Disclosure: The views and opinions expressed herein are solely those of the author and do not represent the views and opinions of the crypto.news editorial.
The crypto industry has an infrastructure problem that is rarely discussed directly: we have been building financial systems on blockchains that were not designed for finance, forcing us to rethink blockchain architecture.
Summary
- General-purpose blockchains struggle with finance. Sequential execution creates bottlenecks; Financial transactions need parallel processing to scale efficiently.
- Composability drives ecosystem value. Shared infrastructure primitives allow protocols to build on each other, reducing fragmentation and enabling cost-effective, capital-efficient products.
- Institutional adoption requires infrastructure, not just features. Permission compliance, KYC and audit modules in decentralized systems are prerequisites for serious institutional participation.
I realized this at the time we started building Momentum. Most protocols are launched as isolated products – a DEX, a lending marketplace, a staking solution – treating each as a separate tool rather than part of an interconnected system. But this fragmentation reveals a deeper architectural mismatch. The underlying blockchain layer simply wasn’t built to handle what finance demands: parallel processing at scale, composable primitives, and infrastructure that other protocols can reliably build on top of.
This is not theoretical. It manifests itself in transaction failures during demand peaks, capital inefficiency in liquidity markets, and an ecosystem where each protocol operates in isolation rather than synergistically.
The real limitation: Blockchains were not designed for finance
When we were deciding where to build our 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 between how Ethereum and Sui (IUE) process transactions. Ethereum’s sequential execution model means that each transaction must be processed in order, which creates bottlenecks under load. This was not a bug in Ethereum’s design; It was never the intended use case. Ethereum was built to be a general-purpose computing platform.
Finance demands something different. Most financial operations are independent. When Alice trades tokens and Bob stakes assets, these transactions are not dependent on each other. Sequential processing creates artificial congestion. Parallel processing is not just an optimization; It is structurally necessary.
Sui was built from the ground up with parallel execution and object-centered design using the Move programming language. This architectural choice is not only faster: it allows an entirely different category of financial products to exist at scale.
The test arrived faster than we expected. In six months, our DEX scaled from zero to $500 million in liquidity and 1.1 billion dollars in daily trading volume, accumulating $22 billion in cumulative trading volume while onboarding 2.1 million users without significant congestion. Processing that kind of volume without transaction failures is not a marketing achievement; It is evidence of fundamental architectural solidity. Try achieving those metrics on a sequentially executed blockchain and you’ll see exactly why architecture matters.
Why infrastructure composability is more important than individual products
There is a second, more subtle problem that I have learned to recognize: financial products must be composable building blocks, not isolated silos.
A properly designed financial infrastructure layer should allow other protocols to rely on shared primitives. If each protocol has to build its own treasury management, its own staking solution, its own liquidity infrastructure, the ecosystem becomes fragmented. Developers spend time solving identical problems instead of innovating new ones. I’ve seen this happen repeatedly across all chains.
This is where most protocols fail. They build a product well, then the ecosystem around them calcifies. Basically, every new protocol starts from scratch.
When we created our protocol, we deliberately chose not to simply create a DEX. We build infrastructure primitives that other protocols would rationally choose to use rather than rebuild. MSafe, our treasury management solution, now protects hundreds of millions across the Move ecosystem. Not because we forced adoption, but because it solved a real problem better than the alternatives.
More protocols based on shared infrastructure mean more integration points, more composability, and greater system value for everyone. This only works if the primitives are really good. Concentrated liquidity market making technology with aligned incentives creates capital efficiency that traditional AMMs cannot match. The liquid staking that produces a yield-generating receipt token creates collateral that is simultaneously productive. Reliably functioning multi-signature treasury management reduces friction for protocol governance.
These are not nice-to-have amenities. They are the difference between an ecosystem that increases value and one that fragments. This is precisely what allows Momentum to provide infrastructure that other protocols rationally choose to leverage rather than rebuild.
The problem with institutional capital is infrastructure, not characteristics
Cryptocurrencies have always had problems with institutional adoption. The standard explanation focuses on regulatory uncertainty or UX limitations. The real bottleneck is often simpler: institutions cannot use a decentralized infrastructure that lacks compliance capabilities.
This is not a reason to centralize. It’s a reason to build the right layer on top of decentralized infrastructure. If you can offer permissions compliance as an optional module, allowing institutional users to verify their identity and negotiate with full regulatory clarity, while keeping the base infrastructure permissionless, you will solve the problem without compromise.
Institutions will not invest significant capital in systems that cannot provide regulatory audit, KYC verification or compliance documentation. These are not characteristics, they are structural prerequisites for institutional participation. That’s not control. It is recognizing reality.
The real argument
This is the claim I am making, regardless of any particular protocol: blockchains created for general computing cannot efficiently serve as financial infrastructure. Finance requires an architecture designed specifically for parallel processing, composable primitives, and institutional compliance. Protocols will migrate to blockchains with these properties, not because they are trendy, but because the economics of operating on better infrastructure are simply superior.
This is not an argument that “Sui is better than Ethereum.” Ethereum can and should continue to evolve. Layer 2 solutions are legitimate approaches. This is an argument that financial systems should be built on different architectural foundations than general-purpose computing platforms.
The corollary is less obvious: if a blockchain is built specifically for finance and achieves significant adoption, it becomes the natural foundation for financial innovation. Not because of marketing, but because other protocols rationally choose to build there.
The question for the industry is not which chain “wins.” It’s about whether we are willing to recognize that a single blockchain architecture was never the right approach, and that specialized infrastructure produces better financial results.
This understanding changes everything about how protocols should be built and where they should be deployed. It’s changing the way I think about Momentum and should change the way I think about where to build next.
