Blockchain Architecture Needs Fundamental Redesign for Financial Systems

The blockchain industry has long attempted to build financial systems on infrastructures that were never explicitly designed for financial applications, according to ChefWEN, CEO of Momentum. In his recent opinion piece titled "Financial Infrastructure Requires Rethinking Blockchain Architecture," published by Crypto.news on October 28, ChefWEN argues that the growing complexity and demands of the financial sector necessitate a fundamental overhaul of blockchain architecture.

ChefWEN identifies critical challenges, including transaction failures, capital inefficiencies, and fragmentation across protocols, as consequences of mismatched blockchain designs. "The blockchain layer was not built to handle the robust demands of finance," he emphasized, pointing to inherent limitations in current architectures.

Why Finance Needs Parallel Processing and Ethereum Falls Short

A major failing of conventional blockchain systems lies in their reliance on sequential execution. ChefWEN specifically draws attention to Ethereum’s general-purpose design, which processes transactions one at a time in chronological order. "Ethereum's sequential execution model creates bottlenecks during peak activity periods, leading to inefficiencies," he explained. While this sequential structure suits Ethereum’s design as a multi-functional computing platform, it is poorly equipped to meet the unique requirements of financial systems.

ChefWEN argued for the necessity of parallel processing in financial applications, contrasting it with Ethereum’s limitations. Unlike sequential models, parallel processing enables independent transactions to occur simultaneously. "Alice's token swap and Bob's staking, for example, are mostly independent activities," he noted. By enabling tasks to proceed concurrently, parallel architecture eliminates unnecessary slowdowns.

Momentum’s strategic decision to utilize Sui (SUI) reflects this understanding. "Sui is purpose-built with a parallel execution model and object-oriented design," ChefWEN stated. He highlighted the impressive performance of Momentum’s decentralized exchange (DEX) under Sui’s architecture, citing achievements such as $500 million in liquidity, $1.1 billion in daily trading volume, and 2.1 million cumulative users within six months. "Traditional sequential blockchains would not have been able to achieve these figures due to inherent inefficiencies," he added, underscoring the superiority of parallel architecture in financial systems.

The Importance of Composable Infrastructure

Another pressing issue ChefWEN noted is protocol fragmentation within the ecosystem. Many financial platforms treat decentralized exchanges (DEXs), lending, staking, and treasury management as isolated tools rather than interconnected systems. He argued that this fragmented approach stifles innovation and forces developers to repeatedly solve the same problems.

"When every protocol builds its own isolated treasury, staking, and infrastructure, the ecosystem wastes valuable development cycles while progress stalls," ChefWEN explained. Instead, he advocates for shared, composable infrastructure that eliminates redundancy.

Momentum exemplifies this principle with its development of infrastructure primitives that other protocols can readily adopt. ChefWEN referenced MSafe, Momentum’s treasury management solution, as a key example. "MSafe safeguards hundreds of millions of dollars across the Move ecosystem, supporting composability and shared solutions," he noted.

By creating modular systems designed to interoperate seamlessly, the digital asset industry could transition from fragmented ecosystems to unified, scalable financial networks.

Institutional Adoption Hinges on Compliance Features

While regulatory uncertainty and user experience are often discussed as barriers to institutional adoption, ChefWEN identified the lack of compliance infrastructure as the real bottleneck for mainstream capital inflows. "Institutions will not invest heavily in systems that lack essential compliance measures like KYC verification, regulatory audits, and documentation," he asserted.

ChefWEN proposed integrating permissioned compliance into decentralized systems, where these features would function as optional modules rather than centralized controls. "Institutions need confidence that their transactions adhere to regulatory guidelines while still leveraging decentralized infrastructure," he explained, highlighting this as a structural, not merely a functional, requirement.

By embedding compliance mechanisms into blockchain systems, protocols could open pathways for institutional capital deployment while maintaining core decentralization principles.

Purpose-Built Financial Architectures Are the Future

In conclusion, ChefWEN argued that blockchains designed for general-purpose computation, such as Ethereum, cannot effectively serve the needs of financial infrastructure. The sector requires architectural designs optimized for parallel execution, composability, and institutional compliance.

Looking ahead, ChefWEN predicts that the digital asset industry will increasingly migrate toward specialized blockchains that better align with economic efficiency and financial demands. While Sui offers a demonstration of these principles, ChefWEN clarified that the focus is less about individual blockchains and more about designing architectures tailored to finance.

"The evolution of blockchain infrastructure is inevitable," ChefWEN said. "Systems built for general computation will give way to platforms purpose-built for financial innovation." By addressing inefficiencies, fostering collaboration, and fortifying compliance protocols, the industry can unlock its full potential and drive mass adoption.