An Overview of DeFi Native Public Chain Sei Network: Achieving High-Speed Chain Through Parallel Execution

Written by: SnapFingers DAO

Background

The Cosmos ecosystem has recently gained significant attention again. From the announcement at the end of June that dYdX would migrate its dYdX V4 version to the Cosmos ecosystem, to the release of the Cosmos 2.0 white paper at the Cosmoverse conference at the end of September, the potential of the Cosmos ecosystem has been showcased.

Sei, as the first parallelized Cosmos chain, focuses on the DeFi track, aiming to build Sei into a high-speed chain specifically for trading to help decentralized exchanges operate better and provide the best user experience for end users, thereby making the emergence of new financial products (complex futures and options, live sports betting) possible.

The Sei project team combines technology and traditional finance backgrounds, having completed a $5 million funding round led by MULTICOIN CAPITAL, and announced the launch of a $50 million ecosystem and liquidity fund to support DeFi applications developed on its platform. The project also announced that 1% of the Sei token supply will be allocated to incentivize the testnet, which is currently in the fourth phase (Act-4) of incentive testing.

From both a technological innovation and community ecosystem incentive perspective, Sei is a Layer 1 project worth paying attention to and exploring in depth.

About Sei

What is Sei?

1. Parallel Execution High-Speed Chain

Sei Network is the first parallelized Cosmos chain that allows independent transactions to be processed simultaneously, improving overall throughput and latency. Sei has implemented a parallel order matching system, meaning that the order matching processes for different markets (trading pairs) can run concurrently. Sei reports that they currently achieve a blocking time of about 0.9 seconds, which would make it the fastest Cosmos SDK chain to date if it goes live on the mainnet.

2. DeFi Native Public Chain

Designed specifically for trading. Built using the Cosmos SDK and Tendermint, it features a built-in Central Limit Order Book (CLOB) module. Any application can leverage Sei's built-in order matching engine to instantly launch and customize order book trading for spot, derivatives, options, sports betting, and more. The fastest determinism and native MEV protection on Sei also make it attractive for large-scale order book trading.

Unlike dYdX and Injective, Sei employs a pure on-chain order book matching engine, ensuring security and decentralization while maintaining the speed and efficiency of off-chain order books.

3. MEV Resistance

Sei cleverly uses a "frequent batch auction" mechanism to avoid MEV issues, aggregating each order at the end of the block to execute these orders at the same price, preventing front-running.

4. EVM and Cosmwasm Compatibility

Sei is compatible with EVM and Cosmwasm, meaning Ethereum & Cosmos applications can be deployed on Sei.

5. Partially Permissioned

Developers can deploy two types of contracts: one is a trading contract, which utilizes Sei's DEX module CosmWasm contract; the other is a general contract, which is a CosmWasm contract that does not require DEX module functionality. When deploying a general contract, developers need to submit a proposal and obtain permission from the governance body.

Team

The Sei team was founded by Jeffrey Feng and Jayendra Jog, with team members having backgrounds in both technology and traditional finance, having worked at companies such as Robinhood, Databricks, Airbnb, and Goldman Sachs.

The team primarily consists of three types of backgrounds:

• Cosmos OGs, who have worked in the crypto ecosystem, particularly in the Cosmos ecosystem, for many years and have a deep understanding of it.

• Senior engineers from traditional internet companies like Robinhood, Databricks, and Airbnb, who understand the complexities of building an L1 chain.

• Traders with rich TradFi experience from Goldman Sachs and other investment firms, who are committed to bridging the gap between DeFi, institutions, and the general public.

The Sei team has disclosed limited information, and confirmed members include: @deeeedle @jayendra_jog @philipsu522 @0xIsekai

Project Progress

• Currently conducting incentive testing Act-4 (Test tutorial link), having previously completed three phases of incentive testing (Act-1, 2, 3).

• On October 30, Sei Network released a white paper introducing the Twin-Turbo consensus to significantly improve block construction and processing times.

• On October 29, announced an incentive program, confirming that 1% of the Sei token supply will be allocated to the incentive testnet and rewarding early members of the Sei community using the chain.

