đź‘Ž PS, TPS is BS

Firedancer’s 1M TPS mark set off some debate in the crypto world

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Today’s edition veers into some controversial waters. Think I’m right? Wrong? Have a good heart but am misunderstood?

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Debates flare up over blockchain TPS in testing environments

Crypto’s chattering class has been beefing over transactions per second (TPS) lately, a metric that’s often used in the abstract to demonstrate a blockchain’s throughput. Solana boasts a higher TPS than its main rival, Ethereum.

The most recent social media go-round was ignited by the news that Firedancer, a high-performance client being developed by Jump Crypto and meant to push Solana’s TPS lead even further, had entered its testnet phase. Jump chief scientist Kevin Bowers said in a Solana Breakpoint talk that Firedancer had hit 1 million TPS in synthetic testing.

A crypto VC then posted about Solana shipping a “1m tps client” while the Ethereum world was consumed in archaic debates about “whether eth is money,” and the engagement bait went down hook, line, and sinker.

Namik Muduroglu, part of the founding team for the yet-unreleased layer-2 MegaETH, posted a GitHub screenshot noting that the Solana protocol is currently limited to around 81,000 TPS at a maximum and that MegaETH’s block times would be shorter than Solana’s, meaning transactions could be processed some milliseconds faster. 

Solana folks shot back, arguing that the 81,000 TPS parameter can be changed and pointing out that MegaETH is, to paraphrase Chris Brown, hating from outside the [existent blockchain] club.

As an idea, TPS is pretty easy to grok — how many transactions can a blockchain process every second? One million is a nice, large, round number, but things get more complicated in practice.

For one, TPS is often cited aspirationally. Firedancer’s 1 million TPS came in a testing environment, without actual user transactions. Unreleased blockchains Monad and Layer N also drew media coverage for TPS numbers that came in testing. 

Solana’s own TPS is heavily affected by whether or not one includes “vote” transactions which come from validators processing blocks. To this point, developer JoĂŁo Mendonça pointed out to me that TPS can measure a blockchain’s demand and capacity. Vote transactions don’t demonstrate demand, but they do show capacity, Mendonça argued. 

This is all separate from block times, which measure how quickly new blocks are created. Solana’s block time is 400 ms, which is a figure that can get faster with better hardware, the Solana Foundation says. Muduroglo implied that MegaETH wants to push block times closer to 10 ms.

But TPS also assumes demand for transactions in the first place. Solana Foundation institutional head Nick Ducoff told me on X that higher TPS is meaningful for use cases like high-frequency trading, an algorithm-driven style of trading that can involve making tons of transactions very quickly. 

This comports with Solana’s vision for a decentralized Nasdaq — but that would require many more firms deciding they want to do such business onchain.

— Jack Kubinec

Blockworks and the Solana Foundation are hosting Solana Founders Summit at Permissionless. Join a curated group of ~60 Solana industry leaders and founders for a day of workshops and off-the-record conversations.

Raydium’s dramatic increase in trading volume over the summer was treated with some scrutiny over alleged spam trading. Now, we have some data on the subject:

According to Blockworks Research’s new Solana DEX activity tab, Raydium made up roughly 44% of DEX volume in August but 78% of volume Blockworks Research tabbed as likely spam (addresses that have moved around less than $10 in lifetime volume). That is, Raydium has a disproportionate amount of “likely spam” volume.

Raydium made up over 70% of this volume from likely spam addresses in June and July too, while accounting for roughly 60% of Solana’s DEX volume.

— Jack Kubinec

Let’s dig into some recent Solana news bits and bobs:

  • The DeFi giant formerly known as MakerDAO is weighing whether to deploy its native tokens on Solana. Such a move, as the Lightspeed team noted this week, is perhaps unsurprising — Sky co-founder Rune Christensen has long been a fan of Solana. 

  • Societe Generale’s digital asset subsidiary intends to deploy its euro-denominated (and redeemable) stablecoin on Solana. “By deploying its stablecoin EUR CoinVertible (EURCV) on Solana, SG-FORGE intends to improve the user experience on various DeFi platforms, payment solutions and other decentralized applications,” the firm said last week. 

  • Solana Labs’ GameShift is now available via Google Cloud’s Marketplace, according to a Sept. 23 blog post. GameShift is designed to help developers build Web3 games. “Game studios are already overburdened, and need solutions like GameShift that provide simplified technical and cultural interfaces to Web3,” Jack Buser, director for Games at Google Cloud, said in a statement.

— Michael McSweeney

An X interaction between Jack and Hardhat Chad, developer of Ore