The burgeoning field of rooftop solar panel technology has revolutionized electricity markets, empowering consumers and prosumers to exchange localized energy. Blockchain technology, with its inherent ability to facilitate peer-to-peer (P2P) energy transactions, has emerged as a pivotal player in this evolving landscape. However, despite its promise, blockchain technology in this context is still in its nascent stages, grappling with the notorious ‘trilemma’ of scalability, security, and decentralization. This manuscript delves into the complexities of applying blockchain technology to P2P energy trading, with a particular focus on overcoming the scalability limitations. To address this open challenge, we propose a novel blockchain-based solution named ‘DYNAMO,’ a decentralized market clearance system. The efficacy of this approach is validated through empirical modeling, leveraging data from a real-world case study. Our findings demonstrate that DYNAMO significantly surpasses existing base layer models in scalability, while meticulously safeguarding the fundamental principles of security and decentralization. This research represents a crucial leap forward in unlocking the full potential of blockchain technology for facilitating P2P energy trading, paving the way for a more efficient and decentralized energy future.