Solana Is Gaining on Ethereum Fast. Should Investors Be Concerned?

Key Points

• Solana is seeing capital flock to its chain to invest in its ecosystem.

• Tokenized stocks are a particularly appealing asset class on the chain.

• Ethereum's capital base is much larger, but it isn't growing as quickly.

• 10 stocks we like better than Solana ›

By some measures, Solana (CRYPTO: SOL) is currently moving at a sprint, while its larger rival Ethereum (CRYPTO: ETH) is merely trotting along.

Will Solana's momentum close the gap and lead to an equilibrium with both assets at roughly parity, or does it seriously threaten Ethereum's lead precisely where it counts for future value?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

This metric can't be denied

There's one dimension in particular that Solana is powering ahead in: total value locked (TVL).

TVL measures the crypto capital deposited in a network's ecosystem, which is to say its decentralized applications (dApps) and smart contracts. The higher the TVL, the more valuable the chain is as a whole, as a high TVL indicates that there's plenty of capital looking to make use of whichever projects are in the chain's ecosystem. And during the past 12 months, Solana's ecosystem TVL climbed by about 198% to reach roughly $38.5 billion.

Ethereum doubled its TVL during the same period, and it still has a much higher TVL, at about $362.7 billion today. So it's also growing rapidly, just not anywhere near as rapidly as Solana. And scale still favors Ethereum by a wide margin if you look at the most conservative gauge, the stablecoin base. Ethereum hosts about $161.1 billion of stablecoins versus roughly $12.9 billion on Solana, or more than 10 times as much.

In other words, Solana is gaining fast on activity, while Ethereum remains the larger economic zone by far. That means Ethereum's network effects are intact, but the growth differential is real enough to change market share if it persists.

Why Solana could keep gaining

The odds of this dynamic continuing are high because Solana is positioned to win a major new growth segment where it's simply superior to Ethereum across certain core features, like transaction speed and low transaction costs.

As you may know, real-world asset (RWA) tokenization is the process of recording ownership of financial assets as tokens on blockchains so they can be moved and managed with software. The idea is that tokenization generally offers asset managers and asset holders faster settlement, stronger regulatory compliance controls, and broader access.

Solana is quickly becoming one of the preferred venues for issuing and trading tokenized stocks, one of the biggest categories in the tokenization market. There's currently $69.2 million in tokenized stock value on the chain right now, nearly all of which accrued during the past three months, whereas Ethereum has $274.8 million, most of which flowed in within the past 30 days or so.

But to add some context, Solana's sum of all tokenized assets grew by 35% to reach $671.4 million during the 30-day period ended Sept. 24 alone. In contrast, Ethereum's total tokenized asset value only grew by 2% in the same period, reaching $9 billion. This is another case where Solana is making inroads very quickly against the other chain's enormous capital base, which proportionally isn't expanding nearly as fast.

But what should long‑term investors do with this information?

First, if you hold Ethereum, don't panic. The network has such a huge cache of assets, and so many financial institutions that are building applications with it, that it won't be going away. Tokenized assets are just one of its many avenues for growth, and it's probably going to end up securing a large portion of the assets up for tokenization as a result of its size.

If you're considering a purchase of Solana, take this to be yet another sign that you should move ahead and take the plunge. The asset tokenization market is still in its sophomore days, and Solana is very likely to be a big winner in at least one of the many segments of that market; beating Ethereum in at least one segment is a slam dunk, and that will be enough to drive significant returns.

While it's worth investing a bit more in the faster horse here (Solana), a well-diversified crypto portfolio should own both of these coins. Just be aware that both will face some stiff competition from other chains in the future, regardless of how well they're performing today.

Should you invest $1,000 in Solana right now?

Before you buy stock in Solana, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Solana wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,872!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,092,280!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 189% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 22, 2025

Alex Carchidi has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool has a disclosure policy.