After Bitcoin and Ethereum, Solana has become one of the most talked about digital assets in the world. Solana is known for being fast and inexpensive to use, and in 2025 it became only the third cryptocurrency to receive approval for a U.S. spot ETF.

But what exactly is Solana, and what should investors understand about it as we continue into 2026?

What Is Solana? (The Simple Version)

Solana is a blockchain, a decentralized digital ledger, built to be extremely fast and inexpensive to use. Like Ethereum, developers can build applications on it. Like Bitcoin, it has its own native currency, called SOL. Solana was designed from the beginning to solve a specific problem: many blockchains are too slow and too expensive for everyday, real world use.

Solana was created by developer Anatoly Yakovenko in 2017 and launched publicly in 2020. The goal was to build a blockchain capable of handling the speed and transaction volume required by modern financial systems, without charging users high fees to do so.

What Makes Solana So Fast?

Every blockchain must answer a basic question: how do thousands of computers agree on which transactions happened and in what order?

Many blockchains slow down because computers must wait to reach that agreement before transactions can be finalized. Solana addresses this challenge with an innovation called Proof of History.

Here is a simple way to think about the concept. Instead of participants constantly debating what happened first, Solana creates a built in timestamp for every event, similar to a certified time stamp on a legal document. Each transaction carries a verified record of when it occurred. Because the order is already established, computers do not need to pause to agree on it, which allows the network to process transactions much faster.

As a result, Solana can handle thousands of transactions per second, with fees that are often less than $0.01.

How has the Price of SOL Moved?

Solana hit its all-time high of approximately $293 in early 2025, driven by heightened institutional interest, the launch of U.S. spot Solana ETFs, and Solana’s strong position in decentralized exchange trading volume. Since that peak, SOL has pulled back by roughly 70%, making it one of the larger drawdowns in the current market correction cycle.

Over the past 12 months, SOL has ranged from a low near $68 to its high near $293. The current price represents a significant discount from that peak, which investors can interpret in two ways: either as a risk signal, or as a potential entry point.

It is also worth noting that Solana has experienced dramatic historical cycles. After the collapse of FTX in late 2022, SOL’s price fell sharply, dropping close to lows around $8.30 and representing an approximately 97% decline from earlier levels, before rallying many times over by the end of 2025. Past performance does not guarantee future results, but this pattern of dramatic cycles is part of what defines this asset class.

Why SOL Matters: How It’s Used and Why Investors Stake It

SOL is the currency of the Solana network. Every time you do anything on Solana, whether sending money, using a DeFi application, or trading a token, you pay a small fee in SOL. That steady demand helps maintain its relevance within the ecosystem.

You can also stake SOL by locking it up to help secure the network and earn regular rewards. Solana currently offers a staking yield of around 6-7% per year, and the waiting period to unstake is typically about 2-4 days, depending on network activity.

Staking SOL on GalaxyOne can earn estimated rewards of up to 6.50% in variable rewards, with 0% platform commission through December 31, 2026*. While some platforms can charge up to 35% on staking rewards, GalaxyOne charges no commission through the rest of the year.

The Breakout Year that Reshaped the Solana Ecosystem

In 2025, Solana reached a major milestone when U.S. spot ETFs launched for the network, making it the third cryptocurrency after Bitcoin and Ethereum to receive this approval. Some of the first Solana ETFs in the United States were structured with staking built in, allowing investors to earn yield in addition to gaining price exposure to SOL. Canada had already introduced staking enabled Solana ETF products earlier in the year, reflecting growing institutional interest in Solana’s economic model. For example, the CI Galaxy Solana ETF (SOLX) launched on the Toronto Stock Exchange in partnership with Galaxy Asset Management, which serves as sub-advisor and executes SOL trading for the fund while facilitating staking of the ETF’s holdings to generate rewards.

Solana also gained attention for its trading activity in 2025. The network captured a significant share of decentralized exchange volume, supported by strong user engagement and expanding on chain infrastructure. Reports throughout the year highlighted Solana’s growing presence in decentralized trading markets and overall ecosystem usage.

Institutional participation increased alongside these developments. Funds and large holders collectively staked millions of SOL tokens, representing a meaningful portion of total supply. Major financial players began using Solana infrastructure for tokenized assets and stablecoin payments, signaling broader real world integration.

Developer growth remained a central theme. Thousands of new developers joined the Solana ecosystem in 2025, reflecting continued confidence in the platform’s performance and tooling. This steady expansion positioned Solana as one of the fastest growing blockchain ecosystems outside of Ethereum.

