Financial infrastructure needs to rethink blockchain architecture

The cryptocurrency industry has infrastructure issues that are rarely discussed directly. We need to rethink blockchain architecture because we have built our financial systems on blockchains that were not designed for finance.

I realized this the moment I started building Momentum. Most protocols are launched as independent products: DEXs, lending markets, and staking solutions, treating each as a separate tool rather than part of an interconnected system. However, this fragmentation reveals deeper architectural mismatches. The blockchain layer underneath was not built to handle the demands of finance, such as massive parallelism, composable primitives, and infrastructure that other protocols could reliably build upon.

This is not a theoretical thing. This manifests as transaction failures during peak demand periods, capital inefficiencies in liquidity markets, and an ecosystem where each protocol operates independently rather than synergistically.

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The real limitation: Blockchain is not designed for finance

When deciding where to build a DEX, the choice was obvious to me, but seemed counterintuitive to many. Everyone asked, “Why not Ethereum (ETH)?” The answer reveals everything about how I think about infrastructure.

Consider the fundamental difference in how Ethereum and Sui (SUI) process transactions. Ethereum's sequential execution model means that all transactions must be processed in sequence, creating a bottleneck under load. This was not a design bug in Ethereum. That was never the intended use case. Ethereum was built as a general-purpose computing platform.

Finance requires something different. Most financial operations are independent. If Alice exchanges tokens and Bob stakes assets, these transactions are independent of each other. Sequential processing introduces artificial congestion. Parallel processing is more than just an optimization. It's structurally necessary.

Sui was built from the ground up with parallel execution and object-centric design using the Move programming language. This architectural choice is not just about speed, it also allows completely different categories of financial products to exist at scale.

The evidence arrived sooner than we expected. In six months, our DEX scaled from zero liquidity to $500 million in daily trading volume, $1.1 billion in daily trading volume, and reached $22 billion in cumulative trading volume while onboarding 2.1 million users without significant congestion. Processing such volumes without failing transactions is not a marketing achievement. It is evidence of basic architectural soundness. Try achieving these metrics with a sequential blockchain and you'll see exactly why architecture matters.

Why infrastructure configurability is more important than individual products

There is a second, more subtle problem that I have come to realize. That means financial products need to be composable building blocks, not isolated silos.

A well-designed financial infrastructure layer should allow other protocols to be built on top of shared primitives. If every protocol has to build its own financial management, its own staking solution, its own liquidity infrastructure, the ecosystem becomes fragmented. Developers spend their time solving the same problems instead of innovating new problems. I've seen this happen repeatedly throughout the chain.

This is where most protocols fail. Once they successfully build one product, the ecosystem around it calcifies. Each new protocol essentially starts from scratch.

When building the protocol, we intentionally chose to do more than just create a DEX. We built infrastructure primitives that other protocols reasonably choose to use rather than rebuild. Our financial management solution, MSafe, currently protects hundreds of millions of people across the Move ecosystem. Not because we forced adoption, but because it solved a real problem better than the alternatives.

More protocols built on a shared infrastructure means more integration points, more configurability, and more system value for everyone. This only works if the primitives are actually good. Centralized liquidity market-making technology with aligned incentives creates capital efficiencies that cannot be achieved with traditional AMMs. Liquid staking, which generates receipt tokens with yield, simultaneously creates highly productive collateral. Reliable multi-signature treasury management reduces friction in protocol governance.

These are not nice-to-haves. These are the differences between ecosystems that compound value and ecosystems that fragment. This allows Momentum to provide the infrastructure that other protocols reasonably choose to build on rather than rebuilding themselves.

The problem with institutional capital is infrastructure, not capabilities.

Virtual currencies have always had difficulty in introducing systems. Standard explanations focus on regulatory uncertainties and UX limitations. The actual bottleneck is often much simpler. Institutions cannot use distributed infrastructure without compliance capabilities.

This is no reason to centralize. This is why we build the right layers on top of our decentralized infrastructure. Being able to offer permissioned compliance as an optional module would solve the problem without compromise by allowing institutional users to verify their identity and transact with full regulatory clarity while leaving the underlying infrastructure permissionless.

Educational institutions will not invest significant capital into a system that cannot provide regulatory audits, KYC verification, and compliance documentation. These are not features, but structural prerequisites for an organization to participate. It's not a gatekeeper. It's about acknowledging reality.

actual argument

Apart from specific protocols, what I'm claiming is: Blockchains built for general computation cannot function efficiently as financial infrastructure. Finance requires architectures specifically designed for parallel processing, composable primitives, and institutional compliance. Protocols will migrate to blockchains with these characteristics. Not because it's trendy, but because the economics of operating with better infrastructure are simply better.

This is not a “Sui is better than Ethereum” argument. Ethereum can and should continue to evolve. Layer 2 solutions are a legitimate approach. This is the argument that financial systems need to be built on a different architectural foundation than general-purpose computing platforms.

The corollary is less obvious. Once blockchain is purpose-built for finance and meaningful adoption is achieved, it becomes a natural foundation for financial innovation. Not for marketing purposes, but because other protocols have reasonably chosen to build there.

The question for the industry is not which chain will “win.” It's a matter of being willing to admit that a one-size-fits-all blockchain architecture was never the right approach, and that specialized infrastructure produces better financial results.

This realization changes everything about how protocols are built and where they are deployed. The way I think about Momentum is changing, and it should change the way I think about where we build next.

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