What Are the Trade-Offs between Decentralization and Performance When Designing a Blockchain for Derivatives?

The primary trade-off is that increasing performance, measured in transaction speed and throughput, often requires a degree of centralization. Blockchains with fewer, more powerful validator nodes can process transactions faster but are less decentralized and more susceptible to collusion or censorship.

Conversely, a highly decentralized network with many nodes is more secure and censorship-resistant but typically suffers from lower throughput and higher latency due to the need for broader consensus. For derivatives, this means a platform might sacrifice some decentralization for the speed needed to compete with traditional markets.