tl;dr
- Sei was founded in 2022 by Dan Edlebeck and Jayendra Jog and has gained support from notable investors and partnerships with Circle, Coinbase, and Delphi Digital.
- The Sei Network employs a Twin-Turbo consensus mechanism to improve blockchain efficiency.
- Twin-Turbo consensus reduces block finality to around 380 milliseconds through intelligent block propagation and optimistic block processing.
- Sei includes an in-built order placement and matching engine at the Layer 1 level and incorporates a native price oracle for accurate asset valuations.
- Sei is useful for high-frequency trading, DEXs, and scalable, efficient transactions, featuring built-in order books, fast block finality, and parallel order execution.
What is SEI Blockchain?
Blockchain development has experienced significant growth in recent years, marked by the rise of both Layer 2 solutions and new Layer 1 blockchains. L2s have gained traction as they enhance scalability and reduce transaction costs on existing L1 blockchains, like Ethereum, without compromising security. Examples include zk-rollups and optimistic rollups, which process transactions off-chain and then bundle them for final settlement on the main chain.
Parallel to this, several new L1 blockchains have emerged, each aiming to address the scalability limitations inherent in established networks like Ethereum. These new L1 chains often prioritize speed and efficiency, sometimes at the expense of decentralization. Solana, for instance, has gained widespread popularity due to its high throughput and low transaction fees, making it an attractive option for developers and users alike. Other noteworthy L1s include Aptos and TON, both of which offer unique scalability solutions and innovative features.
Sei is another significant new player in the L1 blockchain space. It focuses on providing high-performance and efficient transaction processing, catering specifically to DeFi applications and traders. In this post, we will explore Sei and how it works.
SEI Background and Backers
Sei Network was founded in 2022 by Dan Edlebeck and Jayendra Jog. Dan Edlebeck, an entrepreneur and thought leader in the crypto space, co-founded Sei Labs, as well as Deedle Connects and Exidio. SEI is Jayendra Jog's first project in the crypto space, but he has a background in computer science and work experience at the trading app Robin Hood.
Sei has attracted several big-name investors, including Jump Crypto, Distributed Global, Multicoin Capital, Asymmetric Capital Partners, Flow Traders, Hypersphere Ventures, and Bixin Ventures. Additionally, Sei has established partnerships and collaborations with notable entities such as Circle, Coinbase, and Delphi Digital, solidifying its position in the blockchain industry.
How does SEI Blockchain Work?
The Sei Network employs a Twin-Turbo consensus mechanism to enhance blockchain efficiency and improve block finality. This, combined with its built-in order book and matching engine, ensures a more efficient, transparent, and user-friendly trading experience.
Twin-Turbo Consensus
The Twin-Turbo consensus is built on Cosmos’ Tendermint consensus. Tendermint offers ‘single slot finality,’ providing instantaneous block finalization with a 6-second finality time, significantly reducing the waiting period to finalize blocks. Typically, block proposers create a block and distribute it to validators, who then wait to receive all relevant data to reach a consensus, a process that takes about 13 minutes on most blockchains.
The Twin-Turbo Consensus reduces block finality to around 380 milliseconds by employing intelligent block propagation and optimistic block processing.
Intelligent Block Propagation
Unlike most blockchains that communicate all transaction details during block propagation, SEI transmits compressed block proposals that include only transaction hashes, not full transaction details. This method avoids unnecessary waiting time and increases transaction throughput by over 40%.
Optimistic Block Processing
SEI skips the traditional pre-vote and pre-commit steps, directly finalizing blocks. Validators process transactions optimistically when they receive a block proposal, rather than waiting for the pre-commit stage to end. If any blocks are invalid, validators delete them from the cache, significantly speeding up transactions.
Built-in Order Book and Matching Engine
Sei includes an in-built order placement and matching engine at the Layer 1 level, enabling the development of on-chain order book-based crypto exchanges. This chain-level engine helps developers build a Central Limit Order Book (CLOB) system for decentralized trading platforms, offering a cost-effective, transparent, and capital-efficient trading method compared to Automated Market Makers.
Native Price Oracle
Sei incorporates a native price oracle, providing accurate real-world data and asset valuations. This helps validators agree on correct asset prices before executing transactions and adding them to the blockchain.
Parallel Order Execution and Single Block Order Execution
Parallel order execution allows Sei to process orders from independent markets simultaneously, maximizing transaction throughput. Single-block order execution benefits high-frequency traders by enabling them to place and execute orders within a single block.
Order Bundling
Order bundling enhances trading efficiency by aggregating orders, offering a cost-saving mechanism for managing trades, and allowing market makers to update token prices on multiple markets in one go.
What Makes SEI Unique
Sei Network's distinctiveness lies in its focus on scalability and trader-centric features. It employs the Twin-Turbo consensus mechanism, an advanced version of Cosmos’ Tendermint, which reduces block finality to around 380 milliseconds through intelligent block propagation and optimistic block processing. This enhances transaction speed and efficiency, crucial for high-frequency trading.
Sei also integrates an in-built order placement and matching engine at the Layer 1 level, facilitating the development of on-chain order book-based exchanges. This enables a transparent, cost-effective, and capital-efficient trading method compared to traditional AMMs.
Moreover, Sei incorporates a native price oracle, ensuring accurate asset valuations and real-time data for validators. Its parallel order execution and single-block order execution features cater specifically to high-frequency traders, allowing them to place and execute orders rapidly within a single block. By combining these innovations, Sei offers a unique and highly optimized environment for decentralized trading.
What Sei Useful for?
The Sei Network is useful for high-frequency trading, DEXs, and scalable, efficient transactions. It features built-in order books, fast block finality, parallel order execution, and an integrated price oracle, making it ideal for DeFi applications requiring speed, accuracy, and efficient liquidity management.
The SEI Ecosystem
The Sei ecosystem boasts a vibrant array of dApps, enhancing its blockchain's versatility. Key players include DragonSwap, a leading DEX; Ankr, which provides liquid staking services; and Sei Name Service, which enables human-readable addresses.
Final Thoughts
Sei's unique features, such as its Twin-Turbo consensus and built-in orderbook, make it stand out in the crowded L1 blockchain space. With its focus on scalability and efficiency, Sei's ecosystem is poised for continued growth and innovation.
