SETL, a blockchain settlement and payment infrastructure provider, reveals that it has had one of those “breakthrough moments” after its Regulated Liability Network (RLN) was reportedly able to demonstrate that it successfully processed 1 million transactions per second (TPS).
The RLN is described as a distributed ledger tech (DLT) approach first noted by Citi’s Tony McLaughlin in the paper, titled, The Regulated Internet of Value.
As mentioned in the paper, McLaughlin had proposed a single-shared network for digital tokens, adding:
“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 decided to go with this idea and has shared a whitepaper outlining the RLN’s performance tests on its Global Banking Blockchain (via an environment that’s run on Amazon Web Services or AWS).
The million TPS throughput appears to be far greater than current crypto and legacy systems. In comparison, Ethereum (ETH) can only handle around 15 TPS with more recent blockchain or DLT systems carrying out thousands of TPS. Meanwhile, conventional card payment systems can handle about 1700 TPS on average with volumes hitting their peak at approximately 24,000 TPS.
In November of this year, SETL had opened up its sandbox for trial/testing and managed to attract large banking institutions, custodians, and digital money firms. The trial period is scheduled to last for around 6-9 months and will be looking into how RLN may be used to handle interbank/cross-border transfers on a real-time basis, which includes delivery versus payment and complex liquidity management arrangements.
Anthony Culligan, Chief Engineer at SETL, stated:
“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 specifies a system which can create a large-scale distributed transaction processing platform. Each bank, reserve bank, or custodian is able to control a segregated partition on the RLN, into which they are able to issue virtual tokens that may represent liabilities to their clients.
The RLN is then able to coordinate the atomic movement of value between different partitions. Those movements may be fairly simple retail payments, cross-border transfers, or even complex wholesale movements like repos or delivery-vs-payments.
The main aim of the testing performed is to showcase the scalability of the technical implementation to support 1000 banking institutions across the globe with initiating 1000 TPS to be processed via a simulated three-partition scenario.