Solana vs Ethereum: Which Smart Contracts Blockchain Should You Pick?

Solana and Ethereum are among the most important blockchain projects on the market today, and are the go-to platforms for anyone who’s looking to build or use decentralized applications. 

We’ll be comparing Solana vs. Ethereum in several categories to help you understand the most important differences between these two leading blockchains, as well as the areas where they are similar. 

Solana vs. Ethereum – Comparing the two leading smart contract platforms

Now, let’s get right into our analysis of the differences and similarities between Solana and Ethereum. We’ll be taking a quick look at the projects’ histories, approach to scalability, consensus mechanisms, smart contract capabilities, and more. 

History

Ethereum was first conceived in 2013 by Vitalik Buterin, who also authored the Ethereum whitepaper published in 2014. The project successfully raised $16 million in an ICO in August of 2014. Besides Buterin, the Ethereum project was also co-founded by Gavin Wood, Joseph Lubin, Charles Hoskinson and Anthony Di Iorio.

The initial development of Ethereum was led by a Swiss non-profit called the Ethereum Foundation, which continues to play an important role in the Ethereum ecosystem today. The Ethereum mainnet launched in July of 2015.

Solana was initially proposed in 2017, but the network itself made its debut in 2020. Solana was created by Solana Labs, an organization founded by Anatoly Yakovenko and Raj Gokal. 

Prior to the launch of the Solana blockchain, the project raised funds for development through private token sales and a public sale on the CoinList platform. In 2021, Solana Labs raised a $314 million funding round, which eclipsed all the project’s previous capital raises. This funding round included investments from leading crypto venture capital firms such as Andreessen Horowitz, Polychain Capital and Multicoin Capital. 

Smart contracts

Although Ethereum and Solana have significant differences in how they operate under the hood, they are both decentralized blockchain platforms with general-purpose smart contract capabilities. 

Therefore, they can both be leveraged for use cases such as custom tokens, NFTs, decentralized exchanges, lending protocols, prediction markets and on-chain governance systems. 

Ethereum smart contracts are written in a custom programming language called Solidity, which is influenced by popular programming languages such as C++, Python and JavaScript. Due to the popularity of Ethereum, Solidity has become a well established language for smart contract development and there is a robust ecosystem of development tools specifically designed for it.

Meanwhile, smart contracts in Solana are written in the Rust, C and C++ programming languages, which are mature programming languages that many developers are already closely familiar with.  

Consensus mechanisms

Between its launch in July of 2015 and September of 2022, Ethereum used a Proof-of-Work consensus mechanism. Ethereum mining was commonly performed with GPUs (graphics processing units), although there were also ASIC miners available for the Ethereum’s Ethash algorithm. 

In September of 2022, Ethereum successfully underwent a transition to a Proof-of-Stake consensus mechanism. This has significantly reduced the environmental impact of the Ethereum network, and has also opened the doors for certain scalability improvements, which wouldn’t have been possible under Proof-of-Work. 

Solana developers the Proof-of-History protocol to provide reliable and fast synchronization between nodes and validate transactions reliably. However, it’s important to understand that Proof of History is not a stand-alone consensus mechanism – it’s a protocol that supports Solana’s Proof-of-Stake consensus mechanism.

ETH vs SOL

The native asset of the Ethereum blockchain is called Ether, and it’s commonly referred to with the ticker ETH. All transactions on the Ethereum blockchain require a fee paid in ETH – this is required to dissuade spam transactions and provide an incentive for validators to continue securing the network. 

The supply of ETH doesn’t have an upper limit. In practice, the supply of ETH has actually been slowly decreasing since September 2022, when the Ethereum network moved over to Proof-of-Stake consensus.

This is because the number of ETH that’s being burned through the EIP-1559 mechanism is greater than the number of new ETH that’s being created to reward validators. This could change in the future – if demand for transaction on the Ethereum network drops substantially in the future, it’s possible that the Ethereum supply could begin inflating again. 

The base unit of ETH is called wei. One ETH consists of 10^18 wei (1,000,000,000,000,000,000). Since wei is such a small unit, it’s not used very commonly to refer to prices. Ethereum gas prices are typically expressed in gwei, which equals 10^9 wei (1,000,000,000). 

Solana’s native asset is SOL, and performs a similar role as ETH does on Ethereum. A fee paid in SOL is required for any transaction on the Solana blockchain, and Solana validators are rewarded with SOL for securing the network. 

There is no maximum limit to the SOL supply, and the supply of SOL is actually designed to gradually increase over time. The initial SOL inflation rate was 8% per year, although it is designed to gradually increase until it reaches the long-term target of 1.5% per year. 

The base unit of SOL is called a lamport. One SOL consists of 100 million lamports.

Scalability

Ethereum’s scalability on the base layer is quite limited, and the Ethereum ecosystem has been focusing on improving scalability through layer 2 solutions that rely on the Ethereum mainnet for security while offering cheaper and faster transactions to users. This is achieved through various means – for example, layer 2s that use “rollups” bundle multiple transactions into one transaction, which is then posted to the Ethereum mainnet.

In terms of improving layer 1 scalability, Ethereum developers are working on sharding. Through the implementation of sharding, the Ethereum mainnet will be split into smaller, interlinked networks known as “shards.” These shards will independently process transactions and execute smart contracts in parallel with one another, which is expected to provide a big boost to the amount of transactions the Ethereum network will be able to process and significantly reduce transaction fees. 

