Infrastructure for a Massively Onchain Future

The internet has revolutionized the way we communicate, interact, and transact with each other. As the internet became more accessible and wide-reaching, digital communications, media, and content exploded to meet user demand. Now, massive amounts of data are created, shared, and consumed around the world and around the clock as the internet provides the foundation for new industries and business models.

However, our financial infrastructure has failed to keep pace with the internet’s speed of technical advancement. While credit cards and real-time payment systems represent significant updates to our retail and wholesale payments infrastructure, their underlying technology is now decades-old. Today’s consumers continue to experience delayed settlement, lack of transparency, and high fees as only marginal improvements to these systems have occurred since their launch. Reliant on dated infrastructure, online payments remain imperfect and limited in functionality.

Blockchain technology and cryptocurrencies have demonstrated the potential to deliver our financial infrastructure a much needed upgrade. Since the release of Satoshi Nakamoto’s famous Bitcoin whitepaper in 2008, the cryptocurrency market has soared to over $2 trillion with tens of billions of dollars worth of assets being transferred on blockchains every day. Smart contracts, software that securely self-executes transactions based on predefined conditions, have demonstrated how automated and programmatic transactions drive efficiency in existing systems and unlock new capabilities beyond those seen in traditional finance.

While these solutions have the potential to upgrade our dated payment systems, current technology falls short in two key areas:

First, while they have demonstrated the power and potential of smart contract execution environments, conventional blockchain architectures don’t support the transaction volume required for mass adoption. Since these platforms assume that every transaction in the network must be placed into a global order, they force all transactions through a single non-parallelizable consensus process. This compromises scalability, increases computational costs, and drags down settlement speed.

Second, a divide remains between data stored offchain, as in traditional finance, and data stored onchain, as in crypto-native ecosystems. While there are ongoing efforts to bridge this gap, interoperability issues between networks and data sources remain as organizations try to solve control and privacy concerns.

To usher in the next generation of financial and payments infrastructure, both throughput bottlenecks and the ability for onchain data to seamlessly interface with Web2 data must be addressed.

Just as email, chat, and streaming have become ubiquitous aspects of our lives, the future of money demands that transferring value is user-friendly, low-cost, secure, and native to the open internet. By making money move as quickly and cheaply as data, individuals and businesses will be able to deploy new business models that have the power to transform our online experiences.

Realizing this future will require new and better technology. For the onchain economy to be as accessible as today’s internet, it must be powered by infrastructure that is massively scalable, extremely fast, and computationally efficient.

Industrial-grade scale: To realize smart contract execution at scale, transaction volumes must far exceed the capacity of current blockchain systems. We believe that user demand, not technical limitations, should determine a platform’s capacity. Next-gen infrastructure must be able to support tens or hundreds of millions of transactions in parallel, especially as transaction fees decrease and unlock new unseen demand for low-value payments.

Real-time settlement: The internet has made our world faster-moving than ever before, and our payments infrastructure must be able to support this 24/7 economy. While data moves instantly, financial transactions often involve multi-day settlement, leading to higher costs and poor experiences for customers. In the future, money must be able to move at the speed of data while giving users assurances about where and how their funds are being deployed.

Near-zero transaction costs: As with the internet, decreasing costs drive adoption and activity. Our current financial infrastructure often extracts high fees, which are a bad deal for consumers, and price certain activities and payments, such as micropayments, out of the market. While blockchain technology has significantly improved their transaction costs in recent years, even fees on the order of a few cents are cost-prohibitive to the emergence of innovative, smart contract-based business models.

Flexibility: Currently, on and offchain data cannot effectively interoperate. While solutions such as asset tokenization aim to bridge this gap, atomic settlement across assets on new and legacy databases remains a challenge. Data agnosticism allowing interaction with any third party data source would enable flexible atomic smart contract execution between on and offchain networks.

We want to live in a world where money isn’t constrained by infrastructure — a world where value can flow at the speed and convenience of data on the internet — a world where massively scalable smart contract infrastructure allows transacting around the world at a near-zero cost.

This is the world we are building at Radius. Contact us for more information on how we’re bringing financial infrastructure into the internet age.