Is Solana a Good Investment in 2026? What TPS Growth and DeFi Data Tell Us

SOL at $104.86 in September 2026 sits 23% above its 200-day moving average and 64% below its January 2025 all-time high of $293. That positioning captures the essential tension in the SOL price forecast debate: the recovery from this year's lows is confirmed on the chart, but the prior peak is still far away. Whether the current level is a good investment entry depends less on which direction the chart points and more on what the network's fundamental data says about whether the activity that drove the 2024-2025 cycle can sustain and expand through the next one.

The TPS Story: What the Throughput Numbers Actually Mean

Solana's architectural pitch is based on speed. The network can process thousands of transactions per second at fees measured in fractions of a cent. That is not a theoretical spec. It has been demonstrated under real load during periods of high network activity when memetoken launches, NFT mints, and DeFi trading spikes have stress-tested the system.

The relevant analytical question is not whether Solana is fast. It is whether that speed is generating durable economic activity. Transaction count alone is not the answer: Solana's TPS figures include a large proportion of vote transactions, the consensus mechanism's internal messages, and failed transactions, which inflate the raw count without representing equivalent economic value to successful application transactions.

The cleaner metric is fee revenue. Total fees paid by users to execute transactions on Solana reflect economic demand for blockspace. When fee revenue is high and growing, users are competing for blockspace, applications are attracting real usage, and the fee-burn mechanism is meaningfully reducing net SOL issuance. When fee revenue is low, the inflation schedule continues without meaningful burn offset.

Through the 2024-2025 cycle, Solana's fee revenue grew substantially as memetoken launches, high-frequency DEX trading on Raydium and Phoenix, and the Jupiter aggregator routing volume all contributed to genuine blockspace demand. In 2026, that activity has moderated from peak levels. The stabilisation rather than collapse is what distinguishes the current cycle from the 2022 collapse that took SOL from $260 to $8: the ecosystem retained a meaningful user base through the drawdown, rather than seeing activity evaporate entirely when the speculative mania ended.

The DeFi Ecosystem: What Has Survived and What Has Grown

Solana's DeFi ecosystem in September 2026 is meaningfully more mature than it was at the 2021 peak, and that maturity is observable in the composition of activity rather than just the aggregate figures.

Jupiter has become the dominant liquidity aggregator on Solana, routing the majority of swap volume across multiple AMMs and order books. Its volume figures are a proxy for retail and bot-driven trading activity on the network. Sustained Jupiter volume indicates that the trading use case, one of the primary drivers of Solana's network activity, remains active even during the 2026 consolidation period.

Kamino Finance has built a significant money market with genuine borrow and lending activity, representing DeFi usage that is application-driven rather than purely speculative. Borrowers and lenders on Kamino are engaging with the network for financial reasons, not just trading tokens. This type of usage tends to be stickier through market cycles than pure speculative activity.

Raydium's automated market maker handles a substantial proportion of the liquidity depth behind Jupiter's routing. The health of Raydium's liquidity pools is directly connected to the viability of token trading on Solana: thin liquidity means high slippage, which reduces the competitiveness of Solana's DEX ecosystem relative to alternatives.

The combination of these protocols creates an ecosystem with sufficient depth and liquidity that new projects choosing where to launch face a genuine trade-off between Solana and Ethereum's layer-2 ecosystem, rather than a one-sided decision. That competitive position is worth quantifying: Solana's DeFi TVL relative to Ethereum's base layer and major layer-2 protocols provides a market share signal that updates in real time.

The Staking and Supply Dynamics

Approximately 68% of circulating SOL, roughly 400 million tokens from the 586 million in circulation, is locked in staking. That staking rate creates a supply picture with two important implications for investors.

The first is that the liquid float is approximately 187 million SOL, or roughly $19.6 billion at the current price. This is the supply available to meet selling or buying pressure in the trading market. Institutional ETF purchases absorb from this liquid float, which is why ETF inflows have a larger price impact relative to the total market cap than they would for an asset with lower staking participation.

The second is the 6% annual staking yield. A holder who stakes their SOL earns 6% in additional SOL per year. That yield is not paid from an external source: it comes from the network's inflation schedule, distributed as staking rewards to validators and nominators. As the inflation schedule decays toward the 1.5% terminal rate by 2032, the yield will decrease over time, but it remains significant at current rates.

The inflation schedule itself is the supply pressure that partially offsets the staking yield's attractiveness. At 4% annual inflation, 68% staking participation means that the net dilution per unstaked token is the full 4% inflation dilution rather than being offset by staking rewards. Holders who do not stake are paying an implicit cost equal to the inflation rate minus whatever staking yield they are forgoing. This creates an incentive to stake, which is part of why the staking rate is so high.

The ETF Catalyst: Six Issuers, Staking Yield Included

Six issuers, Bitwise, Grayscale, 21Shares, Franklin Templeton, Invesco Galaxy, and VanEck, all launched spot Solana ETFs in the US, most of which pass staking rewards through to holders. That is a structurally different institutional access point from what was available during the 2024-2025 cycle when Solana's run to $293 occurred primarily through direct purchase by crypto-native participants.

