Opinion: Maxim Legg, founder and CEO of Pangaea
The blockchain industry is facing a crisis of its own production. While celebrating the theoretical transaction speed and decentralization of advertising, data infrastructure is firmly rooted in 1970s technology. If 20 seconds load time destroys a Web2 app, why do you solve it in Web3?
With 53% of users abandoning their website after just 3 seconds of load time, the industry accepting these delays is an existential threat to recruitment.
Slow transactions are more than just a user experience issue. High-performance chains like APTOS can do thousands of transactions per second. However, we are trying to access our data through “Frankenstein Indensers.” This comes from tools like Postgres and Kafka that are not designed for the unique requirements of blockchain.
The hidden costs of technical debt
The results go far beyond simple delays. Current indexing solutions development teams build custom infrastructures (consuming up to 90% of their development resources) and force an impossible choice to accept the strict limits of existing tools. A performance paradox is created. The faster the blockchain, the more bottlenecks become data infrastructure.
In real terms, when market makers need to carry out cross-chain arbitrage trading, they are essentially fighting their own infrastructure, in addition to competing with other traders. Spending every millisecond on the ballot and waiting for a state update represents missed opportunities and loss of revenue.
This is no longer theoretical. Major trading companies currently operate hundreds of nodes to maintain competitive reaction times. Infrastructure bottlenecks become a critical failure point when the market demands peak performance.
Traditional automated market makers may work with low-capacity token pairs, but they are essentially insufficient for facility-scale trading.
Most blockchain indexers today are better described as data aggregators that build a simplified view of chain states that work in basic use cases but collapse under severe loads. This approach may have been sufficient for first-generation debt applications, but is completely insufficient when dealing with real-time state changes across multiple high-performance chains.
Rethinking the data architecture
Solutions require a fundamental rethinking of how blockchain data is processed. Instead of centralizing access through traditional database architectures, next-generation systems need to push data directly to the user, allowing local processing for true low latency performance. All data points need a verifiable source to ensure reliability while reducing operational risks through time stamps and proofs.
Basic changes are underway. Complex financial products like derivatives become on-chain possibilities with faster blockchain and reduced gasoline charges. Additionally, derivatives are currently used to find price discoveries that occur in centralized exchanges. As chains get faster and cheaper, derivative protocols become a major location for price discovery.
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This migration requires infrastructure that can deliver data “in a flash” between 100 and 150 milliseconds. This is not arbitrary. This is a threshold that allows people to notice delays in perception. The slower one fundamentally limits what is possible with decentralized finance.
Immediate convergence of market power
The current model of excessive node polling and inconsistent latency profiles does not scale due to serious financial applications. We’ve already seen this as key trading companies are building more and more complex custom solutions. This is a clear signal that existing infrastructure is not meeting the needs of the market.
Due to lower gas prices, faster blockchains with sophisticated financial products are the ability to stream state changes in real time to market efficiency. Current models that aggregate data using a delay of a few seconds fundamentally limit what is possible in distributed finance.
The new blockchain is pushing data throughput to an unprecedented level. Create a Ferrari engine connected to the bike wheel without matching data infrastructure advances. All powers are not capable of being used effectively.
Essentials of change
The market forces this change. Those who fail to adapt are increasingly irrelevant in an ecosystem where real-time data access is not just a luxury, but a fundamental need for participation.
Opinion: Maxim Legg, founder and CEO of Pangaea
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
