Arbitrum, Optimism and zk-Rollups, which reduce the load on the main chain by processing transactions offchain. These solutions significantly lower gas fees by bundling multiple transactions together and only sending summary data to Ethereum’s main chain. L2 adoption is growing, but for now, high gas fees during peak periods remain a pain point for Ethereum users.
Did you know? One notable instance of extremely high gas fees occurred during the Stoner Cats NFT launch on July 27, 2021. Due to massive demand, gas prices surged, leading to failed transactions that cost users a combined total of over 334 ETH (about $800,000 at the time).
Decentralization vs. centralization
Decentralization is a key principle of blockchain technology, but Solana and Ethereum approach it differently. Ethereum is widely considered more decentralized, with over 800,000 active validators as of 2024.
Anyone who holds the required amount of ETH (32 ETH) can participate in securing the network by becoming a validator. This broad distribution of validators helps Ethereum maintain a high level of security and resilience, as no single entity can easily gain control of the network.
Solana, while still decentralized, operates with a smaller number of validators – about 2,000 active validators.
The network’s high hardware requirements to run a validator node mean that it’s more expensive to participate, which can concentrate power in the hands of those with the resources to afford the necessary infrastructure. This has led to some criticism that Solana is more centralized compared to Ethereum, though the network has been actively working to expand its validator pool.
Did you know? Decentralization is vital to the blockchain community because it removes single points of control, making networks more secure and resistant to censorship. For example, during the 2022 Canadian trucker protests, centralized crowdfunding platforms froze donations. In response, protesters turned to Bitcoin, where its decentralized nature allowed funds to be raised and distributed without interference from any governing authority.
NFTs and memecoins: Solana vs. Ethereum
Ethereum has long been the dominant force in the NFT space, hosting platforms like OpenSea and collections such as Bored Ape Yacht Club and CryptoPunks. Its early entry into the market gave it a lead in credibility and adoption. However, high gas fees can be prohibitive, especially for smaller transactions.
Solana has rapidly gained popularity, with platforms like Magic Eden attracting users priced out of Ethereum. Its lower fees and faster transaction times make it ideal for creators and collectors looking for affordability. Solana has become a hub for smaller NFT collections, especially in gaming and PFP (profile picture) NFTs, where transaction speed and volume are crucial.
The same holds for memecoins. While Ethereum is home to well-known tokens like Shiba Inu and PepeCoin, high gas fees present barriers for smaller traders. These fees often outweigh the value of the transaction, especially for high-volume, low-value memecoin trades. Solana’s low fees make it more inviting for speculative trading of memecoins, allowing users to engage without the heavy impact of costs that can erode profits.
This affordability encourages broader participation in both NFT and token ecosystems.
Did you know? The most expensive NFT ever sold on Ethereum is CryptoPunk #5822, which was purchased for 8,000 ETH (approximately $23.7 million at the time) in February 2022. CryptoPunks are among the earliest and most iconic NFT collections on Ethereum.
Ecosystem and developer activity
Size and activity of DApp ecosystems
Ethereum leads the blockchain space with the largest DApp ecosystem. As of 2024, Ethereum has nearly 9,000 monthly active developers contributing to its open-source ecosystem, with an additional 20,000 to 30,000 working on closed-source applications.
This massive developer base fuels a wide range of DeFi, NFT and gaming DApps, making Ethereum a robust hub for innovation. Platforms like Uniswap, Aave and Compound are prime examples of successful projects built on Ethereum. Its longevity and extensive documentation make it easier for developers to access tools and resources, including events like ETHDenver, which drive community engagement and innovation.
Solana, although newer, has quickly established itself as a strong contender. With over 350 DApps and 1.28 million unique active wallets (UAWs), Solana is particularly popular in areas that benefit from its high throughput and low transaction costs.
DeFi projects such as Jupiter, Raydium, and Orca have leveraged Solana’s fast transaction speeds to provide users with a smoother experience. The network’s expanding ecosystem also includes notable partnerships, such as its collaboration with Helium to enhance decentralized wireless infrastructure, which showcases its capacity for mainstream integrations. Additionally, Solana’s Metaplex and Magic Eden play an important role in the NFT space, offering creators a cost-effective alternative to Ethereum’s higher fees.
