TPS Limitations

TPS limitations refer to the maximum number of transactions per second a network can handle before it becomes congested. This ceiling is determined by block size, block time, and the computational requirements for validation.

In financial markets, hitting this limit during high volatility can prevent traders from closing positions or adding margin, leading to forced liquidations. Developers must constantly optimize code and consensus to push this limit higher without sacrificing decentralization.

Scaling solutions like layer-two networks are often deployed to circumvent these base-layer constraints. Understanding these limits is vital for assessing the capacity of a platform to support complex derivative instruments.

It is a fundamental metric of performance.