What Are the Risks?

Solana’s speed and rapid growth come with real tradeoffs.

It has experienced significant volatility in the past. Solana has gone through major price crashes and periods of network outages in its history. While network stability has improved considerably, it still has a shorter track record compared with Bitcoin or Ethereum.

The current pullback is steep. SOL is down roughly 70% from its 2025 peak. Even when network fundamentals remain strong, price and utility can diverge meaningfully in the short term.

Competition is intense. Solana competes directly with Ethereum as well as a growing number of other high performance blockchains. Its market position is strong, but nothing in crypto is guaranteed.

The Main Takeaway

Solana’s 2025 was a story of two distinct phases. The first half of the year brought record highs and rapid institutional adoption, while the second half saw a steep correction in line with the broader crypto market.

Heading into 2026, the network’s fundamentals, including transaction volume, developer growth, real world asset adoption, and staking enabled ETFs, remain stronger than the price alone might suggest. For investors looking beyond Bitcoin and Ethereum, Solana stands out as one of the most established and institutionally supported digital assets, though it comes with real tradeoffs that are important to understand.

For a deeper dive into Solana, read Galaxy Research’s most recent in-depth analysis on the network and its current activities.

Frequently Asked Questions

What is the key difference between Solana and Ethereum?

Solana and Ethereum are both popular blockchains, but they are built around different priorities.

Solana is designed for speed and low cost. It can process transactions very quickly and cheaply, making it well suited for things like payments, consumer apps, and high frequency trading.

Ethereum is designed for depth and trust. It has a much larger ecosystem of developers, tools, and institutions built on top of it, and it secures more total assets than any other blockchain.

The simplest way to think about it: Solana optimizes for how fast something can happen, while Ethereum optimizes for how much can be built and trusted on top of it. In practice, many investors, developers, and institutions use both, because they serve different purposes rather than competing directly with each other.

What makes Solana’s ETF structure different from Bitcoin’s?

One of the defining features of Solana’s U.S. spot ETFs is that they launched with staking integrated into the product structure. That means investors gain price exposure to SOL while also earning staking rewards generated by helping secure the Solana network. Those staking rewards have recently been in the range of approximately 6- 7%annually, though they can vary and there are associated fees. By contrast, current U.S. Bitcoin spot ETFs provide price exposure only and do not generate on-chain yield, since Bitcoin does not operate on a staking model. This structural difference makes Solana’s ETF model more similar to a yield-bearing asset rather than purely a passive price tracker.

Is SOL right for your portfolio?

That decision ultimately depends on your personal financial situation, risk tolerance, time horizon, and overall portfolio construction. SOL is currently trading roughly 70% below its 2025 all time high, reflecting significant market adjustments from peak optimism.

Some investors view large drawdowns as potential long-term opportunities when network fundamentals remain intact. Others see them as signals of elevated risk in a volatile asset class. There is no universal answer, and thoughtful investors typically evaluate both the upside potential and the downside risks before making an allocation decision.

*Reward rate is estimated, variable, and not guaranteed. Rewards are variable and may increase or decrease. Actual returns depend on network conditions. Past performance is not indicative of future results. No platform commission through December 31, 2026. Platform commission is defined as the fee GalaxyOne charges to access staking on GalaxyOne and applies to Inflation and eligible MEV rewards earned while assets remain actively staked. Validators may retain transaction fees and certain protocol-level rewards associated with block production. Residual MEV rewards that are distributed after your assets are unstaked will not be credited to your account. Network transaction fees for sending and receiving SOL still apply.

This content is for informational purposes only and is not investment advice or recommendation to buy or sell Solana or any other security.

Participants, along with Galaxy, hold a financial interest in Solana (SOL). Galaxy regularly engages in buying and selling SOL, including hedging transactions, for its own proprietary accounts and on behalf of its counterparties. Galaxy also provides services to vehicles that invest in SOL. If the value of such assets increases, those vehicles may benefit, and Galaxy’s service fees may increase accordingly. The valuation in this communication is based on technical, fundamental, and market analysis and not on any formal valuation method. For more information, please refer to Galaxy’s public filings and statements. Cryptocurrencies, including SOL, are inherently volatile and risky and ultimate market movements may not align with this statement.

For additional risks related to digital assets, please refer to the risk factors contained in filings Galaxy Digital Inc. makes with the Securities and Exchange Commission (the “SEC”) from time to time, including its Quarterly Report on Form 10-Q, available at www.sec.gov.