Protocol Overhead

Protocol overhead refers to the additional data and processing time required to maintain the rules and security of a decentralized system. This includes things like consensus messages, cryptographic headers, and the logic for smart contract execution.

While necessary for decentralization and security, this overhead can reduce the effective throughput and increase latency. In the design of derivative protocols, minimizing this overhead is key to achieving performance that competes with centralized exchanges.

Engineers must carefully design the protocol to be as lean as possible without compromising on its core security or decentralization properties.