Exchange Appchain vs Shared L2: Throughput

Dedicated block space: No competition from other dApps means consistent, predictable performance. A chain like dYdX v4 (Cosmos SDK) or a custom OP Stack chain can achieve 10,000+ TPS for its specific order book logic. This matters for central limit order books (CLOBs) where sub-second trade execution is non-negotiable.

Optimized consensus: Can implement instant finality mechanisms (e.g., Tendermint BFT) or very fast optimistic rollups, reducing trade settlement risk. This eliminates the multi-block reorg uncertainty of probabilistic finality. This matters for institutional trading desks and perpetual futures protocols like Hyperliquid that require guaranteed state finality.

Network effects of liquidity: Access to shared liquidity pools (Uniswap, Aave) and composable money legos within a single atomic transaction. While base TPS may be lower (e.g., Arbitrum ~40K, Base ~2K), bursts are handled by a massive, decentralized sequencer set. This matters for spot DEX aggregators and leveraged yield strategies that need multi-protocol interactions.

Contention during peaks: During NFT mints or major airdrops (e.g., Arbitrum's ARB drop), network fees spike and block space becomes scarce, causing degraded performance for all apps. Your exchange's users compete with Pudgy Penguins for gas. This matters for retail-focused perpetual DEXs like GMX on Arbitrum, where user experience suffers during high-traffic events.

Guaranteed, isolated capacity: An appchain like dYdX v4 or Injective provides dedicated block space, unaffected by other protocols. This enables predictable TPS (e.g., 10,000+) and sub-second finality for its specific orderbook or DEX logic. This matters for high-frequency trading (HFT) and centralized exchange-grade performance where latency is critical.

Tailored execution environment: Developers can implement custom mempools, parallel execution (like Sei's Twin-Turbo Consensus), and fee markets optimized for a single application. This eliminates generic VM overhead, allowing maximal transactions per block. This matters for niche verticals (NFT minting, gaming) requiring specialized state transitions that a general-purpose L2 cannot efficiently handle.

Network effect scaling: A shared L2 like Arbitrum One or Optimism benefits from the combined activity of all its dApps, which drives continuous scaling improvements (e.g., Arbitrum Nitro's 40k+ TPS capacity). Throughput is shared but massively scalable via fraud/validity proof compression. This matters for ecosystem composability and applications that thrive on interconnected liquidity (DeFi protocols, cross-app integrations).

Elastic resource pooling: During low activity periods, any single dApp on a shared L2 can utilize a large portion of the chain's idle capacity for bursts of transactions at low, predictable costs (fractions of a cent). This matters for applications with variable demand patterns (social apps, event-driven mints) that cannot justify the constant cost of maintaining a full appchain.

High fixed cost for peak capacity: You pay for security (validator set) and infrastructure 24/7, regardless of usage. This leads to higher baseline costs per transaction during off-peak times. It also fragments liquidity and users from the broader L2 ecosystem. This is a poor fit for bootstrapping projects or apps requiring broad, casual user access.

Unpredictable performance during congestion: When network demand peaks (e.g., a major NFT drop or token launch), your dApp contends for block space with others, causing volatile fee spikes and potential transaction delays. You cannot guarantee SLA-level performance. This is a poor fit for applications demanding consistent, millisecond-level latency regardless of network conditions.