Better Buy in 2026: Ethereum or Solana?

Decentralized applications are increasingly popular in areas like financial services and gaming, where people value transparency and low costs. Slivers of computer code called smart contracts govern how these apps function, and they can't easily be changed, which safeguards each app from manipulation by humans or companies.

Ethereum (CRYPTO: ETH) is the world's largest platform for developing decentralized apps, and it has a built-in payment mechanism powered by its native cryptocurrency, Ether. However, Ethereum faces growing competition from alternatives like Solana (CRYPTO: SOL), which offer improved efficiency.

Are investors better off buying Ether as we head into 2026, or is Solana poised to outperform?

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The case for Ethereum

The Ethereum network is fully decentralized. Rather than being hosted in one centralized data center, it's powered by thousands of nodes (computers) around the world, and each of them stores a full copy of its blockchain. Therefore, Ethereum will always remain fully active even if some nodes fail, which is why the network boasts zero downtime over the last decade. This gives developers confidence that their decentralized apps will face minimal disruptions.

Thousands of decentralized apps have been built on Ethereum so far. One of the most popular is Uniswap, which is an exchange for investors who want to trade their cryptocurrencies for other cryptocurrencies. Pricing and execution are handled by smart contracts, so no intermediaries are required, which significantly reduces costs and processing speeds. Users don't even need to make an account, because they can simply plug their crypto wallets into the platform and start trading.

Uniswap differs greatly from centralized exchanges like Coinbase, which charge a commission to match buyers and sellers to execute trades. Plus, due to stringent regulations, Coinbase must verify the identity of every user by forcing them to make an account.

Popular prediction platform Polymarket was also built on Ethereum, but it uses a Layer-2 blockchain solution called Polygon, which makes the original network more efficient. Polymarket allows users to bet on the outcome of everything from sporting events to elections by buying and selling contracts (like shares), which represent the likelihood of a given outcome.

Whenever someone interacts with a decentralized app built on Ethereum, they activate smart contracts which trigger fees payable in Ether (though Ether-based fees aren't always applicable when Layer-2 blockchain solutions are used). Therefore, as the Ethereum network grows, demand for Ether also typically increases, driving the price per coin higher.

The case for Solana

The decentralized Solana network is conceptually very similar to the Ethereum network, except with a few key improvements.

Ethereum uses a Proof of Stake (PoS) validation mechanism, meaning participants in the network have to put up Ether coins as collateral to earn the right to verify transactions and add blocks to the blockchain. They earn rewards for doing so, but they can also lose their staked coins if they misbehave. Solana uses PoS, but combines it with a Proof of History (PoH) mechanism that encodes every transaction on the blockchain with a timestamp.

Solana's approach speeds up the verification process so thousands of transactions can be verified per second, whereas Ethereum is often limited to just 15 transactions at a time before network congestion drives a big increase in fees (called "gas").

Decentralized apps built on Solana also run on smart contracts, and whenever one of these contracts is activated, it triggers a fee payable in Solana coins. However, thanks to Solana's hybrid PoS and PoH validation mechanism, its fees are typically much lower than Ethereum's, which is why it's becoming a popular destination for decentralized app developers.

Jupiter, a decentralized crypto exchange, and Magic Eden, a marketplace for non-fungible tokens (NFTs), are just two of the popular apps built on Solana.

The verdict

Higher network activity directly translates to more gas fees, which creates organic demand for Ether and Solana. As a result, network usage might be one key factor that determines the better-performing cryptocurrency in 2026.

Based on the evidence at hand, Solana might be the winner. Over 3.6 million unique wallet addresses are active in its network every day, which is almost seven times more than the 530,000 daily active addresses using Ethereum.

However, crypto markets are highly volatile. Price movements often happen independently of network activity, as speculative investors pile in and out of different coins based on where they believe they will find the best returns. In fact, Solana is down 32% this year, whereas Ethereum is down just 15%, so having more active users won't necessarily lead to better performance in 2026.

Ethereum was the first mover and remains the leader of the decentralized revolution, so it simply has more visibility in the investment community. It regularly receives coverage on Wall Street, and one top analyst -- Tom Lee of Fundstrat Global Advisors -- believes that Ether could soar 149% to $7,000 per coin over the next few months alone.

With that in mind, it's possible that Ether will outperform Solana again in 2026. However, investors who believe in the potential of decentralized apps over the long term could benefit from owning both coins.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.