The staking yield pass-through is the most significant design difference from Bitcoin ETFs. An institutional allocator who holds the Solana ETF receives the approximately 6% staking yield in addition to price exposure. Against a backdrop of falling interest rates, that 6% yield becomes more attractive to income-oriented allocators who might not have otherwise considered crypto exposure. It positions Solana as a potential alternative to dividend-paying equities or lower-yielding bonds for the portion of a portfolio seeking yield with growth exposure.

The practical question is whether this institutional access vehicle is drawing the allocators who were waiting for it. Early post-launch data showed meaningful inflows. By mid-2026, those inflows had moderated, consistent with the pattern seen in Bitcoin and Ethereum ETFs where initial pent-up demand flows through quickly and ongoing flows depend on continued new entrants. The September FOMC's rate signal will likely be a significant driver of whether the next wave of institutional allocations, the discretionary allocators who waited for macro clarity before committing, finally enter through the ETF channel.

The Value Capture Debate: the Honest Uncertainty

21Shares, one of the ETF issuers, published institutional research framing the central analytical question for Solana precisely. The report noted that Solana's scale has been proven but value capture has not been. This is the most honest framing of the bear case for SOL at the fundamental level, and it deserves explicit treatment.

The fee-burn mechanism connects network activity to SOL's value by reducing supply in proportion to fee revenue. For that mechanism to make SOL fundamentally valuable, fee revenue must be substantial enough that the burn rate meaningfully reduces net issuance. At current fee levels, the daily burn is a modest fraction of the daily issuance from the inflation schedule. During peak activity periods in 2025, the burn rate approached and occasionally exceeded daily issuance. During 2026's more moderate activity, the burn has been well below issuance.

The resolution of this tension requires either higher fee revenue per transaction, achieved through fee market changes that are the subject of the SIMD governance proposals, or higher overall transaction volume from genuine application usage. Neither is guaranteed. Fee market changes face governance resistance from validators who benefit from current fee distribution. Volume growth requires applications that retain users through market cycles rather than spiking during speculation and contracting during consolidation.

If fee revenue remains modest relative to issuance through 2027 and 2028, the fundamental case for SOL's value rests primarily on the expectation of future fee revenue growth, which is a different investment than owning an asset where the fundamental value is already being captured. This distinction matters for time horizon: investors with 12 to 24-month horizons may be buying future potential that the market may or may not price in on that timeline.

Solana vs Ethereum: the Relevant Comparison

The investment decision for SOL is frequently made in the context of a choice between Solana and Ethereum, the two most active smart-contract platforms by DeFi activity and developer attention. Understanding what the data shows about the relative trajectory matters more than any individual metric.

Ethereum is improving its layer-2 cost and throughput profile through a continuous upgrade schedule. The Fusaka upgrade in December 2025 reduced layer-2 settlement costs, which makes Ethereum's rollup ecosystem more competitive with Solana's native throughput advantage. As Ethereum's effective cost to end users on layer-2 approaches Solana's base layer costs, the competitive differentiation narrows.

Solana's advantage is in composability at the base layer: applications deployed on Solana can interact directly with each other in a single atomic transaction in a way that cross-layer-2 transactions on Ethereum cannot. That composability advantage is particularly valuable for high-frequency trading applications, which require multiple protocol interactions to execute within the same transaction. It is also the characteristic most difficult for Ethereum's layer-2 architecture to replicate.

Whether composability at Solana's throughput level is the dominant competitive advantage in the 2027-2029 cycle depends on what types of applications drive the most economic activity. If DeFi matures toward the high-frequency trading and payments use cases that Solana's architecture is optimised for, Solana's competitive position strengthens. If the cycle's dominant application category is something that works equally well on Ethereum's layer-2s, the competitive advantage is less relevant.

What a Position at $104 Actually Looks Like

For a trader or investor entering at $104.86, the risk-reward structure is defined by the technical levels on either side.

The 200-DMA near $85 is the primary support whose sustained loss would signal a trend reversal. A position entered at $104 with a stop below $85 accepts approximately 19% downside risk. The near-term target of $120 represents approximately 14% upside to that first resistance level. That is a 0.74:1 risk-reward ratio to the first target, which is less favourable than typical entry conditions.

The more interesting risk-reward calculation is to the 2028-2029 cycle targets in the forecast model, averaging near $239 in 2028 and $339 in 2029. From $104, reaching the 2028 average target represents 128% upside. Against the 19% downside stop, that is a 6.7:1 risk-reward ratio over a 24-month holding period. That is the calculation that justifies the position at the current level: not the near-term $120 target, but the cycle-level thesis that Solana's institutional access, staking yield, and network fundamentals support the next halving cycle's altcoin appreciation.

Conclusion

Solana is a good investment in 2026 for investors who are buying the multi-year cycle thesis rather than near-term price targets. The TPS and DeFi data show an ecosystem that survived the 2026 drawdown with meaningful user base and application depth intact, distinguishing this correction from the 2022 collapse. The staking yield, ETF access with yield pass-through, and disinflationary supply schedule create fundamentals that are stronger than at any prior point in Solana's history. The value capture question that 21Shares raised is the legitimate uncertainty: whether fee revenue will grow enough to make the burn mechanism meaningfully deflationary. That question is unanswered by current data and will likely remain open through 2027, making the investment a forward-looking thesis about network adoption rather than a present-day fundamental buy. For investors comfortable with that distinction, with position sizing that reflects the 19% downside to the trend-change stop, and with a time horizon extending to the 2028-2029 cycle window, the data supports a constructive position.