Blockchain Infrastructure Must Evolve Beyond Throughput for Onchain Finance

a16z Crypto, a prominent voice in the blockchain and cryptocurrency space, has published research highlighting the need for blockchains to move beyond throughput in order to support onchain finance. The firm argues that while blockchain speeds have improved significantly over the past five years, other infrastructure constraints are becoming increasingly important for financial markets.

a16z notes that aggregate blockchain throughput has increased more than 100-fold since 2017, with some production networks capable of processing tens of thousands of transactions per second. However, the firm emphasizes that higher transaction capacity does not necessarily address all the requirements of financial markets.

The research focuses on three key areas: predictable rules for transaction inclusion and ordering, reliable access to blockspace, and pre-trade privacy. a16z argues that financial applications need more certainty about when transactions will be included and how they will be prioritized, as well as control over when sensitive information becomes visible.

To address these concerns, the firm proposes several solutions, including deterministic priority mechanisms and application-specific ordering rules. Additionally, a16z suggests using cryptographic approaches such as timelock encryption and threshold encryption to protect pending transaction information.