Blockchain's Speed Myth: 75% Overestimated

New Study Reveals Blockchain Throughput Overestimated by 75%

Blockchain technology has long been praised for its potential to revolutionize various industries, with one of its key advantages being its high transaction processing speed. However, a recent study by Taraxa, a Layer-1 blockchain, has challenged this perception by revealing that many leading blockchain projects have dramatically overestimated their throughput.

The study found that major blockchain networks like Sonic, Solana, and Aptos have a significant gap between their theoretical TPS (transaction per second) and the actual max TPS on the mainnet. This suggests a massive overestimation of network efficiency and speed for these networks.

Taraxa conducted an extensive analysis of several leading blockchains, aiming to observe how the most 'bullish' claims compare to regular operating conditions. The study wished to assess these real-world conditions through a metric called "TPS per dollar," comparing a blockchain's transactions per second to the actual cost of running a validator node.

The results of this test revealed extremely high exaggeration. Sonic reported blockchain throughput over 100x its actual capabilities, but the industry average was 20x. The L1 blockchain space is full of fierce competition, providing a clear incentive for this systematic inflation.

“Our research also shows that many networks require expensive hardware just to achieve modest transaction rates, which is neither technically impressive nor decentralized. By focusing on verifiable data from live networks, we can shift the conversation toward meaningful performance metrics,” said Steven Pu, co-founder of Taraxa.

Comparing TPS to dollar costs also provided interesting data. Solana had the highest costs by far, but it used these resources efficiently to maintain a high blockchain throughput. Taraxa also claimed that it had the best ratio in the entire industry by wide margins, which may impact its reasons for conducting the study and using this metric.

Regardless of the firm's desire to market its own capabilities, blockchain throughput estimations seem heavily inflated across the whole industry. Taraxa has been analyzing several crucial Web3 sectors, such as the AI industry, and its results seem valuable. Hopefully, some hard data here will encourage more realistic reporting from these projects.