Venture capital firm a16z crypto argued in a September 3 analysis that raw transaction speed is no longer the main test for blockchains seeking to serve global financial markets. While aggregate throughput across major networks has increased more than 100 times in five years—from below 25 transactions per second to more than 3,400—a16z says institutional trading requires predictable and censorship-resistant inclusion, transparent ordering rules, and pre-execution privacy.
According to the firm, high throughput alone does not tell a trader when a transaction will actually be processed. In an on-chain order book, a cancellation that arrives too late can allow arbitrageurs to trade against stale prices, forcing market makers to widen spreads and worsening liquidity for all participants. A16z researchers propose the concept of Strong Chain Quality, reserving portions of each block for transactions submitted through multiple routes to limit any single operator’s control over access to execution.
The analysis also highlights privacy as a structural condition. When pending transactions are visible before confirmation, an order’s size and direction can reveal a fund’s intent and enable front-running. The document explores timelock encryption and threshold encryption as ways to keep transaction contents encrypted until their place in a block is confirmed, making front-running technically unfeasible once ordering is fixed.
This debate is linked to MEV concerns. a16z cites prior warnings from the Bank of International Settlements in June 2022 and IOSCO’s December 2023 DeFi policy recommendations. A September 2026 fair-ordering paper cited more than $686 million in cumulative MEV-related value extracted from Ethereum users. The analysis also notes Solana’s progress: Jito Labs CEO Lucas Bruder said malicious extraction now represents a very small fraction of blockspace activity after the network adopted more efficient ordering, private routing, and confidential execution.
For institutions coming onchain, a16z says only chains that can provide fairness and efficiency of execution under stress are likely to attract institutional order flow and deep liquidity, while best order execution mechanisms remain a work in progress.
