What Financial Markets Need from Blockchains

A briefing on predictability, resilience, ordering and privacy in market-grade blockchain infrastructure

Executive Summary

Blockchains are frequently described as a natural fit for financial markets. They bring assets, ownership records and execution rules into a shared system that no single counterparty controls, which is a genuinely novel property for market infrastructure. Novelty, however, is not the same as readiness. For most of the past decade, the debate about whether blockchains were fit for financial use has centred on cost and throughput: how cheaply and how quickly a network can process transactions. That debate is now substantially settled. Aggregate blockchain throughput has grown more than one hundredfold in five years, and a number of production systems can already process tens of thousands of transactions per second.

What has not been settled is everything that sits behind the headline throughput figure. A financial market is not simply a system that processes many transactions quickly. It is a system that participants can trust to behave consistently under stress, that treats every participant's order according to rules they can verify in advance, and that protects sensitive trading intent from being exploited before it is acted upon. This briefing sets out four properties that matter once throughput stops being the binding constraint: predictability, resilience, fair ordering, and pre-execution privacy. It explains what each property means in practice, why traditional throughput metrics fail to capture it, what blockchain architects have built to address it, and what remains unresolved. It closes with a discussion of the implications for institutions and their compliance and risk functions as onchain market infrastructure moves from pilot to production.

1. Introduction: From a Capacity Problem to a Trust Problem

Finance is one of the most frequently cited use cases for blockchain technology, and also one of the most demanding. Financial market infrastructure has to satisfy expectations that were built up over more than a century of exchange regulation, clearing and settlement practice, and market abuse enforcement. Those expectations do not disappear simply because the underlying ledger is distributed rather than centralised. A blockchain that wants to support real trading activity, whether that is onchain execution of listed instruments, the issuance of stablecoins, or the tokenisation of traditional assets, has to satisfy the same underlying demands that any exchange, clearing house or settlement system has always had to satisfy.

For a long period, the most obvious barrier to meeting those demands was simply capacity. Too few transactions per second, too much congestion at busy times, and fees that spiked unpredictably made it difficult to take many real-world financial applications seriously. A market cannot function if placing an order or cancelling a stale quote becomes expensive or unreliable exactly when activity is highest, which is usually exactly when reliability matters most.

That constraint has shifted materially over the last few years, particularly through the most recent cycle of infrastructure upgrades across the industry. As throughput becomes less of a differentiator between competing networks, the more interesting and more difficult question moves up a level: even once a chain can process enough transactions, does it process them in a way that a financial market can actually rely upon? This briefing works through that question in four parts, each of which corresponds to a guarantee that institutional users of onchain markets are entitled to expect.

2. Predictability: Guarantees on Inclusion and Ordering

Throughput measures how many transactions a network can process in aggregate. It says very little about when any individual transaction will actually land, or under what rules. That distinction matters enormously in financial markets, where the value of an action is often tightly bound to a very specific window of time.

For everyday payments, a delay of a second or two is usually a minor inconvenience. In markets, a single millisecond can be the difference between a fair execution and a loss, and can determine whether participants trust a venue at all. Consider an onchain order book. If a trader submits a cancellation for a stale quote and that cancellation is delayed, another participant can trade against a price that no longer reflects the market. Market makers are rational actors: if they know that cancellations can be delayed unpredictably, they will price that risk into wider bid-offer spreads. The eventual cost of that uncertainty is borne by every participant in the market, not just the ones directly affected by any single incident.

Predictability, properly understood, is not a single property but a combination of two distinct guarantees.

2.1 Guarantees on inclusion (censorship resistance)

The first guarantee concerns whether a valid transaction will be included in the ledger at all, and within a bounded and known amount of time, regardless of who submitted it or which intermediary they used to submit it. A network that cannot offer this is vulnerable to a subtle but serious form of market manipulation: selective delay. If a party with influence over block production can choose to delay or exclude a specific participant's orders, that party effectively controls who gets to trade and when, which is a form of market power no regulated exchange would be permitted to exercise.

2.2 Guarantees on ordering

The second guarantee concerns the sequence in which included transactions are processed relative to one another. Even a network with perfect inclusion guarantees can still produce unfair outcomes if the rules governing the order of execution are opaque, discretionary, or exploitable. Ordering guarantees are addressed in more detail in section four below, because they interact closely with the phenomenon of miner or maximal extractable value, commonly referred to as MEV.

Inclusion and ordering guarantees have to be considered together, because neither is sufficient on its own. A fair ordering rule provides little protection if a bid, a cancellation, or a liquidation instruction can simply be delayed until after the rule has already been applied to everyone else. Equally, guaranteed timely inclusion offers little comfort if participants cannot reason in advance about how their transaction will actually be treated once it has landed.

