Blockchain Sei (SEI)
Most blockchain developers aim to solve the now classic blockchain thriller to create a productive, scalable, yet secure decentralized network. The latest generations of blockchains perform the same functions, but the underlying mechanisms differ.
What is Sei?
Sei is a typical, at first glance, first-level blockchain which seeks to eclipse Ethereum and overtake the others in terms of throughput. The protocol is focused on decentralized finance (DeFi) infrastructure and has even been dubbed the "decentralized Nasdaq" as it provides unique tools for building scalable blockchain applications.
The Sei team launched a test network in May 2022 and spent over a year testing the blockchain before launching the leading network. Even at this stage, Sei was joined by major partners such as Axelar and Kyve. Sei's core network was launched in August 2023.
The Sei project raised around $50 million through three rounds of investment and two tokensales. Investors included such notable players in the crypto industry as:
- Circle (USDC issuer),
- Multicoin Capital,
- Jump Crypto,
- Delphi Digital,
- Coinbase Ventures,
- OKX Ventures and others.
How does Sei work?
Sei blockchain uses its innovative consensus mechanism Twin Turbo, thanks to which transactions are completed in an average of 500 ms and a maximum of 300 ms, 10 times faster than its competitor Solana. Twin Turbo is based on Cosmos SDK and Tendermint Core and delivers a throughput of up to 22,000 transactions per second.
Thanks to Twin Turbo's consensus, market makers can update prices with each block, resulting in low order execution latency, lower spreads and, therefore, less risk for traders.
The Sei network is capable of processing transactions and mining blocks in parallel with each other. For example, Sei places orders at the end of each block. It processes them simultaneously instead of processing them individually, which allows for the creation of high-performance decentralized exchanges based on this blockchain. In addition, this approach avoids order precedence, which often occurs with sequential processing. Sei also allows orders to be aggregated at different levels, providing traders with savings on network fees. This is enabled by the built-in Order Matching Engine, which offers scalability of decentralized exchange applications built on the Sei blockchain.
Sei ecosystem
Despite its recent launch, Sei has a mature ecosystem with dozens of decentralized applications (dApps). Notable DeFi protocols in the Sei ecosystem include:
- Sushi,
- Stride,
- Astroport,
- Satori,
- Elixir,
- Space ID,
- Crescent and several others.
Sei also has significant partners from the Web3 industry:
- Axelar,
- Band Protocol,
- Agoric,
- Kyve,
- DeFund,
- Celer Network,
- Swing and others.
So far, Sei is significantly behind Ethereum, Tron, Solana, Arbitrum and other leading DeFi-focused decentralized platforms regarding ecosystem development and the number of dApps launched on its network.
Sei cryptocurrency
SEI is Sei's native blockchain protocol cryptocurrency, released alongside the leading network in August 2023. The SEI cryptocurrency is the main asset of the ecosystem, used to pay for the network's fees and as stealth rewards that keep the network secure.
SEI's applicability doesn't end with this: the cryptocurrency can be used for exchanges, providing liquidity on decentralized exchanges (DEXes), receiving and issuing loans (lending), buying NFTs on marketplaces, and more.
Currently, there are 2.3 billion SEI available on the market, and the maximum issue is 10 billion.
Immediately after listing, SEI's capitalization reached $325 million at $0.18 and has grown 4.7 times to $1.54 billion as of January 2024. In terms of capitalization, SEI is among the top 50 largest cryptocurrencies, according to CoinMarketCap.
The SEI cryptocurrency reached its all-time high (ATH) on January 4, 2024 at $0.87. After reaching ATH, SEI's price corrected and dropped to $0.67. The cryptocurrency is available on major crypto exchanges like Binance, Coinbase, Kraken, ByBit, and HTX (formerly Huobi).
Prospects for Sei
It's worth noting that networks like Sei have a lot of competition, as dozens of first- and second-tier blockchains came out between 2020 and 2023. At the same time, the Sei ecosystem is growing rapidly: the capitalization of the project has grown almost 10 times from $200 million to $1.94 billion in the last two months alone.
Currently, the Sei ecosystem lags behind the leading DeFi platforms, with liquidity concentrated mainly in the Cosmos ecosystem and virtually isolated from EVM-compliant networks, which have a larger market share regarding the number of blockchain-enabled assets (TVL). According to DeFi Llama, the TVL of the five largest blockchains accounts for more than 83% of the decentralized finance market — more than $43 billion. At the same time, the TVL of Sei, according to the same service, is only about $10 million. Still, DeFi Llama considers the liquidity of only 5 DeFi protocols, although there are dozens of them in this network, so the information is incomplete.
A positive role in Sei's development may also be played by the growing DeFi sector, the trading volume of which, according to analysts, will reach a new historic high in 2024. However, one of the main problems of Sei remains segmentation, as the ecosystem of this project is focused mainly on experienced traders and DeFi users.
