Blockchain's 14 TPS Lag Behind TradFi's 24,000 Speed Gap Stalls Adoption

Blockchain technology’s potential to disrupt traditional finance hinges on its ability to match the speed and efficiency of centralized systems, according to recent analyses. While decentralization remains a core promise of Web3, current blockchain networks struggle to compete with the sub-second transaction processing of traditional financial institutions like Visa and the NASDAQ. Ethereum, for example, processes around 14 transactions per second, compared to Visa’s 24,000, highlighting a critical gap that could delay widespread adoption [1].

The article argues that speed is an “essential component underpinning every facet of finance,” particularly in high-stakes scenarios such as arbitrage opportunities or urgent fund transfers. Traditional finance’s opaque structures and hidden fees further complicate the transition, but these flaws are unlikely to outweigh users’ preference for performance. As one analysis notes, “many users prefer centralized systems because they are faster, cheaper, and more efficient” [1]. This reality is evident in the limitations of leading blockchains: Bitcoin’s 10-minute block time and 10 transactions per second, and Ethereum’s marginal improvements, remain far behind centralized benchmarks [1].

The rise of performance-focused chains like Solana—capable of 3,000 transactions per second—signals a growing prioritization of speed over strict decentralization. However, even these advancements fall short of the scale required to rival traditional finance. Hyperliquid, a centralized platform, saw a 50% surge in trading volume in May 2025, according to DeFiLlama, underscoring the demand for faster execution [1]. Yet, critics highlight Hyperliquid’s reliance on non-composable infrastructure and limited scope, which hinder its ability to serve as a universal solution for decentralized finance (DeFi) [1].

To bridge the gap, developers are exploring hybrid approaches. Techniques such as batching transactions, using off-chain order books, and optimizing state differences aim to reduce latency and gas costs while preserving blockchain’s trustless nature. The ultimate goal, as outlined in the article, is a platform that combines the transparency of Web3 with the speed of Web2. Such a system would render debates over decentralization versus centralization obsolete, establishing a new financial standard that operates as seamlessly as the internet [1].

Analysts stress that blockchain’s adoption will depend on achieving “Web2-grade speed” without compromising openness. Projects that succeed in this balance will likely dominate the next decade of finance, as history shows users gravitate toward the fastest networks. However, until blockchain can match or exceed the performance of traditional systems, users will continue to favor the “faster rails of traditional finance” [1].

Source: [1] [title1Blockchain won’t win until it outruns TradFi] [url1https://cryptoslate.com/blockchain-wont-win-until-it-outruns-tradfi/]