Ethereum vs Solana: The Infrastructure Battle

Welcome back to Old Man New Money. I'm Douglas Borthwick and today we're talking about the most important infrastructure decision in digital securities right now, Ethereum or Solana. On September 3rd, 2025, Galaxy Digital tokenized their NASDAQ listed shares on Solana. This was huge. The first SEC registered public equity tokenized directly on a major blockchain. Real shares, full shareholder rights, 24/7 trading potential. But here's what made it extraordinary. They chose Solana over Ethereum.

And that decision tells us everything about where this market is headed because traditional finance is making what I genuinely believe is a trillion dollar infrastructure mistake. They're choosing the blockchain that feels familiar or the blockchain that actually works at the scale modern finance requires. And here's your 30 second version. Ethereum is the established smart contract platform with the largest developer ecosystem and most institutional adoption. It's secure, battle tested and regulatory friendly, but it's slow and expensive. 15 to 30 transactions per second with fees often exceeding $20.

Solana, on the other hand, is the high performance alternative. Thousands of transactions per second with subcent fees. It's faster than Visa. Galaxy chose Solana for public equity because performance matters. For low volume private securities, Ethereum works fine. But for high frequency public markets, Solana is necessary. And we're at an inflection point. For years now, Ethereum was the only choice for serious blockchain applications. If you wanted institutional credibility, regulatory comfort and a mature ecosystem, you chose Ethereum. And that's what we did at INX.

Back in 2020, when we were doing the first SEC registered security token offering, we chose Ethereum. Not because it was technically superior, but because it was a known quantity to the SEC. Regulators understood Ethereum. They'd established frameworks for it. We didn't want to spend time educating regulators about a different blockchain when we were already pioneering blockchain based securities. But September 3rd, 2025 changed everything. Galaxy Digital got SEC approval to tokenize public equity on Solana. The regulatory moat that protected Ethereum, it just fell.

And now the question becomes purely about performance and on performance, Ethereum loses badly. Let me give you numbers that should terrify anyone who's all in on Ethereum. Ethereum processes 15 to 30 transactions per second. During network congestion, fees spiked to 20 bucks, 50 bucks, sometimes over a hundred dollars. Transactions, transaction finality takes 12 to 15 minutes. Average fees this year are about $1.85. But complex smart contract interactions during peak times can exceed $95. Meanwhile, Solana processes thousands of transactions per second. Real world performance is around 900 transactions per second.

Stress tests have hit 100,000 transactions per second. Transaction fees are a quarter of a cent, .00025 dollars. That's over 10,000 times cheaper than Ethereum. Finality, currently 12.8 seconds. But with the AlpinGlo upgrade rolling out now, that drops to 150 milliseconds. 150 milliseconds is faster than a Google search, faster than a Visa card transaction, fast enough that users can't perceive a delay. And here's the framework I think traditional finance completely misses. Success isn't about which blockchain is better in absolute terms. It's about which blockchain is better than what it's replacing. Think about private equity.

You've got lawyers, paperwork, waiting periods, massive friction, no secondary market, maybe 50 to 200 sophisticated investors transacting a few times per year. Ethereum crushes this use case. A $20 gas fee and a $50,000 equity transaction, that's nothing. The compliance tools exist, the legal frameworks exist, institutional familiarity exists, literally anything beats the current off-chain process. But now think about public equities. NASDAQ gives you sub-second execution, minimal fees, instant confirmation during market hours, thousands or millions of shareholders trading frequently.

High frequency trading firms executing thousands of transactions per second, market makers updating prices in real time. And this is where Ethereum fails. The bar for improvement is dramatically higher. You need comparable speed to lower costs, massive transaction capacity. Paying 20 bucks in gas and waiting 15 minutes doesn't compete with traditional finance, it's subjectively worse. Solana clears that bar, Ethereum can't, and that's the whole game. Let me be clear about my position. I believe Solana will become the dominant smart contract platform for high throughput applications, not might, will. And this isn't about Bitcoin.

Bitcoin is digital gold, store of value, that role is secure. This is specifically about smart contract platforms. I developed the Insumer model, a framework for turning customers into stakeholders through tokenized equity. For that model to work at scale, you need instant verification when someone walks into a store. You need micro transaction capability for small rewards. You need high throughput for retail environments with thousands of simultaneous verifications. And Ethereum can't deliver that experience. Imagine waiting 30 seconds and paying $20 just to prove you own shares for a 10% discount. It's economically absurd, but Solana can.

