Disclosed herein are systems, methods, and non-transitory computer-readable storage media for managing free chains of compute resources. A system configured to practice the method divides a free chain of compute resources into a usable part (UP) which contains resources available for immediate allocation and an unusable part (UUP) which contains resources not available for immediate allocation but which become available after a certain minimum number of allocations. The system sorts resources in the UP by block number, and maintains a last used object (LUO) vector, indexed by block number, which records a last object in the UP for each block. Each time the system frees a resource, the system adds the freed resource to a tail of the UUP and promotes an oldest resource in the UUP to the UP. This approach can manage free chains in a manner that is both flaw tolerant and has relatively high performance.