3. Resilience: Reliable Access to Execution

Predictable ordering only matters once a transaction has actually reached the network. Resilience is concerned with the step before that: can a participant get their order submitted at all, and can they do so without depending on a single gatekeeper whose decisions could influence price, risk, or trading outcomes?

It is worth being concrete about why this matters. Imagine, as a thought experiment, that a single randomly selected node located anywhere in the world was given sole control over transaction ingress into a major exchange for a one-second window, on a rotating basis. Even if that control rotated fairly and predictably, the node holding it at any given moment would have real and exploitable market power over every trader attempting to interact with the exchange during that window. This is precisely the kind of structural vulnerability that blockchain architects are working to design out of production systems.

Sequencing, discussed in the previous section, determines an order's position relative to other orders once it has reached the chain. Resilience is about the step that comes before sequencing can even become relevant: whether submission itself depends on a single operator's queue or availability.

This has driven a shift in blockchain design towards architectures that emphasise immediate, timely inclusion, rather than the older and much weaker standard of eventual inclusion. The distinction is significant. "Your transaction will be included at some point" is a fundamentally different, and much weaker, commitment than "a valid transaction that reaches the network on time will be included in the very next opportunity for execution." Financial markets require something close to the latter.

One concrete research contribution in this area is the concept of Strong Chain Quality, which reframes access to the next round of execution so that it does not depend entirely on any single operator's queue. Under this approach, a blockchain reserves a portion of each block specifically for transactions that have been surfaced through other parts of the network, giving every valid transaction more than one possible route into the ledger. The practical effect is to reduce the degree of control that any single operator can exert over who gets processed next, even under conditions of network congestion, targeted denial of access, or outright attack.

The underlying goal is to make blockspace function more like genuinely shared infrastructure with multiple parallel routes in, rather than a single queue controlled by whoever happens to be producing the next block. Achieving this requires materially more complex protocol design than most production systems run today, but the benefit, participants being able to trust that their transactions will land even when the network is under stress, is arguably a precondition for treating onchain venues as serious financial infrastructure rather than experimental ones.

4. Ordering: Rules That Markets Can Reason About

Predictability is not only about whether a transaction lands. It is equally about how a venue decides the order in which transactions are processed once they are ready. On many blockchains, transactions are not finalised individually. Instead, they are gathered into batches, generally referred to as blocks, and appended to the ledger by whichever party is acting as block builder or proposer for that round.

In many of today's systems, that party retains considerable discretion over which transactions to include and in what sequence. This design choice was often made for reasons of protocol simplicity, and it may be entirely acceptable for many non-financial applications. In financial markets, however, ordering is not a cosmetic detail. It determines who receives priority, what price a given participant actually achieves, and whether execution can reasonably be described as fair.

4.1 Maximal extractable value (MEV)

A block builder or proposer with discretion over ordering may also be able to react to transactions before any other participant sees them. In the crypto industry, the value that can be extracted this way is generally referred to as MEV, meaning value obtained by including, excluding, or reordering transactions within a block, over and above the standard rewards a validator or miner earns for producing that block.

MEV is most commonly illustrated through the so-called sandwich attack: a party observes a pending transaction in the public mempool, submits a trade ahead of it to move the price in their favour, allows the original transaction to execute at the now-worse price, and then closes out the position immediately afterwards to capture the difference. The retail version of this problem is well documented. The institutional version is conceptually simpler, if anything: whoever effectively controls the flow of pending transactions can make decisions based on that information before anyone else has the opportunity to do so.

This should sound familiar to anyone with a background in traditional market structure. It closely resembles longstanding concerns about centralised intermediaries benefiting from privileged access to information about client order flow and trading intent, concerns that have shaped decades of market conduct regulation in traditional venues. If onchain markets cannot offer credible, verifiable guarantees around ordering and execution, they risk simply reconstructing the same asymmetries that regulators have spent years trying to address in traditional finance, only without the accompanying regulatory architecture.

4.2 Emerging ordering rules

Blockchain protocol designers are increasingly working on more explicit and less discretionary ordering rules. Two broad approaches dominate current research and deployment: deterministic rules based on priority fees, and application-specific rules set directly by a trading venue operating on top of the base chain. The precise mechanisms remain an active area of research, but the underlying principle will be familiar to anyone from a traditional markets background: participants need precise, verifiable guarantees about how their transactions will be ordered and executed, comparable in spirit to the price-time priority rules that have long governed execution on regulated exchanges.

