As a seasoned analyst with over two decades of experience in the tech and finance industries, I find Justin Bons’ critique of Solana (SOL) and Cardano (ADA) to be both insightful and alarming. With my extensive background in understanding the intricacies of blockchain technology and its performance metrics, I can attest to the fact that Bons’ concerns are well-founded.
Justin Bons, the founder and Chief Investment Officer of Cyber Capital – Europe‘s oldest cryptocurrency fund, recently voiced his worries on platform X about potentially deceptive transactions per second (TPS) figures being presented by Solana (SOL) and Cardano (ADA). In a series of posts, Bons contends that these networks are disseminating misleading data that diverges significantly from the norms within the industry.
In my analysis, I’ve identified that the primary culprits distorting ‘true’ Transactions Per Second (TPS) metrics are Solana (SOL) and Cardano (ADA). To be precise, SOL presents a misleading picture by approximately 6.5 times, while ADA inflates its TPS figure by an astonishing 26.5 times! Both platforms, in my opinion, are falling short by disregarding established industry standards for TPS, as initially pointed out by Bons.
Cardano And Solana: Real Numbers
Bons clarifies that while Solana is said to have a theoretical maximum transactions per second (TPS) of 65,000, this number is not an accurate representation of its actual capabilities. He provides a breakdown of the calculation using the network’s compute limit per block, which is 48 million Compute Units (CUs). Considering each basic transaction costs around 450 CUs and blocks occur every 0.4 seconds, the theoretical TPS would initially seem to be about 266,000. However, Bons points out that cryptographic constraints, particularly the EDDSA verification process, greatly reduce this number. The real limiting factor brings the practical maximum down to around 50,000 TPS.
In his critique of Cardano, Bons points out that while the network boasts a maximum theoretical transactions per second (TPS) rate of 477, this number is significantly higher than the realistic figure derived from its actual block and transaction size configuration. With each block containing 90,112 bytes and each transaction consuming approximately 250 bytes, and considering a 20-second block time, the network’s actual TPS comes out to be around 18. Bons underscores that this discrepancy between theoretical highs and practical capacity is evident, stating, “The reality is much more modest compared to the lofty figures often cited.”
In the ongoing debate about Transaction Processing System (TPS), Bons raises concerns about both networks’ methods for determining transaction throughput. “ADA states it can handle 26 times more than what’s feasible, compared to SOL‘s 6 times. This is due to ADA considering multiple outputs as separate transactions! Most other chains can group transactions together without incurring extra costs. However, none of them seem to take this into account when calculating transactions per second (TPS)” Bons contends.
He points out that it’s deceptive to consider multiple outputs from a single transaction as distinct transactions, because this inflates the number of Transactions Per Second (TPS). However, he notes that most other chains don’t operate this way. As a result, he suggests introducing a new metric called Outputs Per Second (OPS), which, in his opinion, offers a more reliable representation of a network’s capacity.
Similarly to Bons, he reinforces his point using tangible data from network activity. He points out that SOL currently handles 739 transactions per second (TPS), while ADA manages only 0.4 TPS in terms of actual transactions processed. This highlights a significant gap between advertised capabilities and real-world efficiency.
Additionally, the researcher discusses the wider consequences of these inconsistencies. He proposes that inflated Transaction Processing Speed (TPS) figures not only confuse investors but might also slow down the widespread use of these platforms. As he puts it, inaccurate TPS data can discourage new users and developers from adopting these platforms because of mistrust or unrealistic assumptions about the network’s capacity.
Bon’s assessment on Cardano is harsh: “In reality, there isn’t much practical use of ADA. The TPS (Transactions Per Second) figure reflects this, as most platforms surpass ADA’s usage currently. Adoption waves have left ADA behind for this reason. As a critic, I am trying to help save a large community from becoming increasingly outdated.”
He concludes his critique with a call to the blockchain community for higher standards of transparency and accuracy in how performance metrics are reported. “What matters is having a consistent & comparable TPS metric across all platforms to aid investors and users in making informed decisions,” Bons asserts.
At press time, Cardano traded at $0.3335.
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2024-08-19 12:12