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SETL demonstrates 1m transactions a second on blockchain

SETL demonstrates 1m transactions a second on blockchain

Blockchain settlement and payment infrastructure provider SETL is claiming a "breakthrough moment" after its Regulated Liability Network (RLN) demonstrated that it can process one million transactions per second (tps).

The RLN is a distributed ledger approach first mooted by Citi’s Tony McLaughlin in his paper, The Regulated Internet of Value.

In the paper, McLaughlin proposed a single shared network for tokens, stating: “Such a network would be significantly different from today’s siloed financial architecture — a regulated internet of value. This system would embody tokenized currencies, bonds, equities, trade instruments, and other regulated financial instruments in an ‘always on’, programmable and global network.”

SELT ran with the idea and has now published a whitepaper detailing the RLN's performance tests on its Global Banking Blockchain, on an environment run on Amazon Web Services.

The million tps throughput dwarfs both crypto and conventional systems. In comparison, Ethereum currently can process only 15 tps with more recent blockchain technology boasting tens of thousands of tps. Traditional card payment systems process around 1700 tps on average with volumes peaking at around 24,000 tps.

In November, SETL opened its sandbox for trial, attracting a host of large banks, custodians, and e-money companies. The trial is expected to last six to nine months and will explore how RLN can be used to settle interbank and crossborder transactions on a real-time basis, including delivery versus payment and complex liquidity management arrangements.

Anthony Culligan, chief engineer, SETL, says: "This is a breakthrough moment for financial services. We are deploying the technology used by social media, ride-sharing and online markets, to create an extremely effective payments and settlement infrastructure. It is inherently distributed, secure and resilient."

The whitepaper details a system which creates a very large-scale distributed transaction processing platform. Each bank, central bank, or custodian controls a segregated partition on the RLN, into which they issue tokens representing liabilities to their customers.

The RLN then co-ordinates atomic movement of value between the partitions. Those movements could be simple retail payments, cross border transactions, or complex wholesale movements such as repos or delivery-vs-payments.

The goal of the testing performed was to demonstrate the scalabilty of the technical implementation to support 1000 banks around the world initiating 1000 tps to be processed in a simulated three-partition scenario.

Comments: (1)

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 09 December, 2021, 11:57Be the first to give this comment the thumbs up 0 likes

Great to see yet more innovation in this space. Interesting though that we are dealing simply with token ownership - the work now begins on converting that into a governed process where a payment can be facilitated....