Financial infrastructure requires a rethink of blockchain architecture

The crypto industry has an infrastructure problem that is rarely discussed directly: we have financial systems built on blockchains that were not designed for finance, which requires us to rethink blockchain architecture.

I noticed this the moment we started building Momentum. Most protocols are launched as isolated products, a DEX, a credit market, a staking solution, each treated as a separate tool rather than part of an interconnected system. But this fragmentation reveals a deeper architectural mismatch. The underlying blockchain layer is simply not built to meet the demands of the financial world: parallel processing at scale, composable primitives, and infrastructure that other protocols can reliably build upon.

This is not theoretical. It manifests in trade failures during peak demand, capital inefficiency in liquidity markets, and an ecosystem where each protocol operates in isolation rather than synergistically.

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The real limitation: Blockchains are not designed for financial purposes

When we decided 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 the way Ethereum and Sui (SUI) process transactions. Ethereum’s sequential execution model means that each transaction must be processed in the correct order, creating bottlenecks under load. This wasn’t a bug in Ethereum’s design; it was never the intended use case. Ethereum was built as a general-purpose computing platform.

Finances require something different. Most financial operations are independent. When Alice exchanges 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-centric design using the Move programming language. This architectural choice is not only faster, but also makes it possible to realize a completely different category of financial products on a large scale.

The proof came sooner than we expected. In six months, our DEX has scaled from zero to $500 million in liquidity and $1.1 billion in daily trading volume, building $22 billion in cumulative trading volume while allowing 2.1 million users without significant congestion. Processing that kind of volume without transaction errors is not a marketing achievement; it is a testament to basic architectural soundness. Try to achieve these metrics on a sequentially executing blockchain and you’ll see exactly why the architecture matters.

Why infrastructure configurability is more important than individual products

There is a second, more subtle problem that I have learned to recognize: financial products should be composable building blocks, not isolated silos.

A well-designed financial infrastructure layer should allow other protocols to build on shared primitives. If each protocol has to build its own treasury management, its own staking solution, its own liquidity infrastructure, the ecosystem fragments. Developers spend time solving identical problems instead of innovating new ones. I have seen this happen repeatedly in chains.

This is where most protocols fail. They build one product well, then the ecosystem around them calcifies. Each new protocol essentially starts from scratch.

When we built our protocol, we consciously decided not to just create a DEX. We’ve built infrastructure primitives that other protocols would want to rationally use instead of rebuilding. 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 building on shared infrastructure mean more integration points, more configurability, and higher system value for everyone. This only works if the primitives are actually good. Concentrated liquidity market-making technology with aligned incentives creates capital efficiencies that traditional AMMs cannot match. Liquid staking that produces a yield-bearing receipt creates collateral that is at the same time productive. Multi-signature treasury management that works reliably reduces friction in protocol management.

These are not pleasant comforts. They are the difference between an ecosystem that brings together value and an ecosystem that fragments. This is precisely what allows Momentum to provide infrastructure that other protocols rationally choose to build on rather than rebuild themselves.

The institutional capital problem is the infrastructure, not the functionalities

Crypto has always struggled with institutional adoption. The standard statement focuses on regulatory uncertainty or UX limitations. The real bottleneck is often simpler: institutions cannot use a decentralized infrastructure that does not have compliance capabilities.

This is no reason to centralize. It is a reason to build the right layer on top of the decentralized infrastructure. If you can offer permissioned compliance as an optional module and let institutional users verify their identity and trading with complete regulatory clarity, while keeping the core infrastructure permission-free, you solve the problem without compromise.

Institutions will not commit serious capital to systems that cannot provide regulatory audits, KYC verification or compliance documentation. These are not characteristics, they are structural conditions for institutional participation. That’s not a gatekeeper. It is recognizing reality.

The actual argument

Here’s the claim I’m making, regardless of any particular protocol: Blockchains built for general purpose computation cannot efficiently serve as financial infrastructure. Finance requires architecture specifically designed for parallel processing, composable primitives, and institutional compliance. Protocols will migrate to blockchains with these features – not because they are trendy, but because the economics of running 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 to this is less obvious: if a blockchain is purpose-built for the financial sector and achieves meaningful adoption, it becomes the natural foundation for financial innovation. Not because of marketing, but because other protocols rationally choose to build in there.

The question for the sector is not which chain ‘wins’. What matters is whether we are willing to acknowledge that one-size-fits-all blockchain architecture was never the right approach, and that specialized infrastructure delivers better financial outcomes.

That realization changes everything about how protocols should be built and where they should be deployed. It changes the way I think about Momentum, and it should change how you think about where to build next.

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