Distributed Ledger Throughput

Distributed Ledger Throughput measures the volume of transactions a blockchain network can process within a specific timeframe, typically expressed as transactions per second. In the context of derivatives and high-volume trading, high throughput is essential to handle peak market activity without network congestion or excessive fees.

Low throughput can lead to significant delays in settlement and liquidation, which are detrimental to leveraged positions. Scaling solutions such as layer-two rollups or sharding are often employed to increase throughput while maintaining the security of the underlying base layer.

It is a fundamental metric for evaluating the viability of a platform for institutional-grade financial applications. Balancing throughput with security and decentralization is known as the blockchain trilemma.