Key Points
- Blockchain networks often overstate their transaction-per-second (TPS) capabilities, according to a report by Taraxa co-founder Steven Pu.
- A new metric, TPS per dollar spent on a validator node (TPS/$), could better measure blockchain cost-efficiency.
Steven Pu, the co-founder of Taraxa, a layer-1 blockchain, recently published a report revealing a significant discrepancy between the claimed and actual performance of blockchain networks.
Overstated Blockchain Performance
Pu’s report, based on data from Chainspect, analyzed 22 blockchain networks and found that the theoretical transactions per second (TPS) are typically exaggerated by 20 times compared to actual results. The report suggests that this discrepancy is primarily due to lab-based metrics that do not reflect the performance of live mainnets.
The study introduces a new metric, TPS per dollar spent on a validator node (TPS/$), aiming to evaluate cost-efficiency rather than just raw speed. The report found that across the 22 chains analyzed, the theoretical TPS was on average 20 times higher than the observed mainnet performance. Only four networks achieved double-digit TPS/$ ratios.
Blockchain Scalability and Decentralization Challenged
According to Pu, these findings indicate that many blockchains require expensive hardware for modest transaction rates, casting doubts on claims of scalability and decentralization. The study recommends the use of transparent, verifiable, on-chain performance metrics.
The report suggests that the industry’s focus on high TPS can mislead stakeholders. For instance, Bitcoin (BTC) and Ethereum (ETH) prioritize security over speed, while newer chains often boast large numbers that rarely materialize. The TPS/$ metric could potentially change how developers assess networks for practical applications like payments or supply chain tracking.
Call for Transparency in Blockchain Performance
Taraxa, a proof-of-stake layer-1 blockchain focused on audit logging, views these findings as a wake-up call for the industry. Pu, a Stanford-educated entrepreneur, advocates for reliance on verifiable mainnet data rather than whitepaper hype.
As the crypto space grapples with adoption challenges, inflated statistics could potentially distort investment and development decisions, especially in decentralized finance and supply chain use cases that require reliable performance. Pu suggests that cost-efficiency metrics like TPS/$ could redefine how blockchain sustainability is evaluated, shifting focus toward networks that deliver practical value rather than just high theoretical speeds.