Sei Network Review: Layer 1 Blockchain Breakthrough Technology

May 29, 2023 - Around 9 mins mins to read

Blockchain is still a topic of great interest and research in the tech community. In particular, Sei Network is one of the highly appreciated blockchains and attracts special attention from the community, with a market value of up to $800 million. With such a high valuation, does Sei have anything to stand out? Let’s find out about this project with Coincu through the Sei Network Review article.

Sei Network Review: Layer 1 Blockchain Breakthrough Technology

What is Sei Network?

Sei Network is the world’s first Layer 1 blockchain devoted to orderbook development, built exclusively for DeFi with the purpose of creating the greatest infrastructure for decentralized finance (DeFi). Sei is the quickest blockchain accessible, thanks to a novel consensus algorithm and technological innovations.

Sei Network is based on the Cosmos SDK and employs the Limit OrderBook (CLOB). In the Cosmos ecosystem, Sei Network serves as a decentralized finance infrastructure. Since Sei Network supports inter-blockchain (IBC) communication, any Cosmos-based dapps may take use of its IBC features.

Moreover, Sei is in the testnet phase and has indicated that it would pay 1% of the total supply to Airdrop for Incentivized Testnet program members to explore the network.

What’s special about Sei Network?

Sei Labs, the developer of Sei Network and the Sei Network ecosystem feels that the DEX is the most crucial piece of the crypto jigsaw. DeFi, without a doubt, requires AMM. In the future, even the different NFT arrays will need decentralized exchanges to OrderBook and AMM. AMM and NFT Marketplace are also badly needed in the gaming industry (OderBook). Even though the underlying blockchains are unknown, the DEXs themselves are incredibly successful.

As the number of testnet users hit 3 million, Sei Network accomplished an incredible feat. Sei has implemented MEV and anti-front-running to increase transaction performance and user experience.

Sei’s objective is to achieve the quickest transaction speed feasible, exceeding the 500ms benchmark. But, Sei has discovered that, despite the quick speed, there is still a significant amount of latency.

Another enhancement of the Sei Network is the processing of unrelated transactions without utilizing the same resources individually and independently, rather than processing all transactions, whether linked or not, sequentially. Moreover, Sei Network is intended to execute transactions in many markets simultaneously, saving time and lowering the risk for market makers.

If the orders in a block are from the same market, they will be aggregated and processed together. To save on gas prices, Sei Network also enables traders to combine numerous separate orders into a single transaction and execute them.

Shortening the time using this approach of transaction aggregation and parallel processing not only serves to enhance the user experience but also helps to avoid front-running, assuring transparency and equity for market participants.

The chain prioritizes dependability, security, and throughput above all else, allowing a completely new tier of ultra-high performance DeFi devices to be created on top. For traders and applications, Sei’s on-chain CLOB and matching engine delivers deep liquidity and price-time-priority matching. Built-in orderbook architecture, substantial liquidity, and a completely decentralized matching service assist Sei-based apps. This exchange model provides users with the opportunity to choose the price, size, and direction of their transactions, as well as MEV protection.

According to Dan Edlebeck, Head of Ecosystem Development at Sei Network at the end of September this year, after 2 months of running the testnet, Sei has more than 25,000 users, over 50 teams building projects on this blockchain. with a total of over 200,000 transactions created.

Up to now, according to the official update on the project website, the number of testnet users is 4 million, the number of projects under construction falls to about 90 with a total number of transactions over 100 million, 500 times in just half a year. Now, Sei Network Review article will continue with the project’s ecosystem.

Ecosystem

Sei Network is still under development and does not have a very extensive ecology. however, this network has piqued the attention of certain significant partners, particularly in the area of DEX (Decentralized Exchange). Typical Sei Network ecosystem initiatives include:

Dagora is an NFT marketplace that is supported by many chains, including Polygon, BNB Chain, and Solana.
SushiSwap is a decentralized exchange with a total value locked of $9 billion at its peak.
Pyth is an Oracle solution that works with numerous large partners, including Amber and Wintermute.
Axelar, a blockchain bridge, has approximately $100 million in TVL.
Vortex is a perpetual contract platform built directly on Sei.
Pharaoh Protocol, an excellent DeFi protocol for Synthetic assets based on Sei.
Kyve is a blockchain system that allows data standards, authentication, and permanent storing of data streams.
UXD is a stablecoin project based on the Solana platform.

Features

Twin-Turbo consensus mechanism

Mempool is a crucial technique for enhancing transaction speed and assuring the blockchain network’s authenticity. It generates a list of unconfirmed transactions and stores it in the validator’s mempool.