Subsecond verification, fraction of a cent cost, seamless user experience. That's why I'm betting on Solana for consumer facing applications and high frequency use cases. And here's something that should concern Ethereum supporters. The developers are moving. For the first time since 2016, a blockchain ecosystem attracted more new developers than Ethereum. In 2024, Solana onboarded 7,625 new developers, compared to Ethereum 6,456. Electric Capital analyzed 902 million code commits across nearly 2 million repositories. The data is crystal clear. The talent is moving to where the performance is. And this momentum continued into 2025.

Solana now averages 2,500 to 3,000 monthly active developers. India, the world's second largest developer market, is the only country where new developers joined Solana at a higher rate than any other blockchain. And these aren't vanity metrics. This is the future voting with their keyboards. Let me give you usage data because this tells the real story. Solana is five years old, launched in March 2020. Let's compare it to Ethereum at five years old. In 2020, five years after Ethereum launched, the network was processing about 1.1 million transactions daily, about 500,000 active addresses. Solana today also at five years old.

Well, in the third quarter of 2025, Solana averaged 93.5 million daily transactions. That's 85 times more than Ethereum at the same age. Even now in October, with Mimcoin Mania cooled off, Solana still processes 64 million daily transactions. That's 40 times more than Ethereum does today. Active addresses? Solana hit 22.44 million. That's four to five times more than Ethereum's five year mark. And this isn't speculation. This is actual usage at scale. Let's talk about stablecoins because this is where you see the efficiency gap most clearly. Yes, Ethereum hosts $172 billion in stablecoins compared to Solana's 13.9 billion.

Traditional finance looks at those numbers and thinks Ethereum's winning, but they're measuring the wrong thing. Every stablecoin dollar in Solana drives eight times more D5 volume than Ethereum. Eight times. Why? Because when transactions cost pennies, people actually use the stablecoins. When transactions cost 20 to 50 bucks, people just hold them. Solana captured 43% of all global DEX volume in the first half of 2025. Processed 81% of all blockchain DEX transactions. Third quarter volume hit $326 billion.

Jupiter, Solana's leading DEX aggregator, processes over 50% of all DEX aggregator volume across all blockchains, not just on Solana, across every chain. 4.4 million people use Solana for stablecoin transactions every single day. These aren't crypto degens. These are real users sending real money because it actually works. Now, Ethereum maximalists will say, but what about layer two solutions? Fees are lower in layer twos. True. But here's what they're not telling you. You've fragmented liquidity across dozens of rollups. Arbitrum, optimism, base, ZK sync, polygon, scroll, linear. The list keeps growing. Each one has its own bridge risk.

Each one fragments the user experience. Each one requires developers to choose which layer two to build on, which means choosing which slice of liquidity to access. And you still don't get Solana's speed. Even the fastest layer twos are measured in seconds, not milliseconds. Solana just works. One network, unified liquidity, instant confirmation, no bridges, no fragmentation, no choosing between layer twos. The market is speaking, but are you listening? And let me be intellectually honest. Ethereum isn't going away and there are legitimate reasons to choose it. Ethereum has the most mature ecosystem.

More developers, more tools, more documentation. If you're building something complex, that ecosystem matters. Ethereum has deeper institutional relationships. BlackRock chose Ethereum for tokenized treasuries. JP Morgan built Onyx on Ethereum. These relationships and existing infrastructure create inertia. Ethereum has more regulatory precedent until Galaxy Solana approval. Ethereum had a years long head start with regulators. For private company tokenization with low transaction volumes, Ethereum still makes perfect sense. For institutional only applications where users can bear higher costs.

Ethereum works fine, but for consumer facing applications, for higher frequency trading, for applications that need to compete with traditional finance on speed and cost, Ethereum can't compete. Let me address the Solana sacrifices security for speed narrative, because this needs to die. Solana had growing pains. Network outages in 2021 and 2022 were real, but those issues forced the network to harden its infrastructure. The result, a battle tested system that now processes billions of dollars in daily volume without breaking. The network has a Nakamoto coefficient of 20. That's one of the most robust measures of decentralization.