Meanwhile, the Solana ecosystem is focused on scaling directly on the base layer instead of relying on layer 2 solutions. Solana is already one of the cheapest cryptos to transfer, but could deliver even better scalability in the future. Here, we should mention Firedancer, a Solana client that’s being developed by a team from the high-frequency trading firm Jump Trading.  

Built from the ground up, Firedancer aims to optimize networking, consensus rules and runtime processing in order to overcome current software bottlenecks. 

According to revealed benchmarks, Firedancer can already handle over 1 million TPS per core in testing environments. Once validators running Firedancer come online, the Solana mainnet could see dramatic leaps in throughput and efficiency. The client diversity also improves decentralization and resilience.

Decentralization

The Ethereum network is viewed as being much more decentralized than the Solana network, although Solana has perhaps been treated a bit unfairly in regards to decentralization.

Per data from Ethernodes, there are 7,292 nodes active on the Ethereum network at the time of writing this article. These nodes are spread out across more than 50 countries, although there is a relatively concentration of nodes in Europe and North America.

When it comes to client diversity, there are 4 main Ethereum clients in use today: Geth, Nethermind, Besu and Erigon. Reth, which is an Ethereum client written in the Rust programming language, is also seeing some adoption.

According to data from Solana Compass, there are 2,919 active nodes on the Solana network at the time of writing this article. These nodes are spread out across 211 different cities in 31 countries. 

In terms of clients, Solana node operators currently have two options: a client developed by Solana Labs and a client developed by Jito Labs. Firedancer, which is being developed by Jump Crypto, will provide another alternative once it sees its mainnet launch sometime in 2024. 

Solana has seen considerable criticism due to several incidents where the network experienced downtime. The most recent Solana network outage came on February 6, 2024, when the network was down for roughly 4 and a half hours. Other major Solana outages happened in October 2022 and February 2023. You can view a comprehensive history of Solana’s uptime and outages on the Solana status page.

Validators

Both Ethereum and Solana are permissionless networks, which means that there is no whitelisting requirement for anyone to join the network as a validator. However, operating a validator is not particularly accessible in practice when it comes to both Ethereum and Solana.

If you want to operate your own validator on the Ethereum network, a stake of 32 ETH is required. Based on the ETH price at the time of writing this article, this translates to just over $118,000, which is an amount of capital that most ETH holders simply don’t have or can’t afford to invest into a volatile cryptocurrency.

ETH holders who don’t have 32 ETH but still want to participate in staking can do so through cryptocurrency exchanges or liquid staking protocols. You can learn more about this in our article exploring Ethereum staking. 

When it comes to Solana, the main bottleneck for participating in the network as a validator is not the required amount of SOL, but rather the hardware requirements for running a Solana validator successfully. 

Per the hardware recommendations provided by Solana Labs, you’ll need a CPU with a base clock speed of 2.8GHz or higher with at least 12 cores / 24 threads, 256GB of RAM, and ample storage to run a Solana validator. On top of that, you’ll need a fast internet connection. The cost of putting together such a setup is substantial, but is actually more accessible than obtaining 32 ETH to run an Ethereum validator. 

SOL holders who don’t want to run their own validator can delegate their tokens to an existing validator, and receive a portion of the earned staking rewards. This can be done easily with any Solana wallet that supports staking – the Phantom and Solflare wallets are great examples. 

Adoption and ecosystem

Currently, Ethereum has a stronger ecosystem than Solana overall. Ethereum has a more active development community, larger DeFi protocols, tokens with larger market capitalizations and more valuable NFT collections.

According to data from DeFi Llama, the decentralized finance ecosystem on Ethereum has a total value locked of $51.89 billion, which is over 5x larger than the second-placed Tron. Solana is currently in fourth place, with a TVL of roughly $4.32 billion. 

The top 10 blockchains by TVL (total value locked) in decentralized finance apps. Image source: DeFi Llama. 

While Ethereum remains dominant in the smart contract platform sector, Solana has been making large strides in terms of adoption since late 2023. After seeing a precipitous drop in 2022 and stagnating for the majority of 2023, Solana’s DeFi ecosystem has started seeing impressive growth once again. 

The TVL (total value locked) on Solana-based decentralized finance apps since March 2021. Image source: DeFi Llama.

We should also mention that Solana is currently a hotspot for meme tokens, with Solana-based meme projects like Dogwifhat and Bonk displaying large gains and igniting a speculative mania for meme tokens. 

Solana vs. Ethereum – The bottom line

Ethereum and Solana are both top-tier blockchain platforms with support for smart contract. They can both be used to build an almost infinite variety of decentralized applications, and both projects will likely stay relevant over the long term.

One of the biggest differences between Solana and Ethereum is that the Solana ecosystem is looking to scale the platform further through improvements on layer 1, while the Ethereum ecosystem is mostly focused on scaling through layer 2 solutions that rely on the Ethereum layer 1 for security. 

Ethereum currently has a more robust ecosystem and a larger number of developers, although Solana has certainly been making strong progress in the last year to become a truly worthwhile competitor to Ethereum. 

If you’re interesting in more comparisons between top blockchain platforms, make sure to check out our article tackling the topic of Cardano vs. Solana.