Developer support, funding, and innovation
Ethereum’s long-standing presence has fostered a rich developer support system with grants, hackathons and educational resources. Its wide-reaching community ensures a continuous flow of innovation. Ethereum’s developer tooling and large-scale events such as ETHGlobal consistently attract talent and drive the development of new applications.
Meanwhile, Solana has also ramped up its support for developers through initiatives led by the Solana Foundation, including hackathons and educational programs like mtnDAO. These programs aim to attract and retain developers by offering a platform for high-speed, scalable DApp development.
Solana has focused on creating a seamless experience for developers, especially those looking to build applications that demand high performance, such as gaming or DeFi platforms. Solana’s use of Rust and TypeScript, alongside robust software development kits (SDKs), provides developers with accessible tools to build quickly without needing deep expertise in low-level programming.
So, while Ethereum boasts a larger, more mature developer ecosystem with greater security, Solana is rapidly closing the gap by offering superior speed and lower costs.
Interoperability and cross-chain solutions
Interoperability is becoming a cornerstone of blockchain development as users and developers increasingly require seamless movement of assets across platforms.
Ethereum, being one of the earliest blockchains, has pioneered cross-chain integrations through a variety of bridging solutions and layer-2 networks. Solutions like Polygon offload transactions from the Ethereum mainnet, reducing congestion while maintaining a connection to Ethereum’s security and liquidity.
Additionally, bridges such as Avalanche, BNB Smart Chain and Fantom further enable cross-chain compatibility by allowing users to transfer tokens and assets from one network to another, making Ethereum a key hub for multi-chain activities.
Solana, while newer, has made substantial progress in interoperability. The network’s primary interoperability tool is the Wormhole Bridge, which enables the transfer of tokens and NFTs between Solana and other major blockchains like Ethereum, Sui, BNB Smart Chain, Terra 2.0, Aptos and more. In short, Wormhole locks assets on one chain and mints corresponding tokens on the other, facilitating smooth cross-chain asset transfers.
Solana has also integrated Cross-Chain Messaging Protocol (CCMP), further enhancing its ability to communicate with different blockchains.
However, there are trials and tribulations associated with cross-chain bridges, and their existence doesn’t guarantee their security. The Wormhole Bridge, in particular, has faced its fair share of troubles.
Roadmaps and future outlook
Solana’s development plans and scalability solutions
Solana has set ambitious goals for 2024 and beyond, focusing on improving network stability, scalability, and expanding its ecosystem.
The Solana Foundation is pushing forward with upgrades like token extensions, allowing for more programmable and customizable tokens, which is particularly beneficial for enterprises and developers interested in real-world assets like stablecoins.
Solana’s PoH combined with PoS will continue to be integral to its scalability. The network can already handle thousands of TPS, but ongoing updates aim to increase this. Solana’s development will also see enhanced partnerships with projects in the DeFi, gaming and NFT sectors, continuing to capitalize on its high throughput and low transaction fees.
Solana is also exploring mainstream integrations, such as the Solana Saga smartphone, which bridges mobile technology with blockchain use cases. These developments aim to attract more users and developers while improving the overall user experience.
Ethereum’s upcoming improvements and long-term vision
Ethereum’s roadmap for 2024 and beyond is heavily focused on solving the blockchain trilemma: balancing decentralization, scalability and security. While Ethereum has made significant strides with the Merge and Shanghai upgrades, shifting to PoS has not fully addressed its scalability challenges. Upgrades like Pectra, which merges two planned updates (Prague for the execution layer and Electra for the consensus layer) into a comprehensive package, aim to offer solutions.
Further upgrades, such as Single-Slot Finality, will decrease the time it takes for blocks to finalize, significantly improving the user experience and efficiency of the network.
Ethereum also plans to implement Verkle Trees, which will enable stateless clients and further enhance scalability by reducing the storage burden on nodes. Ethereum’s focus on account abstraction will streamline interactions with smart contracts, making it easier for users to engage with DApps, even if they’re not technically inclined.
Finally, remember that both networks play a significant role in different areas, and the “better” network depends on your specific use case.
Let’s suppose that you’re a developer looking to build a DApp. If you prioritize a mature ecosystem, security, and decentralization, Ethereum might be the better choice due to its long-standing reputation and robust developer community.
However, if your focus is on speed and low transaction costs, particularly for high-volume applications like NFTs and memecoins, Solana may be more suitable, thanks to its high throughput and affordable fees.
Written by Bradley Peak