Blockchains Are Fast Enough—Now Onchain Markets Need Fair Execution

Blockchain capacity is no longer the whole story for onchain markets. a16z crypto says aggregate throughput across major networks has climbed from fewer than 25 transactions per second to more than 3,400 in five years, while some production systems report capacity in the tens of thousands. Its conclusion is not that blockchains are finished scaling. It is that financial applications now need something TPS alone cannot provide: reliable inclusion, predictable processing, and credible rules for transaction ordering. 4854

Why high TPS does not guarantee good execution

Throughput measures how many transactions a network can process over time. It does not tell a trader whether a particular order will be included promptly, whether it will execute in an expected position, or whether someone with privileged visibility can rearrange the order flow first. 6252

That distinction matters for market quality. If an order can be delayed, excluded, or overtaken after it is submitted, a displayed price may no longer be executable by the time the trade lands. Market makers facing that uncertainty may respond by quoting less size or wider spreads to protect against adverse selection. That is an economic implication of discretionary sequencing—not evidence that every form of MEV is harmful—but it explains why predictable execution matters as onchain markets become more consequential. 527

The sequencing problem: MEV

Maximal extractable value, or MEV, describes value that can be captured through choices about transaction inclusion and ordering. The BIS notes that validators can determine which transactions execute and when, potentially affecting market prices and opening the door to front-running and other forms of manipulation. 7

A sandwich attack is the clearest example. An attacker puts a transaction ahead of a user’s swap to move the price, then executes a second transaction after the user’s swap to capture the resulting price movement. The user’s trade can still succeed, but at a worse price. 245

The losses are not merely theoretical. One academic source cites an estimate of $174 million in Ethereum user losses from sandwich attacks over 33 months. A separate study of private transaction channels identified 3,126 victim transactions and about $409,236 in victim losses during November and December 2024. These estimates cover different periods and methods, so they should not be added together as a single total; together, they show that private submission alone does not eliminate the risk. 3935

Strong Chain Quality: reducing one proposer’s control

a16z crypto’s proposed Strong Chain Quality reframes an existing blockchain-security idea for high-throughput systems.

Traditional chain quality is roughly a long-run principle: an entity with 3% of stake should control about 3% of blockspace over time. Strong Chain Quality would apply a similar proportionality constraint within each block. In a simplified example, an entity with 3% of stake would have control over about 3% of the blockspace in every block, rather than waiting for its occasional turn as proposer to control the effective sequencing of an entire block. 51

The intended result is a set of stake-proportional “virtual lanes” inside high-bandwidth blocks. That could reduce the ability of a single selected proposer to exploit its temporary position by inserting, delaying, excluding, or reordering transactions. It is a proposed property and research direction, not a universal feature of deployed blockchains. 51

Why regulators are paying attention

The market-structure concern is not simply that MEV exists. It is that some forms of extraction can resemble conduct familiar to traditional market-abuse frameworks: front-running, selective access, or price manipulation.

The BIS has explicitly connected validators’ discretion over transaction execution and timing with the possibility of front-running and market manipulation. 7 ESMA has also noted that public transaction visibility and the time required to confirm transactions can exacerbate front-running, back-running, and sandwich-attack risk on decentralized exchanges. 5

That does not mean every ordering strategy is unlawful or that regulators have reached a single global conclusion on MEV. It does mean that protocols and infrastructure providers face growing pressure to distinguish beneficial functions—such as some arbitrage—from practices that transfer value from users through privileged sequencing control.

What Jito demonstrates on Solana

Jito’s infrastructure illustrates both the progress and the limits of today’s execution protections. Its low-latency transaction services support fast landing, revert protection, and both individual transactions and transaction bundles. 18

Its opt-in DontFront mechanism is more specific: when a transaction carries the required jitodontfront marker and is sent through Jito’s block engine, any bundle containing that transaction must place it at index zero. This prevents a searcher from inserting a transaction ahead of the protected transaction within that bundle. 1924

That is useful protection against a defined form of sandwiching. But it should not be mistaken for protocol-wide fair ordering. It depends on using the relevant infrastructure and applies to the bundle context; it does not by itself guarantee global ordering, universal inclusion, or protection from every form of censorship and information leakage. 1819

Why the issue matters for institutional markets

As financial institutions consider executing trades onchain and issuing stablecoins and tokenized assets, they need operating conditions closer to those expected in other market infrastructure: reliable access, predictable processing rules, and controls over when sensitive information becomes visible. a16z crypto argues that those guarantees must hold not only in normal conditions, but also through congestion, outages, and attacks. 48

This is the practical shift behind the throughput-to-fairness argument. A chain can be fast enough in aggregate yet still be a difficult venue for trading if participants cannot form a dependable expectation about how an order will be treated.

The hard part: improving fairness without weakening the network

There is no single, cost-free MEV fix. Private transaction channels, encrypted mempools, bundles, pre-confirmations, auctions, and changes to proposer and builder roles can each address particular risks. Encrypted-mempool designs, for example, generally seek to hide transaction contents until after transactions have been committed, reducing opportunities to trade on pending-order information. 60

But these approaches can introduce trade-offs in latency, complexity, censorship resistance, concentration, privacy, or reliance on intermediaries. Strong guarantees of inclusion and ordering must coexist with decentralized block production and efficient network performance.

The important takeaway is not that raw blockchain scaling is irrelevant. It remains necessary. But for onchain markets, capacity is increasingly only the starting point. The next test is whether networks can turn that capacity into execution that participants can trust. 4852