Solana is a leading blockchain project that aims to be a dominant force in the industry. Launched in 2019, it has raised more than $335 million from venture capital firms. Its native token, SOL, has grown into one of the largest cryptocurrencies by market capitalization, exceeding $33 billion. Below are the top five factors to consider when thinking about buying Solana.
Solana positions itself as an Ethereum challenger
Ethereum is a prominent blockchain platform widely used by developers to build decentralized applications. Many well-known projects—such as Decentraland, Aave, Axie Infinity and Uniswap—were built on Ethereum.
However, Ethereum has long been criticized for inefficiency. As a second-generation platform, applications on Ethereum often face slow speeds and high fees. For example, the average Ethereum transaction cost has often been over $20, which is prohibitively expensive for many users. Historically, Ethereum’s proof-of-work model also consumed significant energy and required high mining costs.
Solana seeks to provide a faster, lower-cost and more energy-efficient alternative. While Ethereum traditionally handled fewer than 20 transactions per second, Solana claims throughput of more than 2,000 transactions per second.
Solana’s energy footprint is smaller because it uses a proof-of-stake consensus mechanism that relies on validators rather than mining. Transaction fees on Solana are also extremely low—around $0.00025 per transaction—making it attractive to developers and users. As a result, many projects have adopted Solana over recent months.
The Solana ecosystem is expanding
Another important point is that Solana’s ecosystem is growing as developers look for alternatives to Ethereum. In recent years, the number of applications deploying on Solana has increased steadily.
Several well-known apps now run on Solana. For example, the Brave browser leverages Solana to support Basic Attention Token (BAT); Brave is used by millions of people worldwide and rewards users for viewing ads while browsing.
Audius is another example: a music streaming platform positioning itself as an alternative to services like Spotify, Apple Music and Amazon Music. Audius allows independent artists to earn whenever listeners stream their music.
Solana has also been used to build StepN, an app disrupting the fitness space where users buy NFTs and earn rewards in the GMT token. StepN’s market activity has shown strong growth in recent months.
Overall, developers are building a wide variety of applications on Solana. According to DeFi Llama, the network has accumulated billions in total value locked (TVL), placing it among the larger platforms in the industry behind Ethereum, Terra, BNB Chain and Avalanche.
Solana faces intense competition
If you plan to buy Solana, be aware that the network faces fierce competition as many projects aim to challenge Ethereum. The most significant rival is still Ethereum itself.
Ethereum’s development team is actively working on Ethereum 2.0, which transitions the network from proof-of-work to proof-of-stake. This change reduces energy consumption and replaces mining with validators. Ethereum is also implementing sharding to improve transaction throughput, which could help it retain or regain users and developers.
Beyond Ethereum, Solana competes with platforms such as Terra, Avalanche, Polygon, Cronos, Fantom and Tron. Some of these networks offer very high throughput—Avalanche, for instance, claims support for thousands of transactions per second.
Other projects, like Kadena, report extremely high theoretical throughput as well. Given the increasing number of capable platforms, Solana may face challenges maintaining its market position as the space becomes more crowded.
Solana’s TVL and reliability have been under pressure
Although Solana is a decentralized platform, it relies on some centralized infrastructure providers, such as cloud services, to operate. When those providers experience outages or issues, Solana and its hosted applications can be impacted.
Over the past year, the network experienced several outages—more than many other blockchains—resulting in downtime for days at a time in some cases. These incidents prompted some developers to explore alternative chains.
Consequently, the amount staked and the total value locked on Solana have fallen from all-time highs. TVL declined from a peak near $14.9 billion to roughly $6 billion, reflecting a pullback in activity and capital across several protocols.
Notable applications that saw steep declines in TVL include Saber, Serum and Almond. Other projects such as Marinade Finance, Raydium and Solend also reported meaningful reductions in locked value.
Solana’s future is uncertain but promising
Solana has established itself as a resilient blockchain in recent years and is now one of the most actively traded coins worldwide. A substantial amount of SOL—valued in the tens of billions—remains staked by validators and delegators, demonstrating strong holder commitment.
Nevertheless, Solana’s long-term outlook is mixed. Growing competition, periodic outages and a declining TVL create uncertainty about its future trajectory. Much will depend on how quickly the Solana development community can address reliability, scalability and ecosystem growth.
Investors considering Solana should weigh its high throughput and low fees against the operational challenges and competitive pressures the network faces. Careful research and risk management remain essential when evaluating any blockchain investment.