Primer: Solana - A Blazing BlockchainCME Group’s newly launched Solana futures enable institutional grade access to the cryptocurrency, offering investors access to compelling relative value opportunities.
This paper provides a background to Solana in relation to other major blockchain networks and cryptocurrencies. Mint Finance will outline the execution of crypto market spread trades using CME futures in an upcoming paper.
Solana is a high-performance public blockchain launched in 2020 by Solana Labs, founded by Anatoly Yakovenko (a former Qualcomm engineer). Yakovenko first proposed Solana’s novel Proof of History (PoH) concept in 2017 as a solution to blockchain scalability. He assembled a founding team including former Qualcomm colleague Greg Fitzgerald and others and named the project after a California beach town.
Backed by early venture funding, Solana’s mainnet launched in March 2020. The vision was to enable ultra-fast, low-cost transactions for decentralized applications (e.g. DeFi, gaming), addressing limitations of Bitcoin & Ethereum in speed and fees.
Solana has grown rapidly to become one of the most used networks and amassed a market cap of USD 64 billion, making it one of the largest digital assets. What is behind the massive surge? Is it due to flip ETH as the home of DeFi?
How Does Solana’s Blockchain Rank?
While Solana’s low fees and fast transaction speeds have driven high trading volume, transaction count, and wallet growth, it still trails ETH in Total Value Locked (TVL). To achieve its high transaction throughput, Solana has made certain compromises on decentralization.
In terms of ecosystem development, Solana is seeing rapid growth. The Electric Capital 2024 developer report found Solana attracted the most new developers in 2024 – more than any other ecosystem (even Ethereum’s, despite Ethereum’s broader base).
Solana now has ~2,500 monthly active developers, second only to Ethereum’s ~8,900 (which includes many working on Layer-2s). This loyal & expanding developer base has been a key factor behind Solana’s explosive growth.
DEX Surge and Meme Coin Mania
Solana’s early growth was driven by NFTs, supported by low fees and a loyal community that made it a hub for NFT trading. These factors continued to attract users even after the NFT boom subsided. Its fast, low-cost blockchain and strong developer base have enabled the launch of many user-friendly and popular applications. More recently, Solana’s growth has been fuelled by surging decentralized exchange (DEX) volumes and a wave of meme coin minting.
By November 2024, meme coin trading accounted for an all-time high 65% of monthly DEX volume on Solana’s largest DEX, Raydium. Raydium even overtook Uniswap in monthly volume that month.
Solana’s advantages in cost and speed have been pivotal in this trend. Transaction fees on Solana are negligible and on-par with L2 chains. This cost advantage makes minting and trading low-value tokens (like meme coins) economically feasible on Solana but prohibitively expensive on Ethereum layer-1. Similarly, Solana’s block times (~0.4 seconds) and high throughput enable rapid trading. Traders can execute many rapid swaps on Solana DEXs without the delays and slippage that Ethereum’s ~12-second blocks and occasional congestion introduce. Solana’s speed and low fees thus attracted a flood of retail speculators for meme coins and high-frequency trading strategies.
Ethereum’s ecosystem still offers deeper liquidity and broader dApp selection, but Solana capitalized on specific niches (e.g. meme coins, real-time trading) where Ethereum’s costs are a barrier.
However, this explosive growth was not without turbulence. In early 2025, a “meme coin meltdown” saw activity cooling off after several scam tokens collapsed. By February 2025, Solana’s share of total on-chain DEX volume, which had topped 51% in January, retreated to 24% as some froth cleared.
Data Source: Artemis
Scandals like a fake “Libra” token (which vaporized $4.4B in market cap) and a Trump-themed token rug pull dented retail sentiment. Even so, Solana’s DEX volumes remain on par with Ethereum’s entire ecosystem (L1 + L2), a remarkable feat. VanEck’s Feb 2025 report noted that despite an 80%+ drop in new meme token launches since January, Solana DEX activity “is still holding its own – roughly matching the entire ETH ecosystem”.
In short, the meme coin mania has demonstrated Solana’s capacity to manage massive retail-driven bursts of activities that might overwhelm other chains.
Market Metrics For BTC, ETH, and SOL
Since the bottom of the bear market following the FTX collapse. Solana has delivered a stunning recovery, far outperforming both BTC and ETH, but the massive gains were partly explained by the much sharper decline following FTX.
During 2024, SOL performance moved in lockstep with BTC with both assets delivering stunning returns. However, the performance diverged sharply after Jan/2025, coinciding with the collapse in DEX trading volume. The sharp correction since has erased most of the 2024 gains while BTC has remained resilient.
Solana has, nevertheless, managed to outperform ETH which has suffered an even deeper correction over the past few months.
Data Source: TradingView
Historical volatility for all three assets shows a similar trend but differ in magnitude. SOL has the highest volatility while ETH follows second and BTC is least volatile. During spikes, the differences become exaggerated, but during lows, the values can reach similar lows.
For traders, higher volatility can be both an opportunity and a risk.
While SOL’s performance is positively correlated with both ETH and BTC, this correlation breaks frequently (more commonly with ETH) and these periods of divergence present compelling spread opportunities.
The trend for implied volatility (IV) is like HV with SOL’s IV the highest and Bitcoin’s IV the lowest. Recently, IV has started to edge up again following a decline through March.
Trading Solana and Crypto Spreads
With the launch of CME’s Solana and Micro Solana futures, investors can express views on Solana’s growth and take tactical positions that benefit from relative outperformance. Mint Finance will outline the execution of crypto market spread trades using CME futures in an upcoming paper.
CME Solana futures provide exposure to 500 SOL per futures contract and reference the CME CF Solana-Dollar Reference Rate.
CME Micro Solana futures offer a smaller notional value to create more balanced spreads and for fine-tuning exposure. The micro contract provides exposure to 25 SOL.
Additional details about the contract including margins, calendars, and specifications are available on the CME Solana product page .
MARKET DATA
CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme .
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