As with resilience, the point of these rules is not merely technical elegance. It is to give market participants something they can actually reason about and price into their trading strategies in advance, rather than a black box that happens to produce outcomes after the fact.

Taken together, high throughput is what makes onchain finance plausible in the first place: without sufficient capacity, financial applications cannot scale beyond niche use cases. Predictable inclusion and clear, verifiable ordering rules are what make that same infrastructure genuinely usable once timing matters and once real market pressure is applied to the system.

5. Privacy: Protecting Intent Before Execution

A participant's trading activity can reveal a great deal about what they know or what they intend to do next. The size and direction of an order can, for example, signal whether a fund is building or unwinding a position. If that information becomes visible before the order has been fully executed, other market participants gain the opportunity to trade ahead of it and move the price, to the direct detriment of the original party.

This issue is particularly acute onchain, because many blockchains expose pending transactions publicly before they are finalised, through a visible mempool. For financial applications, this makes pre-execution privacy essential, even in situations where full post-execution privacy is neither technically achievable nor, in most cases, desirable from a market integrity or regulatory perspective.

5.1 What good privacy design looks like

The objective for protocol designers is twofold: to keep transaction details confidential for exactly as long as they remain exploitable, and to support a range of different disclosure models once execution has actually occurred. Once a trade is complete, the appropriate disclosure regime can reasonably change depending on context. A public market might publish the full record for transparency and price discovery purposes. A bank or other regulated institution, by contrast, might restrict visibility to the counterparties directly involved and to relevant regulators. Crucially, participants who cannot see every detail of a transaction should nonetheless be able to verify, cryptographically, that the transaction followed the applicable rules. This is where techniques such as zero-knowledge proofs become relevant, allowing a party to prove compliance with a rule set without revealing the underlying data that demonstrates that compliance.

5.2 Techniques in use and under development

To achieve this balance, protocol designers are exploring several categories of encryption. Timelock encryption keeps transaction contents hidden until a predetermined deadline has passed. Threshold encryption relies on a distributed committee to jointly confirm that a transaction's place in the block has already been finalised before its contents are revealed. In both cases, the design goal is the same: by the time the wider market is able to see the transaction, it should already be too late for anyone to profitably front-run it.

It is worth being precise about the limits of what this achieves. These techniques are aimed squarely at pre-execution privacy, that is, concealing intent for the narrow window during which concealment prevents exploitation. They are not intended, and should not be understood, as a general mechanism for permanent transaction secrecy, which would in any case sit uneasily with the transparency and audit requirements that apply to regulated financial activity.

Markets have always been able to combine transparency with discretion. A traditional exchange does not give every participant a live, continuous preview of every other participant's unexecuted resting orders, even though the exchange itself, and its regulators, retain full visibility for surveillance purposes. Onchain finance needs an equivalent distinction: genuine auditability after execution, combined with genuine confidentiality before it.

6. Bringing the Four Properties Together

None of predictability, resilience, fair ordering, or pre-execution privacy is sufficient on its own. A network can offer excellent throughput and still fail a market that depends on split-second timing. It can offer fast, predictable inclusion and still be gamed through opaque ordering rules. It can offer fair ordering and still leak trading intent through a transparent mempool before execution has occurred. Market-grade infrastructure requires all four properties to hold simultaneously, and, critically, to keep holding under conditions of congestion, partial outage, and active attack, since these are precisely the conditions under which weaknesses in any one property tend to surface.

7. Implications for Institutions, Compliance and Risk Functions

For institutions evaluating onchain execution, stablecoin issuance, or tokenised asset infrastructure, the four properties set out above translate directly into practical due diligence questions that go well beyond the throughput figures typically quoted in marketing material.

•        Inclusion and ordering: does the venue or protocol provide verifiable, documented guarantees on transaction inclusion and sequencing, or are these left to the discretion of whoever happens to be producing blocks at a given moment?

•        Resilience: does execution access depend on a single operator, sequencer, or gatekeeper, and what happens to market access during periods of congestion, outage, or targeted disruption?

•        MEV exposure: what mechanisms, if any, exist to limit extractable value from ordering discretion, and how would a sandwich-style attack against an institutional order be detected and evidenced?

•        Pre-execution privacy: is trading intent visible in a public mempool prior to finalisation, and if so, what mitigations, such as timelock or threshold encryption, are available or planned?

•        Post-execution transparency: what disclosure model applies once a trade is complete, and does it satisfy the audit, surveillance, and reporting obligations that apply to the institution's regulated activities?

