At the beginning of the new year of 2024, the Sei chain token SEI became one of the most talked about tokens, with the price soaring by 75% in a week. The Sei chain ecology has also become a hot topic in the currency circle. This article will delve into the background, mechanism, risks and future prospects of the Sei chain.
Introduction to Sei Chain
Sei is a general-purpose open source layer 1 blockchain focused on efficient transactions of digital assets. Its core goal is to provide the shortest transaction latency in the industry, as low as 300 milliseconds. Sei introduces a built-in Order Matching Engine (OME) designed to help trading applications scale and effectively combat MEV (Maximum Extractable Value) by preventing front-running mechanisms. As a new generation of Layer 1 public chain, Sei was successfully launched on the mainnet in August 2023 and quickly attracted widespread attention.
Sei began to attract attention back in August 2022, when Sei Labs announced the completion of a $5 million seed round. This round of financing was led by well-known institution Multicoin Capital, with Coinbase Ventures, GSR, etc. also participating in the investment. In April 2023, Sei once again announced the completion of financing, this time with a valuation of $800 million. Investors such as Multicoin Capital and Jump Capital continue to support Sei, demonstrating confidence in the project’s prospects. In addition, Sei announced at the end of November 2023 that it will be upgraded using parallel EVM technology this year, and the version will be upgraded to v2. This technological upgrade is considered the focus of 2024 by many investment research institutions.
According to CoinMarketCap data, as of January 8, 2024, Sei chain TVL has exceeded $2.6 billion, showing its strong market appeal.
Mechanical principles and characteristics of Sei chain
Twin-turbo consensus mechanism: Sei adopts a twin-turbo consensus mechanism designed to optimize block propagation and transaction processing. The mechanism includes smart block propagation and optimistic block processing. Smart block propagation improves transaction processing efficiency by reducing the total time validators wait to receive blocks. Optimistic block processing further improves efficiency by allowing validators to start processing transactions concurrently upon receipt of the first block proposal of any height.
Parallel processing: Sei implements parallel processing, which is divided into DeliverTx transaction parallel processing and market-based parallel processing. This makes Sei more efficient when processing transactions, which is especially important for applications such as decentralized exchanges.
Native order matching engine
Sei introduces a native order matching engine that is not limited to token trading, but also provides a flexible interface that allows decentralized exchanges to customize asset representation. The engine provides a powerful and efficient trading infrastructure by handling multiple aspects such as cancellation orders, limit orders, and market orders.
Other improvements at the protocol level: Sei has also introduced innovations such as native price oracles and transaction order bundling to improve its functionality and performance. The price oracle is used to support asset exchange rate pricing, while order bundling improves user experience and performance through multi-level bundling. In addition, Sei provides flexibility in transaction fees, allowing decentralized exchanges to customize transaction fees.
Sei chain Top 10 representative projects
A number of outstanding projects have emerged on the Sei chain, which have performed well in DeFi, NFT and other fields. Through support for these projects, the ecosystem of Sei Chain continues to enrich, attracting a large number of users and developers to participate.
Sei chain project investment risk analysis: "Although Sei has made significant progress in technology and financing, investment is still accompanied by certain risks. Possible risks include market fluctuations, uncertainty caused by technology upgrades, competitive pressure, and the overall encryption market regulatory risks. Investors need to carefully evaluate these factors and pay close attention to the development of the project.
Technology implementation risks
Although the Sei chain technically introduces a series of innovative features, such as parallel EVM and optimistic parallelization, the implementation of new technologies is always accompanied by certain risks. Projects may face technical challenges during development, such as performance tuning, security issues, and integration with other ecosystems.
Market competition risk: The blockchain industry is highly competitive, and there is competition from other Layer 1 projects. Projects such as Ethereum and Solana have already occupied a place in the market, and the Sei chain needs to find its place in this highly competitive environment.
market volatility
The Sei token has experienced large gains in the short term, which may have been affected by market sentiment and short-term speculative factors. Investors need to be wary of token price fluctuations, especially large price fluctuations that may occur when new features are launched or market changes.
Ecological construction risks: The ecosystem construction of the Sei chain is crucial and is affected by many factors including the developer community, partnership and the breadth of project applications. If the ecosystem construction is not sound enough, it may affect the long-term sustainable development of the Sei chain.
Sei chain development prospects
Innovative technical foundation: As a Layer 1 blockchain project focused on transaction optimization, Sei Chain has laid a solid foundation for the development of the ecosystem through its strong technical foundation and innovative features. The adoption of innovations such as parallel EVM technology and optimistic parallelization will allow the Sei chain to achieve significant advantages in performance, compatibility, and scalability.
Diversified execution environment: Sei chain not only focuses on EVM, but also provides a diversified execution environment through seamless interaction with Cosmwasm smart contracts. This makes the Sei chain more competitive in attracting various developers and projects. The diversity of the ecosystem will provide users with a wider range of options, from DeFi to NFT markets to gaming DEX, etc., all expected to thrive on the Sei chain.
Superior performance and user experience
Through parallel EVM technology, the Sei chain has achieved significant performance improvements when processing transactions. Test data shows that the peak TPS reached around 28,300. This will make applications built on the Sei chain more advantageous in terms of user experience, especially for scenarios such as high-frequency trading applications and decentralized exchanges, and will be able to provide faster and more efficient services.
Community activity and cooperative ecology: Sei Labs actively participates in the construction of the blockchain ecology and promotes community activity and cooperation by sponsoring and supporting hackathon activities and investing in ecological funds. Especially through cooperation with influential Japanese institutions, its influence in the Asian market has gradually increased. It is expected that there will be more online and offline activities in the future to strengthen community exchanges and promote the growth of blockchain technology around the world.
Ecological funds support innovative projects
Sei Chain has accumulated more than US$120 million in funds through ecological fund injection, providing important resources and support for innovative projects within the ecosystem. This will encourage more teams to establish projects on the Sei chain and promote the continuous expansion of the ecosystem. The introduction of ecological funds also enables Sei Chain to more effectively support and promote blockchain innovation.
in conclusion
In short, Sei, as a new generation of Layer 1 public chain, has emerged in the encryption field with its strong technical structure and financing support. Through its unique design that optimizes the trading experience, Sei is expected to occupy a certain position in the field of trading applications. However, investors should carefully assess the risks and pay close attention to the development of the project. With the continuous advancement of technology and the gradual improvement of the ecology, the future of the Sei chain is undoubtedly full of opportunities and challenges.