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Introduction
Sei Network is the DeFi hub of the future. It is a layer-1 blockchain, a DeFi-specific order book protocol within the Cosmos ecosystem that leverages various features to improve scalability and aims to be the foundation of future financial systems. By the end of September last year, Sei launched a $50 million package to attract DeFi projects to the blockchain.
With the improvement of network performance, DEX protocols based on decentralized order books such as Serum, dYdX, and Injective have been released one after another, but each has its own advantages and disadvantages.
Sei Network is an intermediary between application chains and Layer 1 blockchains, and utilizes a new approach that is different from existing order book-based DEX protocols.
It provides deep liquidity by offering its own order matching engine, aiming to achieve extremely high throughput and low latency through the features of optimistic block generation, smart block propagation and parallel processing of transactions.
SEI technical features
What makes the Sei Network different from other networks and the various features provided on the blockchain layer for DeFi DApps that will sit on top of the network:
1. CosmWasm and IBC
2. Local order matching engine
3. Optimistic Block Generation
4. Smart Block Propagation
5. Parallel Order Execution
6. Preventing false starts
7. Oracle Pricing
8. Order bundling
Thanks to the above features, Sei Network can achieve high throughput and low latency. The continuous launch of real world assets (RWA) on the chain creates a convincing narrative for the next DeFi bull run.
The SEI is positioned to extract TVL from the eventual RWA on-chain migration as it is superior to application chains and other high-performance L1s. The tokenization of these assets is a complex process and will likely be accomplished through specific separate protocols.
X’s industry-specific approach allows tokenized protocols to gain liquidity more easily than application-specific chains, as these assets can access multiple DEXs. X’s parallelization allows for the creation of complex financial products using tokenized RWAs.
Due to DEFI optimized elements, Sei allows institutional funds to be more capital efficient than high-performance L1s.
SEI Ecosystem
Currently, more than 60 teams are building projects on SEI. It is worth mentioning that SushiSwap is launching a decentralized perpetual futures exchange on Sei Network. They purchased VortexProtocol and deployed it directly on SeiNetwork.
Since Sei Network is currently in the testnet stage, less information has been released about the ecosystem, but according to the official website, there are more than 70 dApps being prepared for release, and the currently released DApps are shown above. Let's take a quick look at each one:
Vortex — Vortex Protocol is an order-book based decentralized derivatives exchange on the Sei Network that can leverage the deep liquidity of the network’s own order book. It offers up to 10x leverage trading, and since the network can leverage IBC, it plans to support perpetual futures trading on over 35 different assets.
Pharaoh Protocol — Pharaoh Protocol is a decentralized synthetic exchange on the Sei Network. A synthetic token is a token designed to track the price of a specific commodity. Details on how it will work have not yet been disclosed.
Axelar Network — Axelar Network is an application chain that acts as a bridge in the Cosmos ecosystem. Normally, application chains in the Cosmos ecosystem can interact through IBC, but the disadvantage is that it is difficult to interact with chains outside of Cosmos (Ethereum, Solana, etc.). The Axelar Network will greatly help the cross-chain utilization of the Sei Network, as validators support token bridging and messaging with other networks through transaction verification.
KYVE — KYVE is a decentralized data protocol that will help store, access, query, count, and sort the massive amounts of data generated by the Sei Network. The data collected by KYVE is stored in Arweave, a permanent storage protocol.
Multichain — Multichain is a bridging protocol, formerly known as Anyswap, which will improve Sei Network’s cross-chain user experience through token bridging, messaging, and more similar to Axelar Network.
Skip Protocol — The Skip Protocol aims to decentralize MEV in the Cosmos ecosystem. MEV is decentralized through MEV auctions, and the resulting profits flow into the community pool of the Sei Network, and the network's users and validators can indirectly benefit. In addition, the Skip Protocol itself provides a solution to prevent front-running by operating transaction relays.
Nitro — Nitro is a rollup that uses the Optimistic Rollup approach, which uses the Solana Virtual Machine called Sealevel. The Sei Network is used as the base layer that the security relies on.
Team Background
Sei Network was founded by Jeff Feng, a former Goldman Sachs technology investment banker. Its co-founder Jay Jog was a former software engineer at Robinhood. Other team members have worked at companies such as Google, Amazon, Airbnb, and Goldman Sachs.
While working at Robinhood, Jog realized that the biggest problem was poor communication of issues within the company. After the GameStop stock incident, Jog believed that decentralization and transparency play a vital role in cryptocurrency.
Hence, Sei Network, which is able to get more transactions through smart block propagation. As advertised on the main website, it aims to be the base layer that makes a decentralized Nasdaq exchange a reality.
Sei Air Throw
1% of the Sei token supply is allocated to the incentivized testnet and rewards early members of the Sei community who use the chain. The team said that it will value users who have a strong desire to advance, test and develop the Sei ecosystem. Therefore, there will be airdrops for participating in the testnet, and there will be many ways to get rewards. If the testnet goes smoothly, the mainnet is expected to be launched in the second quarter of this year.
The following is a tutorial on how to participate in the airdrop
The first step is to receive the tap
：http://app.seinetwork.io/faucet
- Tap Label
- Click Connect Wallet to connect your Keplr wallet
- Click on autofill or manually enter our address $SEI
- Click Next
- We fill in the verification code
- Click Request Sei
Second participation game
http://app.seinetwork.io/game
- Pledged Games Tab
- Click to join the team
- We receive information about our team
- We delegate the token $SEI to the designated validator
- Click Validator
- Click to delegate
- We give the quantity
- Click to delegate
Step 3 Check
http://app.seinetwork.io/stake
- Pledge Tags
- We check if the selected validator is consistent with the one assigned to us by the system as part of the game
- If not, I recommend using the re-delegate option to transfer our tokens to the correct validator
For more details, please visit the project website
Financing
In August, Sei raised $5 million from investors including Multicoin Capital, Coinbase Ventures, Delphi Digital, Hudson River Trading, GSR, Hypersphere, Flow Traders, etc. The new funds will be used to support the network as it approaches mainnet launch and further accelerate the growth of the 20+ dApps already built in the Sei ecosystem.
Sei has a total ecosystem funding of $70 million, just eight months after its founding
MEXC Global announced the launch of a $20 million special fund to support the development of Sei Network’s key projects.
The public chain Sei Network launched a $50 million ecological fund to support DeFi applications developed on it.
The team is currently raising a new round of financing, which is expected to be announced soon, so stay tuned.
Conclusion
Currently, Sei Network is in the testnet stage and is encouraging user participation by providing incentives. It remains to be seen whether Sei Network can significantly improve scalability by introducing various new features and become the DeFi hub in the Cosmos ecosystem.
However, DeFi TVL is close to historical lows, on-chain asset yields are unstable or low, and the entire ecosystem is inefficient due to the need for over-collateralization. Sei provides relatively stable and sustainable returns through its novel industry-specific optimizations for DeFi, and brings value on-chain through cash flow and institutional capital.