These questions map closely onto obligations that compliance and risk functions already apply to traditional trading venues and execution arrangements, including best execution analysis, market abuse surveillance, and operational resilience assessment. The practical difference is that, for most onchain venues, the answers currently have to be sought directly from protocol documentation and independent research rather than from an established regulatory rulebook, since supervisory frameworks for onchain market infrastructure remain, in most jurisdictions, at a relatively early stage of development. Institutions moving meaningful volume onto these systems should expect to document their own assessment of each of the four properties as part of onboarding and ongoing due diligence, rather than relying solely on a venue's own representations.

Conclusion and Outlook

Throughput was only the first test that blockchain infrastructure had to pass on the way to becoming credible financial market infrastructure. Without sufficient capacity, onchain financial applications could never have scaled beyond niche, low-stakes use cases, and for a long period that limitation was the dominant story. That story is now substantially resolved across a meaningful share of production systems.

The harder test that follows is whether blockchains can meet the fuller set of standards that financial institutions already expect, implicitly or explicitly, from any market infrastructure they rely upon: predictable execution, unambiguous priority rules, resilient access that does not depend on a single point of control, and confidentiality before execution that does not come at the cost of transparency afterwards. Blockchain designers have made genuine, measurable progress on each of these fronts over recent years, through concepts such as Strong Chain Quality, more explicit and deterministic ordering rules, and timelock and threshold encryption schemes for pre-execution privacy.

Considerable work remains, particularly in standardising these guarantees across networks, in making them verifiable by third parties rather than merely asserted by protocol developers, and in building the supervisory and audit tooling that regulators and institutional risk functions will need in order to place real confidence in onchain markets at scale. As that work continues, the institutions best placed to benefit will be those that understand these four properties well enough to interrogate them directly, rather than treating high throughput figures as a proxy for readiness.

Glossary of Key Terms

•        Throughput: the number of transactions a blockchain network can process per second.

•        Predictability: the combined guarantee that a valid transaction will be included within a known timeframe and processed according to rules known in advance.

•        Censorship resistance: the guarantee that a valid transaction cannot be selectively excluded or delayed by a party with influence over block production.

•        Resilience: the reliability of access to submit a transaction for execution, independent of any single gatekeeper or operator.

•        Sequencer: the party or system responsible for ordering transactions within a block or batch before they are finalised.

•        Strong Chain Quality: a design principle under which portions of each block are reserved for transactions surfaced through routes other than a single operator's queue, reducing single-party control over inclusion.

•        MEV (maximal extractable value): value obtained by a block producer through the inclusion, exclusion, or reordering of transactions, beyond standard block rewards.

•        Sandwich attack: a form of MEV extraction in which a party trades immediately before and after a victim's pending transaction to profit from the price movement it causes.

•        Mempool: the public pool of pending, not-yet-finalised transactions visible on many blockchains before inclusion in a block.

•        Timelock encryption: encryption that keeps transaction contents hidden until a predetermined deadline has passed.

•        Threshold encryption: encryption requiring agreement from a distributed committee before contents are revealed, typically once a transaction's position in a block is final.

•        Pre-execution privacy: confidentiality of transaction details for the period during which disclosure could be exploited by other participants.

•        Post-execution transparency: disclosure of transaction details, to varying audiences, once execution is complete.

DISCLAIMER

Nothing in this report constitutes legal advice, financial advice, investment advice, or a recommendation to adopt, implement, or refrain from any particular course of action. Readers should not rely on this report as a substitute for independent legal, regulatory, tax, financial, or technical advice tailored to their specific circumstances and jurisdiction. We Provide Solutions Ltd accepts no liability for any loss, damage, or consequence arising directly or indirectly from reliance on the contents of this report.

The regulatory landscape for stablecoins and digital assets is evolving rapidly across all jurisdictions referenced herein. Whilst reasonable care has been taken to reflect the state of regulation, legislation, and market practice as at May 2026, this report does not purport to be a comprehensive or definitive statement of the law or regulatory position in any jurisdiction. It may not reflect developments occurring after the date of publication. Readers operating in regulated activities should conduct their own legal and compliance review and seek appropriate professional advice.

References to specific legislation, regulatory proposals, market data, and third-party products or services are included for illustrative and contextual purposes only. The inclusion of any such reference does not constitute endorsement, recommendation, or verification of accuracy. Market data and transaction volume figures are drawn from publicly available sources and are subject to revision.

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This document is produced for informational and advisory purposes. It does not constitute legal, financial, or insurance advice. Readers should seek independent professional guidance appropriate to their specific circumstances and sector.

Date of Publication: September 4th, 2026

Eric Williamson, Director of Compliance and Risk

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