From the dawn of DeFi, Ethereum has been the undisputed king of Layer-1 blockchains, its slick smart contract capabilities and vast developer community making it the perfect foundation for decentralized applications (dApps). The subsequent arrival of Ethereum Layer-2s, rather than put the network in the shade, merely reinforced its overall appeal. Today, though, Ethereum is locked in an increasingly losing battle with a faster, cheaper rival: Solana.
Since New Year’s Day, 2023, the price of ETH has risen by an impressive 124%, an ascent credited to various factors including the arrival of spot ETH ETFs last year. By comparison, Solana’s SOL has skyrocketed by an astonishing 1,872% over the same period: no ETFs, no problem (though they might be in the pipeline).
While the price of a network’s native token is only one part of the story, it’s been hard to ignore Solana’s growing influence in DeFi. With its high throughput, low transaction fees, and thriving developer community, it’s in the midst of its own “moment” – one not unlike Ethereum’s during the original DeFi summer.
The question is, can Solana go from eating Ethereum’s lunch to knocking it completely off its perch? After all, a cursory look at DefiLlama shows that the total value locked (TVL) in Ethereum ($58.7bn) still exceeds that of Solana ($8.4bn). Nonetheless, it’s impossible to ignore the latter’s momentum.
A Solana surge
The expansion of Solana’s ecosystem is evidenced by a whole heap of metrics, from rising daily active users and transaction volume to TVL, which recently saw it leapfrog TRON. Indeed, quarter-over-quarter TVL growth was a stunning 64%.
The quantity of capital flowing into Solana is no surprise given the chain’s ability to process up to 65,000 transactions per second (TPS), driving its 24-hour trading volume on decentralized exchanges (DEXs) past even Ethereum’s. Couple that blazing speed with affordability and you’ve got a recipe for success.
While Ethereum relied heavily on L2s to address congestion and high gas fees, Solana was purpose-built for performance, a fact not lost on projects and developers keen to build and test apps quickly and cost-effectively. Last year, the platform outpaced Ethereum as the leading ecosystem for attracting new devs, per Electric Capital’s 2024 Developer Report – the first time since 2016 Ethereum had been toppled.
The report states that 7,625 new developers joined Solana’s ecosystem in 2024, marking an 83% year-over-year increase. While Ethereum still boasts the largest overall developer base, Solana’s growth proves DeFi builders aren’t hesitant about ‘voting with their feet.’
From lending protocols and launchpads to gaming platforms and staking solutions, Solana is home to many cool projects working at the crypto coal-face – over 200 in total, according to DefiLlama. Of late, one in particular has caught the eye: Xandeum.
Xandeum: Redefining Solana scalability and storage
A scaling solution built to transform decentralized storage and application development on Solana, Xandeum combines the network’s lightning-fast consensus with an infinitely scalable storage layer. Its goal is to unlock a new category of applications it calls storage-enabled dApps – “sedApps.”
The appeal of sedApps is that they give developers seamless, smart contract-native access to exabyte-scale storage without sacrificing performance or affordability. By allowing data to flow effortlessly between standard Solana accounts and Xandeum’s scalable file system, data retrieval is a cinch, making it a game-changer for intensive use cases including AI-powered applications.
In an interview with HackerNoon last year, Xandeum Founder Bernie Blum summed up the appeal of sedApps: “Can you name a single successful web2 app that has been ported to web3 and is successful there? Everything has to be made ‘blockchain compatible’ in web3, which in essence means removing the storage capabilities that every web2 server has had for ages.”
Blum went on to explain that Xandeum solves the storage shortcomings that are preventing a Cambrian explosion of versatile dApp development, particularly from web2 builders. “I expect DeFi to profit from it, being able to store documents (like scanned credit reports) right in the smart contract. Insurance and medical applications need a lot of storage,” noted Blum.
Beyond on-chain storage, Xandeum offers a liquid staking pool where users can stake SOL to earn auto-compounding rewards, including XAND governance tokens, further incentivizing participation in the ecosystem.
A moment in the spotlight
It seems like a lifetime ago that Ethereum cemented its status as a titan of the blockchain world, riding a wave created by talented devs, novel dApps, endless hype, and powerful tech. Fast-forward to today and Solana is building its own legacy, as numerous innovators explore what the network has to offer.
Make no mistake, Ethereum’s reign as DeFi heavyweight champ isn’t yet over. But Solana has dispatched a long list of contenders en route to the mandatory challenger spot. 2025 could be the year of a monumental showdown between the top dogs.
