Solana (SOL): What It Is, How It Works and How To Buy
Solana's supporters see it as a faster and more efficient competitor to Ethereum.
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In October 2024, the price of the cryptocurrency Solana (SOL) hit an all-time high of more than $230, before beginning a long downturn that brought the price below $130 in March 2025. Despite this volatility, Solana is among the top 10 largest cryptocurrencies in the world in terms of market cap.
What is Solana?
Solana, a blockchain network that launched in 2020, saw a rapid increase in interest after launch from both cryptocurrency enthusiasts and developers who started using it to build decentralized applications for industries such as finance, computer science and even art. Developers can use Solana to build products that allow users to carry out secure transactions and execute digital contracts. Supporters describe Solana as a faster and more efficient competitor to crypto powerhouse Ethereum.
Like some other cryptocurrencies, however, Solana has seen a precipitous drop from its historic highs of 2021. And the decline for Solana has been particularly sharp due in part to some issues with the reliability of its network, which has seen several outages during times of heavy use.
In 2024, it briefly experienced a comeback along with many other cryptocurrencies, due to bullish sentiment related to the April 2024 Bitcoin halving event and, later that year, the election of Donald Trump, who promised to be a pro-crypto president. In 2025, however, it has sold off along with other cryptocurrencies, as the hype from the 2024 crypto bull market has worn off.
» Interested in other cryptocurrencies? Learn how to invest in Bitcoin.
Solana's strengths
Despite Solana’s recent price drop, the blockchain technology itself still has some advantages worth considering:
Technology | Innovative. One innovation touted by Solana’s supporters is a capability known as “proof of history.” The network uses a timestamp feature in addition to a proof-of-stake consensus mechanism, which helps to increase transaction speeds. The proper ordering of transactions is crucial to network security and functionality, and Solana’s developers say they’ve found a way to reliably record the timing of any message in a way that anyone else on the network will be able to verify, regardless of when they receive it. |
Network Speed | Very fast. Solana’s blockchain network can handle more than 50,000 transactions per second, making it one of the fastest blockchains available. For comparison, Ethereum’s blockchain network can handle only about 30 transactions per second. |
Pricing | Affordable. While the price of each SOL token has dropped dramatically in recent weeks, it has never reached the heights of the largest cryptocurrencies like Bitcoin or Ethereum. |
Transaction fees | Low. Solana’s transaction costs are extremely low, averaging around one-fortieth of a penny for each transaction on the blockchain network. |
Solana controversies and red flags
Solana's rapid growth has caused problems of its own. On Sept. 14, 2021, Solana was offline for about 17 hours after a crash caused by a flood of transactions generated by bots. Solana’s governing organization noted that no funds were lost and that the network was able to recover fully within a day, arguing that the situation was a demonstration of Solana’s resilience.
That was just one in a series of outages to hit the network over the course of a year. And the uncertainty has taken a toll on Solana’s price.
In November 2022, it was revealed that Solana had financial ties to Alameda Research and FTX, both founded by Sam Bankman-Fried. Alameda Research, FTX and its U.S. arm FTX.US all filed for Chapter 11 bankruptcy. In the fallout, Solana’s price dropped about 90% from its one-year high.
More recently, Solana has become one of the blockchains of choice for high-volatility meme coins, some of which are prone to crashing suddenly when insiders or large holders sell their stakes. This type of pump-and-dump scheme, known as a "rug pull" in crypto parlance, has become a major issue in crypto markets in recent years.
Broadly, it’s important to note that many people who trade cryptocurrency are speculating, often taking fliers in search of explosive growth, rather than investing based on firm theories. But whatever your approach, a guideline is to make crypto holdings a small portion of your overall portfolio — say somewhere around 5% to 10% — much as you would with other concentrated investments like individual stocks.
How to buy Solana (SOL)
Solana can be bought on decentralized or centralized cryptocurrency exchanges, or through certain online brokerage accounts.
Centralized cryptocurrency exchanges
As a top-10 cryptocurrency by market cap, Solana is widely available on centralized cryptocurrency exchanges such as Kraken and Crypto.com (the two highest-scoring exchanges we review).
These exchanges make it easy to buy Solana using fiat currency such as dollars, and many accept credit and debit cards. However, many charge substantial fees on cryptocurrency trades.
Another problem with centralized exchanges is that user investments may be at risk if the exchange collapses — some crypto investors learned this the hard way during the implosion of FTX in 2022.
Decentralized cryptocurrency exchanges
Decentralized crypto exchanges (DEXs) such as Uniswap can offer users more control over their funds than a centralized exchange, and are often cheaper in terms of trading fees. However, they come with a much steeper learning curve, and they may not accept fiat currency at all — some DEXs only support crypto-crypto trading.
Certain online brokers
Some online brokerage accounts allow investors to buy cryptocurrency alongside traditional investments such as stocks and bonds. Of the brokers we review, three offer Solana:
Like centralized cryptocurrency exchanges, online brokers with crypto offerings give investors a convenient way to invest in coins such as Solana (especially if they're trying to build a diversified investment portfolio with non-crypto assets such as mutual funds as well).
However, many online brokers only allow investors to buy and sell Solana for fiat currency on their platform. Basic capabilities like sending Solana to someone else, transferring it to an external wallet, or trading it for other cryptocurrencies may be unavailable.
Should I buy SOL?
Buying any cryptocurrency can be a risky move. Solana is a relatively new entrant into a new, untested field.
Blockchain may never develop into the disruptive economic force that many of its devotees anticipate or it may take many years longer than expected to reach its potential. And even if it does, Solana may not wind up being a big winner in this hotly contested space.
“Like anything else, it will be a winner-take-most market,” said Bill Birmingham, then head of research for Osprey Funds, a Tarrytown, New York, firm that offers an investment trust focused on Solana, in a 2022 email interview.
Birmingham says he is hopeful that Solana will deliver on what he sees as its significant potential.
He also suggests that people thinking about buying any cryptocurrency look at how quickly it is being adopted. Some metrics to examine include the number of active wallets, which are accounts in which users can hold a cryptocurrency, and the number of transactions over time.
They can also look at how tokens are distributed to get a sense of the risk for inflation. Birmingham says useful data for these purposes is available online through Solana’s Explorer feature and the site Solana Beach.
» Thinking about buying SOL? Here are our picks for best bitcoin and cryptocurrency exchanges.
The author owned Solana, Ethereum and Cardano at the time of publication. The editor owned Ethereum at the time of publication.
