Finance is one of the most obvious use cases for blockchains. It’s also one of the most demanding. A benefit of blockchains, often referenced in the context of financial use cases, is that they bring assets, ownership records, and execution rules into a shared system that no single counterparty controls. This does not, however, make blockchains automatically ready for the scale and constraints they’d have to contend with in global financial markets.
For years, debates around blockchain readiness focused on cost and throughput (how many transactions a chain can process per second) because financial applications can’t scale without that capacity. The conversation is changing, however, as throughput is becoming less differentiated across many production systems.
As financial institutions start executing trades onchain and issuing stablecoins and tokenized assets, they need to know whether these networks can actually handle the demands and expectations of a real financial market. This includes reliable access, predictable transaction processing rules, and control over if and when sensitive information becomes visible. Those guarantees must also hold through congestion, outages, and attacks.
Blockchain designers have worked on these issues for years. This post looks at what they’ve solved, what remains unresolved, and why blockchains are now better equipped to support financial markets.
Predictability: guarantees on inclusion and ordering
For years, capacity was an obvious bottleneck. Table-stakes issues like too few transactions, too much congestion, and too-high fees made many real-world financial use cases hard to take seriously. Without capacity, routine actions, like placing a trade or updating an order, get expensive or unreliable the second activity picks up.
This constraint has shifted over the last few years, and especially in the last cycle of infrastructure upgrades. Across the industry, aggregate blockchain throughput has grown more than 100x in five years, and some production systems can now process tens of thousands of transactions per second. This is only the beginning as current stress tests and new architectures may push these numbers even higher.
The challenge now is that throughput alone doesn’t say much about when a transaction will land. This is where predictability comes in.
Transactions need to land on schedule, and under rules participants can understand ahead of time, because finance is full of actions that are only useful within a very specific window. For everyday payments, a second of uncertainty is probably fine, but for markets, every millisecond can decide whether participants trust the venue at all. Take an onchain order book, for instance. If a trader’s cancel order lands too late, someone can trade against a stale price. Market makers price in that risk by widening spreads, which means worse prices for everyone.
In other words, predictability requires two kinds of guarantees: (1) guarantees on inclusion — or censorship resistance — and (2) guarantees on ordering.
Resilience: reliable access to execution
Even with good ordering rules, what if one actor can still control access to execution? Imagine we selected a randomly staked node worldwide to control transaction ingress into NYSE every second. Clearly these nodes could exert extreme market power over traders on the exchange.
Sequencing determines an order’s place relative to other orders, once it hits the chain, while resilience starts a step earlier. So, can a participant submit an order in the first place — and can they do so without relying on a single gatekeeper or operator whose decisions could affect price, risk, or trade outcomes?
This is why blockchain developers are moving toward stronger guarantees that emphasize immediate, timely inclusion rather than eventual inclusion. The goal is that if a valid transaction reaches the network on time, it should be included instantaneously. That is a much stronger standard than “your transaction will get in soon,” and it is what financial markets need.
Our researchers introduced the concept and measure of Strong Chain Quality, where access to the next round of execution doesn’t depend on one operator’s queue. The premise is that a blockchain can reserve portions of each block for transactions surfaced through other parts of the network, giving valid transactions more than one route in. The result is less single-operator control over who gets processed next.
The goal here is to make blockspace feel like shared infrastructure with multiple routes in, as opposed to a single queue. This requires more complicated protocols than we run in production today, but the benefits may be worth it, so participants can be confident their transactions will land even when the network is under pressure.
Ordering: rules markets can reason about
Predictability is also about how a venue decides the order of transactions. Once transactions are ready to be processed, markets need clear rules for sequencing them.
On many blockchains, transactions don’t become final one at a time. Instead, they’re gathered into batches, or “blocks,” and added to the ledger by a block builder or proposer. In many of today’s systems, that party has quite a bit of discretion over which transactions are included and in what order. This design — meant to simplify the protocol’s life — may be acceptable for some applications. But in financial markets, ordering determines who gets priority, what price someone receives, and whether execution is fair.
Moreover, if one party controls the next block, they may be able to react to transactions before everyone else. In crypto, this is often called MEV — or value obtained by including, excluding, or reordering transactions in a block, in addition to standard block rewards. MEV is often explained through examples like “sandwich” attacks, where a trader sees a pending transaction, trades ahead of it to move the price, and then trades immediately after to profit from the resulting price movement. The institutional version is simpler: whoever controls the flow can potentially make decisions based on it before anyone else can.
This starts to look a lot like the flaws of existing financial market structure, where centralized intermediaries can benefit from privileged access to information about order flow and trading intent. If onchain markets cannot provide strong guarantees around ordering and execution rules, they risk recreating the same asymmetries.
Blockchain protocol designers are working on more explicit ordering rules, primarily including deterministic rules based on priority fees and application-specific rules set by a trading venue. The exact mechanisms are still an active area of research. Still, the principle is familiar to TradFi: market participants have precise guarantees on how their transactions will be ordered and executed, similar to price-time priority offered by traditional venues.
Inclusion and ordering have to work together. A fair sequencing rule isn’t helpful if an auction bid or a liquidation can be selectively delayed before the rule is ever applied. Likewise, timely inclusion is less useful if participants can’t reason about how their transaction will be treated once it gets in.
High throughput makes onchain finance plausible. Predictable inclusion and clear ordering rules make it usable when timing matters and under real market pressure.
Privacy: protecting intent before execution
A participant’s trades can divulge what they know or intend to do. The size and direction of an order, for instance, can show whether a fund is building or unwinding its position. If this information becomes public before the order is fully executed, other traders will have a chance to move the price.
This is especially relevant onchain because many blockchains expose pending transactions before they’re finalized. So for finance, we need pre-execution privacy, even when post-execution privacy isn’t technically achievable.
The goal for today’s protocol designers is to keep transaction details private while it’s still possible for people to exploit them, and also to support a wider range of privacy models after execution. Once the trade is complete, the disclosure rules can change. A public market might publish the full record, while a bank might make it visible only to the counterparties and regulators. People who can’t see every detail should still be able to verify that the trade followed the rules.
To that end, protocol designers are exploring different types of encryption (e.g., timelock encryption and threshold encryption), which can hide transaction contents until a deadline passes or until a committee confirms that the transaction’s place in the block is final. So by the time the market can see the transaction, it should already be too late to front-run it.
Markets can be transparent without giving every participant a live preview of everyone else’s unexecuted orders. Onchain finance needs the same sort of distinction, enabling both auditability after execution and confidentiality before execution.
If blockchains are going to become core financial infrastructure, they’ll need to support markets that participants can trust.
Throughput was just the first test. Without enough capacity, onchain financial applications could never scale beyond niche use cases. Now that speed is the baseline, the harder test is how blockchains can meet the standards financial institutions already expect from market infrastructure. These include predictable execution, unambiguous priority rules, resilient access, and confidentiality before execution without sacrificing transparency after the fact.
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