TPS (Transactions Per Second) is a measure of the number of transactions a network can process in one second. TPS can tell us how many people are using or can use the network at any given time. The TPS metric assumes that one transaction transfers value between one sender and one receiver. However, it has one catch. This assumption is not valid for the blockchain industry. Cardano and many other networks can send multiple assets to multiple receivers in a single transaction. Such transactions are commonly seen in DEXs, for example. Centralized exchanges can submit a single transaction for all withdrawals at a given time. Let’s explain why the TPS metric should be used very carefully and should rather be replaced in the case of blockchain networks.
TLDR
- Transactions consisting of many financial operations are cheaper and smaller in size.
- The TPS metric is unable to provide data on the number of recipients who received funds through the transaction.
- It would be better to measure something like the number of recipient addresses per second.
- In the future, it will be more efficient for blockchain networks to transmit large transactions with multiple operations than single transactions.
This article was prepared by Cardanians with support from Cexplorer.
Read the article: https://cexplorer.io/article/cardano-makes-tps-metric-obsolete