Long term holders of the Solana SOL/USD cryptocurrency have had a great five years, up over 5,000% to Ethereum’s ETH/USD 1,000% gain. This year has been more lackluster for SOL. But its underperformance should entice investors looking to diversify their blockchain holdings away from an overweight in ETH. Solana has legs. Industry players all seem to like it.
“Solana has capitalized on something we at Dash recognized back in 2015: users demand a ‘just works’ experience,” said Joel Valenzuela, a core member of Dash DAO based in New Hampshire. By ‘just works’ Valenzuela means developers are looking for an easy to use blockchain that does what it was built to do. In other words, it is user friendly.
Solana’s native coin has trailed Ethereum this year, the godfather of all blockchains. Ethereum approached its 2021 high of $4,422 last week. It’s trading at around $4,200 currently.
Ethereum has gotten too comfortable with its market lead in the blockchain space, some critics charge. This, of course, paved the way for the big alternative layer one blockchains like Solana, Cardano, and others. “They’ve made excuses for why they can’t offer the same fast, low-cost, permissionless experience to all of their users,” said Valenzuela.
“Solana has been more than happy to step in and do their job for them. Let this be a lesson to the rest of the space: you adapt or you will die.” — Joel Valenzuela, Dash DAO.
Ethereum Does Not Offer This
Solana is a high-performance, public blockchain that was launched in March 2020 by Solana Labs, co‑founded by Ukrainian-born Anatoly Yakovenko and Raj Gokal. Gokal became famous in May when cyber thieves tried extorting him for 40 BTC, a fortune in dollar terms.
The Solana blockchain can handle around 2,600 transactions per second, compared to Ethereum’s approximate 15. Solana also has lower fees. For long term investors, Solana typically offers higher staking yields of 6.8% per year, according to Staking Rewards – versus Ethereum’s current yield of 3%
Some traditional Institutions are using Solana tech for tokenization of assets like stocks and bonds.
A landmark deal with fintech firm R3 in May means traditional financial giants—HSBC, Bank of America, Euroclear, and the Monetary Authority of Singapore—can integrate Solana’s blockchain into their operations for tokenization of traditional securities or faster transaction settlements.
PayPal PYPL chose Solana for its stable coin in 2024.
“Solana’s push into consumer apps aims towards a structural shift. As the chain builds out vertically integrated user experiences, from Blinks to mobile, we’re seeing real utility drive organic on-chain activity,” said Martins Benkitis, CEO and Co-Founder of Gravity Team, a market maker and liquidity provider for digital asset traders based in Latvia.
“Blinks” are blockchain links that let people embed Solana transactions directly into any web link, such as a link to X, Discord, or an email. Solana launched the Saga in 2023, an Android smartphone built by Solana Mobile, a subsidiary of Solana Labs, in partnership with the now defunct Cupertino start-up OSOM. The phone is explicitly designed for Web3.
“For market makers like us, it signals a future where liquidity needs to be as dynamic and accessible as the apps themselves,” Benkitis said. We’re leaning into Solana because we see that when infrastructure meets adoption, that’s where sustainable markets are built.”
Solana is “becoming the iOS of crypto,” said Pete Carroll, co-founder chief operating officer for the Coral Protocol in the U.K. “They have this vertically integrated stack built for user-first experiences. Their support for consumer applications like phones and retail, cryptocurrency wallets, reflects a seamless blend of hardware and software. Solana isn’t just scalable, it’s usable.”
The Coral Protocol is built on Solana. Coral wants to position itself as a solution that is foundational to the emerging “Internet of Agents”—an interconnected, autonomous AI system.
SOL For Retailers. Even Trump Is In On It.
Retail investors do not need to open a cryptocurrency account on-chain (think Coinbase, for example) to invest in Solana’s future.
The ProShares Ultra Solana ETF SLON is a risky, double leveraged fund that invests in Solana futures contracts. It launched this year.
For the more risk averse, the REX Osprey Solana + Staking ETF SSK is a spot Solana investment with “dividend” interest, or staking as it is known in the crypto universe. Staking requires investors to lock in their positions and not sell. Like most funds, this one will charge a fee to investors.
Meanwhile, the Securities and Exchange Commission is reviewing more spot-SOL ETF approvals from Fidelity, VanEck, 21Shares and Franklin Templeton to name a few.
Trump Media filed with the SEC for a “Crypto Blue Chip” ETF that would include SOL in the fund.
“Solana can offer fast, secure, and user-friendly trading,” said Nicolas Remond, chief technology officer at SwissBorg (BORG), a wealth management platform in Lausanne, Switzerland. “To me, Solana isn’t just a faster blockchain. It is becoming a fully integrated platform that is trusted, that is scalable, and is increasingly recognized by traditional financial institutions,” he said.
Contributor Disclosure: The writer intends to buy and hold either SOL or one of the Solana ETFs in the weeks ahead.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.