September 27, 2025, 2:13 pm | Read time: 5 minutes
Since Solana (SOL) has established itself among the top 5 cryptocurrencies, the coin is increasingly considered a blue chip in the blockchain sector by investors and crypto platforms. Many projects choose to build their apps on Solana. This is certainly one of the key reasons for its newly acquired status. But how did this rapid rise come about?
The Success Factors
Factor number one: Solana’s transaction speed is currently several thousand times faster than Ethereum and about 10,000 times faster than Bitcoin.
Factor number two: Even after switching from Proof of Work (PoW) to Proof of Stake (PoS), Ethereum still consumes significantly more energy per transaction than Solana. In terms of energy efficiency, Solana outperforms not only Bitcoin but also Ethereum by a wide margin.
Factor number three: Popularity with NFT and memecoin projects. NFTs, or Non-Fungible Tokens, and memecoins are the protagonists of blockchain pop culture. While memecoins offer no technical innovations, they have a special coolness factor. They have the power to attract new users to the crypto space. Solana scores here.
Factor number four: price potential. Measured by the total supply, or the programmed supply of Solana tokens on the blockchain of about 570 million, the current price for a top 5 coin seems quite modest. Many investors still see attractive opportunities here.
Factor number five: low transaction costs. Bitcoin and Ethereum can, depending on chain congestion, cause absurdly high transaction costs of up to 100 euros or more. A Solana transaction, on the other hand, usually costs well under a cent.
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The Drawbacks
Where there is so much light, shadows are not far behind. And so the list is correspondingly not shorter:
Drawback number one: The Solana chain is currently not technically equipped to handle its success. There are frequent total outages of the blockchain, where block production comes to a halt. The overload of Solana also leads to a high number of transaction failures.
Drawback number two: the reputation of lacking decentralization. This reputation does not quite match the facts. Although a foundation based in Switzerland backs the Solana chain, it is not a centrally controlled product, as some believe. On the contrary, the number of active validators far exceeds that of other chains perceived as decentralized.
Drawback number three: the often-reported connection of Solana’s success with the operators of the bankrupt exchange FTX. The support of Solana by the now-convicted Sam Bankman-Fried and his crypto platform FTX still hangs over the project as a negative factor. But no one can choose their fans. In this respect, the accusation is at least questionable.
Drawback number four: the competition is not sleeping. When Solana launched in 2017, it was considered incredibly fast, but now there are much faster blockchains. Solana’s hopes rest on the Firedancer update being able to multiply transaction speed to keep up with new competitors.
Drawback number five: the mention by the SEC. Many market participants certainly have not forgotten that in July 2023, the U.S. Securities and Exchange Commission explicitly classified Solana as a security, alongside coins like ATOM, ALGO, MATIC, and others. This could lead to problems in the future.
The SEC Factor
Overall, the SEC and its legal decisions are perhaps the most powerful factor in the success or failure of global digital currencies. These decisions are based on an understanding of digital assets that can be described–at best–as traditional.
While the European Union has created the MiCA regulation to regulate complex digital assets, across the Atlantic, cryptocurrencies are still legally viewed as either iron ore (commodity) or a Coca-Cola stock (security). The perceived unpredictability of SEC decisions hangs over some cryptocurrencies like a Damocles sword, including Solana.
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Solana: Frog or Prince?
Among the so-called “Ethereum killers,” or blockchains that could potentially dethrone Ethereum as Bitcoin’s successor, Solana remains the most promising candidate despite all adversities. This is because competitors also have their respective problems. For example, the BNB chain still ranks one place ahead of Solana in terms of market share.
However, most market observers lack the imagination to recognize an alternative champion. Crypto enthusiasts too closely associate this blockchain with Binance and the fate of the crypto platform. After the trial against founder Changpeng Zhao, the star appeal of the project and coin has given way to great disillusionment, even though the BNB blockchain is technically capable and operates independently of Binance.
Then there’s Cardano (ADA), but it also seems to be faltering. The criticism: The project has become too intellectual, too much science, too little practical use. The brilliant founder Charles Hoskinson regularly defends against all accusations eloquently. Nevertheless, it lacks momentum. Cardano is at risk of dropping out of the top 10.
Perhaps it’s Avalanche (AVAX), Polkadot (DOT), or NEAR Protocol (NEAR) that will challenge Ethereum in the next bull run. Unless a completely new project manages to surge forward with the momentum of the untested and challenge Ethereum to a duel.
The Solana Phone
One thing Solana has, at least for now, exclusively: its own phone. Many see the announcement of Solana’s Web3 phone Saga 2, which is already available for pre-order and set to be delivered in 2025, as a clever move in the race for crypto supremacy.
There are already highly adventurous rumors surrounding the potential advantages and rewards of the Solana phone. If even half of them are true, Solana is sure to gain new momentum.
All hints and information mentioned in the text do not constitute investment advice or a recommendation to buy or sell securities (§ 85 WpHG).