Sei (SEI)

Sei is a permissioned Layer 1 blockchain designed for trading

Basics

• Based in:
• Started in / Announced on:
• Testnet release:
• Mainnet release: 15-8-2023
• Not to be confused with Sui

Audits & Exploits

• Bug bounty program can be found [insert here].

Bugs/Exploits

• Someone found a black swan event type bug (4-2024):

"In April 2024, I found and reported two critical bugs to Sei Network concerning their layer-1 blockchain. One of these issues impacted the chain’s availability, and the other its integrity. The Sei Foundation awarded me $75,000 and $2,000,000 respectively for these reports.

Both issues were caught after the code had been audited, merged, and slated for release but before it was shipped to production. As a result, no funds were put at risk. If it had made it to mainnet, the funds at risk from issue 2 would have been the entire Sei token market cap, or about $1B USD mark to market."

Governance

Treasury

• Sei Foundation launched a $50 million Japan Ecosystem Fund (18-11-2024).
• Sei Foundation announced a $10m grants fund for the creation and growth of NFT and Social projects on Sei (5-4-2024).

Token

Utility

• The docs write about staking and voting (13-10-2022)

Technology

• Whitepaper or docs can be found here (28-10-2022).
• Code can be viewed [insert here].

Implementations

• Built on: Built using the Cosmos SDK and Tendermint Core
• Consensus mechanism: PoS, Twin-Turbo Consensus
• Algorithm:
• Virtual Machine: EVM
• Development language: Solidity

Transaction Details

• Capacity (TPS): 22000 (13-10-2022)
• Latency: 600ms (13-10-2022), finalizing blocks in 390ms (29-11-2023).

How it works

• From a deep dive by White Star Capital (26-10-2022):

"Sei is bringing on-chain orderbooks back in vogue. On-chain orderbooks are difficult to build compared to relatively simple smart contracts behind AMMs, and unlike off-chain orderbooks, recording not only every executed transaction but every order results in congestion, slower transactions, and higher fees. Sei, a permissioned Layer 1 blockchain optimised for DeFi, has tried to solve exactly that. It is tailored mainly for exchanges, and although it told me they had interest from AMMs and NFT marketplaces too, its built in central limit order book (CLOB) has made it primed for orderbook DEXs. Unlike order-book DEXs that are built on generic purpose blockchains (e.g. Serum and Solana), building an orderbook Layer 1 from scratch allows it to adapt the consensus mechanism and order sequencing and processing to optimise for trading. The very fact that it is a central on-chain orderbook (i.e. all resting orders and all executed orders are recorded on chain) also means that every dApp building on it, from live sports betting to complex options and futures exchanges, can share liquidity with one another. This has the potential to become a thriving ecosystem where smaller DEXs and newer tokens actually stand a chance."

• From their website (13-10-2022):

"Sei features a native order matching engine that any application can leverage to instantly spin up new markets."

Upgrades

• V2 will have EVM support, Optimistic parallelization & SeiDB (29-11-2023), V2 went live (27-5-2024).
• Can be found here (8-2022), all are testnet ones.

Staking

Validator Stats

Has only 39 validators (11-2024), which is low for parallelized chains (Aptos and Sui have a bit more than 100) and also low for cosmos chains, who have between 100 and 200.

Interoperability

• It is compatible with Cosmos’ Inter-Blockchain Communication (IBC) protocol (18-11-2024).
• Partnered with Multichain (11-10-2022).

Oracle Method

• Uses frequent batch auctioning to prevent frontrunning (13-10-2022).
• From the docs (8-2022):

"Sei has an Oracle module to support asset exchange rate pricing for use by other modules and contracts. When validating for the network, participation as an Oracle is expected and required in order to ensure the most reliable and accurate pricing for assets. For oracle pricing, the voting rounds have several steps to ensure integrity and consensus of pricing data prior to accepting the exchange rates as the source of truth. In each voting period, there are two aggregation steps that oracles must participate in."

Roadmap

• Can be found [Insert link here].

Revenue

• Quarterly revenue during 2023/2024 went from $19k to a high of $643k in Q4 2023 and then down to $37k in Q3 of 2024.

Usage

• From Messari (18-7-2024):

"On May 27, 2024, the Sei V2 upgrade went live, introducing three major upgrades to the network, namely EVM-compatibility. Since that day, Sei’s TVL has increased 229% to $95.3 million.

Sei beat Monad to market, becoming the first parallelized and EVM-compatible network to go live. Sei V2 resulted in a host of new DeFi protocols launching, the top two being:

• Yei Finance, Sei’s first borrowing and lending protocol, is a fork of Aave V3 and features SEI, USDT, and USDC for borrowing and lending.
• Dragon Swap, Sei’s first EVM-compatible DEX that became its top exchange, unseating Astroport.

Then, at the end of June, the top two introduced points programs, spurring further TVL growth.

• Yei Finance launched a points program on June 17, 2024.
• Dragon Swap launched a points program on June 25, 2024."

Projects that use or built on it

• Claims to have 50+ projects building on it. However, the website then says: "Built On Sei offers a comprehensive list of projects built on Serum and Solana." From Techcrunch (28-9-2022):

"So far, Sei’s ecosystem has over 50 teams, mainly coming from blockchains like Solana, NEAR, Polkadot and the defunct Terra, Feng shared. “They’re teams that have already raised venture funding and launched their applications, but felt that their current layer-1 ecosystems lacked what allowed them to really scale and provide the best user experience, which is why they came to us,” Feng said. “All of these teams came over without any incentives.”"

Pros and Cons

Cons

• A permissioned chain

Team, Funding and Partners

Team

• Full team can be found [here].
• Jeff Feng and Jay Jog; co-founders (29-9-2022)
• From their docs (9-2022):

"Sei Labs is comprised of three types of backgrounds:

1. Developers from Robinhood, Databricks, Airbnb, etc. with extensive expertise in orderbook design, infrastructure and the Cosmos stack
2. Cosmos OGs who have navigated the ecosystem for years
3. Finance and strategy members from Goldman Sachs and other market makers who bridge the gaps between DeFi and institutions"

Funding

• Had a strategic investment by Circle Ventures (15-11-2023).
• Sei Labs is raising Series A at $400 million token valuation (21-2-2023).
• From their website (13-10-2022):

Multicoin Capital, Coinbase, Delphi Digital, HRT, GSR, Flow Traders, Anchorage Digital's Nathan McCauly, 0xMaki, Sam Kazemian

• From Techcrunch (28-9-2022):

"Launched a $50 million ecosystem and liquidity fund to support new decentralized finance (DeFi) applications on its platform."

Partners

• Part of the Cross Chain Coalition (10-2022).

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