How Transaction Processing Speed Metric Might be Flawed
A user with the handle “@bkiepuszewski” argues that the traditional transaction processing speed (TPS) metric used to evaluate the efficiency of blockchain networks like ethereum and the BNB Chain is flawed. According to this decentralized finance (DeFi) researcher, an alternative metric called User Ops per second (UOPS) could provide a more accurate assessment of a blockchain’s utilization.
Measuring Network Utilization
Blockchain utilization measures the activity of a network, such as bitcoin or ethereum, at any given time. This metric is crucial because it indicates the adoption levels and success of a network. The UOPS metric takes into account the number of transactions processed per second or the total value locked (TVL) for smart contracts.
The average network utilization rate in ethereum, according to Etherscan data, is currently around 50%, compared to 100% in 2021. In contrast, the number of bitcoin transactions per day has almost doubled since October. This increase in transaction volume is expected when bitcoin prices rise.
The Rise of ethereum Layer-2s
Using UOPS instead of TPS provides more clarity in understanding blockchain throughput, especially with the growing use of layer-2 solutions. These solutions, such as OP Mainnet, Base, and StarkNet, bundle transactions offline before confirming them on the mainnet. As more decentralized applications (dapps) choose layer-2 solutions, relying solely on TPS for throughput calculation becomes flawed.
Developers are increasingly adopting layer-2 solutions to avoid scalability issues and enable the deployment of intensive dapps like social media platforms. For example, Friend.tech utilizes layer-2 technology. According to L2Beat, Arbitrum and OP Mainnet have significant total value locked with over $6.5 billion and $2.9 billion, respectively.
### News source: bitcoinist.com