When a new transaction is added to the mempool, it is held in the mempool until it is confirmed and placed on the blockchain through the consensus process. In order to obtain transaction fees, validators will endeavor to get transactions from their mempool onto the blockchain as rapidly as possible.

Mempool is another consensus method that is aimed to speed up transactions by processing many blocks at once. Processing numerous blocks simultaneously, on the other hand, consumes a lot of resources and might create network delay if the blocks are not adequately synced.

Parallelization

Parallelization is the technique of breaking down a big operation into smaller processes and then running these processes concurrently to boost processing speed and response time.

This strategy decreases processing time and increases labor efficiency while assuring openness and fairness for market participants.

Parallelization, on the other hand, has several restrictions, such as conflicts between transactions and the potential for mistakes in the process of updating the network’s state. Moreover, if not done appropriately, parallel processing might have an impact on validator synchronization.

Native Price Oracles

Native Price Oracles are a collection of tools embedded into the Sei system that aid in asset appraisal. Validators are necessary to play the function of oracles in order to assure the dependability and correctness of asset pricing. These oracles will aid in determining asset values properly and consistently, making the Trading system more efficient and dependable.

Frontrunning prevention

Sei has been completely redesigned from the ground up, resulting in significant improvements in transaction processing and mempool to assist prevent frontrunning.

Instead of completing orders one by one, auction in regular batches (as would happen on Ethereum or Solana). To assist avoid pre-running, Sei may combine all orders at the conclusion of the block and execute all market orders at the same price.

One-block order fulfillment

On Serum, apps need to do 1 join and queue transaction and then another (in another block) to speed up order fulfillment. Sei collapses it into 1 block for faster order execution.

Hierarchy of trading orders

To reduce gas costs so that MMs and Traders on applications built on Sei can send 1 transaction to update many information.

Tendermint Core

Sei depends on the Tendermint Core consensus mechanism to secure the Cosmos environment. Sei pledges to avoid MEV and front-running by employing numerous batch auctions. This enables Sei applications to access its validators, ensuring a seamless trading experience for clients.

Team

Sei Network offers a knowledgeable and experienced crew. Jayendra Jog and Jeffrey Feng, both founders of Sei Labs, are on the team.

Jayendra Jog: Co Founder

Jayendra was a young man when he graduated from the University of California with a Bachelor of Science in Computer Science. Jayendra worked as an intern with SAP, Facebook, and Pinterest for around 3-4 months each after graduating from high school. Following then, Jayendra worked as a Software Engineer with Robinhood for almost three years before leaving to start Sei.

Jeff F: Co Founder

Jeff and Jayendra seem to have attended the University of California together, however Jeff, unlike his partner, graduated with a Bachelor of Business Administration degree. Jeff worked at Goldman Sachs for three years after graduating from college, then for more than two years at the Coatue investment fund. It helps to understand Sei’s Portfolio, which is packed of famous names in the US.

Investors & Partners

Investors

Multicoin Capital led the $5 million fundraising round, which included Coinbase Ventures, Delphi Digital, Hudson River Trading, GSR, Hypersphere, Flow Traders, Kronos Research, and the creators of Anchorage, Frax, Yield Guild Games, and Tangent.

Sei Labs announced on April 11, 2023 that it has secured $30 million in two strategic funding rounds. Jump, Distributed Global, Multicoin, Asymmetric, Flow Traders, Hypersphere, and Bixin Ventures are among the investors.

Sei also announced a $120 million ecosystem fund to provide liquidity and stimulate the development of dApps, including a $50 million investment from venture company Foresight and previous donations from Multicoin, GSR, Hudson River Trading, Flow Traders, Delphi Digital, and others.

Partners

For best efficiency, Sei Network can work with network validators. Sei Network’s strategic partners include Everstake, Blockscope, ActiveNodes, and others.

Roadmap

The Sei protocol has finished its “Seinami” incentive testnet stage and will shortly launch its mainnet. Nevertheless, it has yet to announce a Sei token airdrop, despite airdrop hunters are speculating about one.

Conclusion of Sei Network Review

The ability to process 20,000 orders per second and provide parallel and slip-free transactions would be excellent for DEX exchanges dealing with spot, derivatives, or even options (option).

It is unlikely that CLOB can overtake AMM in market dominance, but if Sei successfully implements CLOB to blockchain, this network will become a pioneer in attracting more consumers to the DeFi arena. Hopefully Sei Network Review article has helped you have an overview of this project.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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