Throughput

Throughput

Sovereign Assets • Layer 1s • Payment Networks

transaction processing capacity

Throughput refers to the number of transactions, operations, or data packets a blockchain network, protocol, or application can process within a specific time frame—typically measured in transactions per second (TPS). High throughput is essential for scalability, as it determines how many users and applications a network can support without congestion, delays, or high fees. Throughput is affected by block size, block time, consensus mechanism, and the implementation of scaling solutions like Layer 2 protocols and rollups.

Use Case: Ethereum’s native throughput is limited to around 15 TPS, but Layer 2 solutions like Arbitrum or Optimism increase effective throughput to thousands of TPS, enabling high-volume DeFi and gaming apps to operate smoothly.

Key Concepts:

• Layer One Protocol — The base chain whose design sets foundational throughput limits
• Layer Two Protocol — Scaling networks that boost throughput by processing transactions off-chain
• Rollups — Bundle many transactions, dramatically increasing TPS while leveraging Layer 1 security
• Sidechains — Independent networks that add parallel throughput to main chains
• Settlement Finality — The point at which increased throughput still guarantees irreversible transaction completion
• Scalability — The broader goal that throughput optimization serves
• Consensus Mechanism — Protocol design that fundamentally determines TPS limits
• Gas Price — Cost indicator that rises when throughput is exceeded

Summary: Throughput measures a network’s capacity for handling activity at scale. High throughput is vital for global adoption of blockchain applications, reducing congestion, and lowering transaction costs as Web3 grows.