Taraxa Report Reveals Blockchain Performance Overstated by 20x

On February 24, Steven Pu, co-founder of the layer-1 blockchain Taraxa, released a report challenging the often overstated performance claims of blockchain networks. The report analyzed data from 22 blockchain networks using information from Chainspect and found that the theoretical transactions per second (TPS) figures presented by these networks were overstated by an average of 20 times when compared to real-world mainnet performance.

According to the study, the discrepancy arises from lab-based metrics that do not accurately reflect the performance of blockchains under real-world conditions. In contrast to the high TPS figures claimed by many blockchains, actual performance was significantly lower when deployed on live mainnets.

Introducing a New Metric for Cost-Efficiency

To address this issue, the report introduces a new metric: TPS per dollar spent on a validator node (TPS/$). This metric aims to assess blockchain performance in terms of cost-efficiency, rather than focusing solely on raw transaction speed. When evaluating the 22 networks, the study found that the theoretical TPS was, on average, 20 times higher than what was actually observed on the mainnets. Only four networks achieved double-digit TPS/$ ratios, suggesting that many blockchains require costly hardware to maintain relatively modest transaction rates.

Pu argues that this misalignment calls into question claims of scalability and decentralization made by blockchain projects. He emphasizes the importance of using transparent, verifiable, on-chain performance metrics for a more accurate and reliable assessment of blockchain networks.

Blockchain Scalability Concerns

The findings of the Taraxa report highlight the industry’s misplaced focus on high TPS numbers, which often mislead stakeholders about the true capabilities of blockchain networks. For example, networks like Bitcoin (BTC) and Ethereum (ETH) prioritize security and decentralization over transaction speed, while newer blockchain projects tout high TPS numbers that often fail to materialize in real-world usage. The TPS/$ metric, however, could help developers and businesses better assess blockchain networks for practical use cases such as payments, supply chain tracking, and decentralized finance.

The Need for Greater Transparency

The Taraxa report serves as a call to action for greater transparency within the blockchain space. Pu, a Stanford-educated entrepreneur, advocates for the use of verifiable mainnet data instead of relying on whitepaper projections. This message comes at a time when the crypto industry is facing significant adoption hurdles, and inflated statistics could distort both investment and development decisions. In sectors like decentralized finance and supply chain management—where reliability and performance are critical—cost-efficiency metrics like TPS/$ could shift the focus toward networks that offer practical, sustainable value rather than just theoretical speeds.

In conclusion, the report issued by Taraxa sheds light on the discrepancies between claimed and actual blockchain performance. By introducing the TPS/$ metric, Pu urges the industry to move toward a more transparent, realistic approach to evaluating blockchain scalability and performance, encouraging the use of mainnet data to inform decisions moving forward.