High-frequency DeFi is the future of finance
“High-frequency DeFi” refers to trading strategies that use algorithmic trading bots to execute large numbers of trades at a very high frequency in the decentralized finance (DeFi) market. These bots use complex mathematical models to analyze market data and make trading decisions in real-time.
The New York Stock Exchange (NYSE) reported an average daily trading volume of approximately 2.2 billion shares in 2020, which is equivalent to about 27,500 trades per second assuming an average trade size of 80 shares. If we assume that all of these trades were to be settled on a blockchain-based system, we would need a TPS capacity of at least 27,500.
Other blockchains face several technical challenges that make it difficult to support high-frequency trading in the DeFi market.