Finance has long been one of the most obvious use cases for blockchains. It is also one of the hardest. In a new piece, a16z Crypto says the appeal of blockchains in finance comes from putting assets, ownership records, and execution rules into a shared system that is not controlled by a single counterparty. That does not mean blockchains are automatically ready for the scale and constraints of global financial markets.
For years, the debate centered on cost and throughput: how many transactions a public chain could process per second. Without enough performance headroom, financial applications could not scale. That discussion is now changing as throughput gaps across commercial systems narrow.
As financial institutions begin executing trades on-chain and issuing stablecoins and tokenized assets, they need to know whether those networks can meet real market requirements. According to the article, that means dependable access, predictable execution rules, and control over when sensitive information becomes visible. Those safeguards also need to keep working during congestion, outages, and attacks.
Blockchains developers have been working on these problems for years, a16z Crypto wrote. The question now is less about raw throughput by itself and more about how close blockchains are to supporting actual financial markets.
Predictability is replacing raw performance as the key benchmark
The article says performance limits were the clearest bottleneck for a long time. If transaction capacity was too low, networks became congested and fees stayed high, many real-world financial use cases could not move on-chain. During active market periods, even routine actions such as placing or canceling orders could become expensive or unreliable.
That constraint has eased over the past few years, especially through the last infrastructure upgrade cycle. Across the sector, blockchain throughput has risen sharply over five years, and some commercial networks can now process tens of thousands of transactions per second. a16z Crypto says that is only the beginning, with stress testing and new architectures still pushing those numbers higher.
But more throughput does not answer a different question: when exactly a transaction will be included on-chain. That is why predictability has become the next core issue.
In financial markets, transactions need to be confirmed within a defined time window and under rules participants know in advance. Many operations only retain value for a very narrow slice of time. A one-second delay may not matter much in a retail payment setting. In trading markets, the article says, milliseconds can determine whether participants trust the underlying infrastructure.
It uses an on-chain order book as an example. If a trader’s cancellation arrives too late, another participant can fill against a stale price. Market makers would price that risk in by widening spreads, leaving all traders with worse execution.
a16z Crypto breaks predictability into two layers:
- transaction access guarantees, or censorship resistance;
- transaction ordering guarantees.
Resilience starts with access that does not depend on a single gatekeeper
Even with well-defined ordering rules, risk remains if one actor still controls execution. The article asks readers to imagine the New York Stock Exchange with trading access determined every second by a random staked node. In that setup, those nodes would have strong power to influence market outcomes.
Ordering rules determine where a transaction sits relative to other orders after it reaches the chain. Resilience addresses an earlier step: whether a participant can get an order into the system without relying on a single operator or gatekeeper whose decision could affect pricing, risk, or the final fill.
For that reason, blockchain developers are trying to build stronger guarantees and target immediate confirmation rather than eventual confirmation. The benchmark described in the article is strict: if a compliant transaction reaches the network on time, it should be included right away. That is a much higher standard than saying a transaction will be confirmed sooner or later, and a16z Crypto argues that finance needs the stronger version.
The firm says its researchers proposed and defined a concept called strong chain quality. The goal is to prevent the next round of execution rights from being monopolized by a single operator’s queue. In practice, that means reserving part of each block for transactions submitted by other network nodes, creating multiple paths for compliant transactions to enter the chain and reducing a single operator’s control over inclusion order.
The aim, the piece says, is to make blockspace a piece of public infrastructure with multiple access lanes rather than a single queue. That takes more complicated protocol logic than current commercial systems, but a16z Crypto says the payoff justifies the effort. Even in stressed market conditions, participants should be able to trust that their transactions can still be executed.
Ordering rules need to be explicit, not left to a single block builder
Predictability also depends on how a trading venue decides which transaction goes first. When several transactions are ready for execution, the market needs a clear ordering rule.
Most blockchains do not finalize transactions one by one. They package them into blocks written to the ledger by block builders or proposers. In many systems today, those actors have broad discretion over which transactions are included and in what order. That design simplifies protocol logic and may be acceptable for some use cases. In financial markets, though, ordering affects execution priority, final price, and fairness across the trading process.
The article goes a step further. If a single actor controls the next block, it may see transaction information first and act before everyone else. In crypto, that is known as maximal extractable value, or MEV. Operators can earn extra profit on top of block rewards by selecting, excluding, or reordering transactions inside a block.
Sandwich attacks are presented as the clearest example. A trader monitors pending transactions, trades ahead to move the price, then reverses the position for profit. In an institutional trading setting, the article says, the logic is even more direct: whoever controls order flow may be able to trade on order information before anyone else.
a16z Crypto says this weakness closely resembles familiar problems in traditional finance, where centralized intermediaries profit from privileged access to order flow and trading intent. If on-chain markets cannot offer stronger guarantees around ordering and execution, they will reproduce the same information asymmetries.
Protocol designers are therefore studying clearer ordering systems, mainly in two forms:
- deterministic rules based on priority fees;
- venue-defined business rules.
The exact implementations remain in academic research, according to the article, but the basic logic is similar to traditional finance. Market participants should be able to form a clear expectation of how transactions will be ordered and executed, much like the price-time priority model used by traditional exchanges.
The piece also says access guarantees and ordering rules have to work together. If auction orders or liquidation instructions can be delayed before the ordering rule takes effect, even a fair sequencing model loses value. The reverse is also true. If users cannot predict how their transactions will be handled after inclusion, immediate confirmation becomes less meaningful.
In that framework, high throughput is only a baseline condition for on-chain finance. To operate in time-sensitive and stressed markets, blockchains also need predictable transaction access and clear sequencing rules.
Privacy matters most before a trade is complete
The article argues that order information reveals trading judgment and intent. Order size and direction can show whether a fund is building a position or exiting one. If orders are visible before full execution, other traders have an opportunity to move prices and profit.
This problem is even sharper on-chain. Many blockchains expose pending transaction pool data before final confirmation. For financial applications, a16z Crypto says pre-trade privacy is essential even if complete privacy after execution is not possible.
Markets can remain transparent without giving every participant a live view into everyone else’s unfilled orders.
The current research direction is to protect data during the window when transaction details can still be used for arbitrage, while allowing different disclosure models after execution. Once a trade is complete, disclosure can vary by market structure. Public markets may show full trade records, while interbank trades may limit access to counterparties and regulators. Third parties that cannot see every detail should still be able to verify that the transaction followed the rules from start to finish.
To get there, protocol designers are exploring several cryptographic approaches, including fully homomorphic encryption and encrypted mempools. These methods can keep transaction contents hidden until a deadline arrives or a committee confirms that the transaction’s place in the block has been finalized. By the time the market can see the trade, the window for front-running and arbitrage has already closed.
That, according to the article, is how markets can preserve transparency without exposing all unfilled orders in real time. On-chain finance needs the same split: strict protection of trading secrecy before execution, then auditability after the trade is done.
Throughput is now a starting point, not the finish line
a16z Crypto closes with a broader point. If blockchains want to become core infrastructure for financial markets, they need a trading system that market participants can trust.
Throughput was the first hurdle. Without it, on-chain finance would remain confined to niche use cases. Now that transaction speed is becoming a sector baseline, the harder test is whether blockchains can meet the maturity standards financial institutions expect from market infrastructure.
As laid out in the piece, that standard includes predictable execution, unambiguous priority rules, resilient transaction access, privacy before execution, and auditable transparency after execution.