Is Ethereum Still Worth Buying After Being Overtaken by Faster Networks?

Even if the interface for your investment account might be a bit clunky sometimes, generally speaking, almost everyone expects their financial technologies to perform fairly quickly. On that front, Ethereum (CRYPTO: ETH) processes about 15 to 36 transactions per second (TPS), and the average token swap is completed in around 12 seconds as of May 8. But that paltry sum looks embarrassing when stacked against the competition. Solana (CRYPTO: SOL), for instance, processes as many as 4,700 TPS. It also wraps up swaps in around a second.

So is there any point in ever buying Ethereum, given how much slower and lower-throughput it is compared to Solana and other competitors?

Image source: Getty Images.

Speed isn't the only factor, but it's an important one

First, let's get a more thorough understanding of how Ethereum shapes up compared to other leading chains like XRP and Cardano on the basis of its speed, throughput, and transaction costs.

As you can see, only Cardano fares worse on settlement speed, and even that's forgivable considering that its transaction costs are quite a bit lower. However, speed isn't the only thing that separates a good crypto chain to invest in from one that's not worth your capital.

But before writing off this coin entirely, don't forget that the crypto-financial system runs on liquidity, not velocity.

Ethereum hosts roughly $166 billion in stablecoins. That's just over half the roughly $323 billion global stablecoin supply. In contrast, while Solana's stablecoin pool has tripled in the past year, it still totals about $15 billion.

That's important because stablecoins are capital that's parked on-chain, ready to be lent, swapped, or invested into promising projects or growth segments. The size of Ethereum's stablecoin base is a big part of the reason why institutional players have overwhelmingly chosen it as their launching ground for future crypto operations. In other words, asset managers don't need instant transaction finality to rebalance a Treasury portfolio so much as they need deep liquidity, and Ethereum is unmatched there.

Upgrades might help to close the gap

Another thing that mitigates Ethereum's disadvantages in speed is that its next update, Glamsterdam, is scheduled to launch in mid-2026. It introduces parallel transaction processing, letting the network execute multiple operations simultaneously instead of one at a time, and likely reducing transaction times and fees at the same time.

That won't erase Solana's lead overnight, and that chain in particular will probably always be faster than Ethereum, as speed is one of its main focuses.

Still, Ethereum's intent to make progress on this issue is more than enough to discard the idea of immediately selling it. If its recent progress on cutting gas prices is anything to go by -- they're down by 99% over the last five years -- it'll eventually be quite snappy regardless of where it is in the pecking order right now.

Alex Carchidi has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.