When they proposed the AlpenGlo upgrade, 98.27% of validators approved it. That's decentralized governance working. And here's what matters. Users trust it with their money. In the second quarter of 2025, Solana generated over $271 million in network revenue. That's fees paid by real users for real transactions. That's the third consecutive quarter leading all blockchains. Compare that to Ethereum. Despite successful upgrades, main net activity hit its lowest levels since July 2020. Transaction counts are down. ETH ETF flows are negative. ETH to Bitcoin ratio at multi-year lows. The market is telling you something.

September 3rd, 2025 was the turning point. Galaxy Digital's approval to tokenize public equity in Solana means regulatory precedent now exists on both platforms. The moat that protected Ethereum is gone. With Sol strategies now listed on NASDAQ and a Solana spot ETF likely approved any day, institutional access becomes equal. When regulatory risk is equal, why would anyone choose a slower, more expensive option? Let me tell you what's coming with Solana's Alpin Glow upgrade because this is game changing. Approved by 98% of validators launching in the first quarter of 2026, transaction finality will drop to 150 to 200 milliseconds.

That's faster than many traditional databases. throughput could hit 10,000 transactions per seconds in real world conditions. For high frequency applications for consumer-facing apps for anything that needs to feel instant, this makes Solana the only viable. Ethereum's roadmap talks about eventually getting to thousands of transactions per second through sharding and layer twos. Eventually, someday, maybe, but Solana is delivering that performance now. Here's what I think happens over the next 24 months. Stablecoin dominance shift to Solana as issuers and users prioritize efficiency.

New asset tokenization launches on Solana for anything requiring high throughput. Developer talent completes its migration to the platform that actually works. Consumer apps become Solana native because users demand better experiences. Business models requiring high frequency, low-cost transactions finally become viable. Ethereum will remain important for certain use cases, low-frequency institutional applications, private markets, legacy infrastructure that's too expensive to migrate, but the growth, the innovation, the consumer adoption, that happens on Solana. Let me summarize the key numbers.

Solana processed 81% of all blockchain DEX transactions in recent months, 4.4 million daily stablecoin users paying fractions of a cent per transaction, $271 million in second quarter network revenue leading all blockchains, 64 million daily transactions, 40 times more than Ethereum processes today. And these aren't projections. This is current reality. Well, let's talk about risks because nothing's guaranteed. Solana could have another network outage. It's happened before. Though the network is much more stable now, it's not immune. Ethereum could successfully scale through layer twos and sharding.

If they solve the fragmentation problem and achieve Solana like performance, the thesis changes. Regulatory developments could favor one chain over another, though with Galaxy's approval, this seems unlikely. Developer momentum could shift back to Ethereum if ecosystem advantages outweigh performance. These are real risks, but the trend is clear. Performance matters. Users care about speed and cost. Developers follow users. What should you do right now? Set up both a MetaMask wallet for Ethereum and a Phantom wallet for Solana. Experience both. Make test transactions. Feel the difference. Understanding comes from usage.

Compare transaction costs and speed. Swap tokens on Uniswap on Ethereum. Then swap on Jupyter on Solana. Compare the experience and cost. Research which blockchain your company should use. If you're building for institutions with low volumes, Ethereum might be fine, but if you're building for consumers or high frequency, you need Solana. Follow Galaxy Digital's tokenized equity in Solana. This is the proof point. Watch how it performs. This is the future of public securities. Consider investing in both ecosystems. The truth is we might see specialization. Ethereum for certain use cases, Solana for others. Diversification makes sense.

Look, I've spent 30 years on Wall Street. I understand institutional inertia. I understand why traditional finance gravitates towards the familiar, but familiarity is a terrible reason to make a trillion dollar infrastructure bed. At INX, we chose Ethereum in 2020 because it was the safe, regulatory friendly choice. If we were launching today, I'm guessing we'd probably consider Solana for any high throughput application. Galaxy Digital figured this out. They evaluated performance, not brand recognition. They chose Solana for public equity tokenization, and they chose correctly. The data doesn't lie.

81% of blockchain DEX transactions, 4.4 million daily stablecoin users, $271 million in quarterly revenue, leading all blockchains. Developers know it, users know it, the data proves that traditional finance doesn't know it yet, but they will. In the next episode, we're diving into stablecoins. The bridge between traditional finance and crypto, how they work, why they matter, and how they're going to become the primary medium for digital securities trading. I'm Douglas Borthwick. This is Old Men, New Money. If you found this valuable, share it with someone who still thinks Ethereum is the only option.