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This is a fundamental issue of the Matrix protocol, yes. For regular small scale use it doesn't matter so much, and the state history gets reset every time you do a room upgrade, which is another annoying "feature" of Matrix, but it eases the fundamental problem a bit.
But IMHO the Matrix protocol is a child of the Bitcoin hype era and is built on a similar data-structure that is inherently impossible to scale and the developers of Matrix should have realized that early on. Their bosses back then actually did, but they spun it off as a separate company and got some crypto-currency investments so the can was kicked down the road and here we are...
Any source for the coin stuff? Never read about it
You could even argue it with the data structures and the protocol itself: Modelling chat rooms as graphs ("directed acyclic graphs"), which need to be eventually consistent from beginning to end is plain madness for big and long-living public spaces. This blog post is a good collection of some of the major problems coming from that: Why not Matrix? - telegra.ph
I knew of some of these issues with the protocol, but this article definitely gives an impression that Matrix was built as a "cool protocol" first, with messaging applied on top as an afterthought.
Welp. This comment has completely killed all my enthusiasm for matrix 😅 I had no idea it was such a horrible mess under the hood...
I'm trying to move some communities off Discord to something self hosted but I don't know enough about SMPP to know if it would do the job.