• Launched a $50 million ecosystem and liquidity fund on September 28 to support DeFi applications developed on its platform.

• Completed a 5 million dollar funding round led by MULTICOIN CAPITAL on August 31, with participants including Coinbase Ventures, Delphi Digital, Hudson River Trading, GSR, Hypersphere, Flow Traders, Kronos Research, Anchorage founders, Frax, Yield Guild Games, and Tangent.

Community

Official links Linktr

• Github Testnet repository 1.6k Forks

• Discord 73k members / 8.8k online, the community is very active, indicating a high level of participation in the testing incentives.

• Twitter 65k followers, approximately one AMM per week.

Cooperative Ecosystem Map

The official website shows that over 70 apps are launching. The official blog has announced the following ecosystem partnerships:

• Axelar Network ------ A heterogeneous cross-chain communication protocol, Axelar is a universal cross-chain infrastructure protocol that supports information transfer between any two public chains. Through a decentralized network protocol and SDK, developers can create applications and integrate them with any blockchain ecosystem. Users can interact directly with all applications in the ecosystem from their wallets.

• White Whale -- A cross-chain liquidity protocol, White Whale is a cross-chain liquidity protocol that improves market operation efficiency through arbitrage, flash loans, and cross-chain liquidity pools. White Whale v2 will provide cross-chain infrastructure for the Cosmos ecosystem, serving on-chain individual liquidity providers, reducing liquidity fragmentation and price discrepancies, improving capital utilization, and achieving decentralized market making. Additionally, White Whale v2 plans to offer flash loan liquidity pools and open-source arbitrage bot services in the future.

• KYVE -- A decentralized data verification protocol based on Arweave, KYVE is a Web3 data lake solution that enables data providers to achieve standardization, verifiability, and permanent storage of blockchain data streams. By using Arweave's data storage solution, it creates permanent backups, ensuring that resources remain scalable, immutable, and available over time.

• Leap Wallet --- A non-custodial wallet based on Cosmos. As a non-custodial wallet within the Cosmos ecosystem, users can access DApps, DeFi, NFTs, and other functionalities through a browser extension and a future mobile version. They can also connect Ledger with Leap Wallet to enhance security.

Incentive Testnet Task Introduction

Currently, the Sei testing tasks have progressed to the fourth phase (Act-4), with this testing task focusing on interaction.

Task Pre-Reminders

• Please note that to receive the testnet rewards, KYC is required.

• Prepare the Keplr wallet.

• The test faucet is in the Discord channel #?│atlantic-1-faucet.

Test Content

The test content is specifically outlined on Sei's official notion (Direct link).

This is the task for the fourth phase, but tasks from each phase are independent, and rewards are calculated separately, so there is no need to worry that not participating in previous tests will affect the rewards for completing tasks in this phase.

Conclusion

From the beginning, Sei has positioned itself as a "Layer 1 specifically for trading," clearly demonstrating its ambition ------ "Crypto Nasdaq." As cryptocurrency trading enters the mainstream trader's view, if Sei can provide truly high-speed, low-cost trading infrastructure, developers, traders, and investors will flock to it. Ultimately, just as Nasdaq's high-speed electronic quotes outperformed traditional quotes from other exchanges, Sei may also become a massive "next-generation" Layer 1 through this route.

However, for now, all of this is still premature. As the Sei team itself acknowledges, "All Layer 1s other than Ethereum are startups." At a time when hotspots are clustered around Web3, Sei has not sought to capture the potential explosion of the application layer but has instead further delved into the sizable trading market, indicating Sei's independent thinking and firm determination.

From a market perspective, Sei Network possesses multiple concepts, such as parallel execution Layer 1, CLOB, and MEV resistance, making it easy to attract market attention. Additionally, its compatibility with EVM facilitates the establishment of an application ecosystem. In terms of community operations, the incentive testnet is progressing in an orderly manner, with clear airdrop expectations, and the community is very active. These characteristics all contribute to Sei Network's ability to capture the market.