What is SEI (SEI)?

Sei is an open-source Layer 1 blockchain specifically designed to enable the fast, efficient, and decentralized exchange of digital assets across gaming, social platforms, NFTs, and decentralized finance (DeFi). It aims to solve major scaling and efficiency issues faced by current blockchain networks in supporting high trading volumes across these domains. Sei leverages technical innovations to offer industry-leading transaction speeds and throughput.

Trading and exchange functionalities are fundamental to most popular Web3 applications today, underpinning gaming economies, NFT marketplaces, and DeFi platforms. As more assets become digitized on blockchains and demand for trading grows exponentially, there is need for a base layer protocol optimized for exchange at scale. Sei looks to address current "exchange trilemmas" involve balancing decentralization, scalability, and capital efficiency. By building the first Layer 1 specialized for digital asset exchange, Sei focuses on scalability and performance improvements at every layer of the technology stack. The goal is providing the best-in-class infrastructure for the exchange of digital assets across Web3.

Sei offers fast finality, twin-turbo consensus, market-based parallelization, a native matching engine, and frontrunning protection.

History of SEI (SEI)

Who created SEI

Sei Labs is the core contributor team behind Sei, an innovative open-source Layer 1 blockchain optimized for high-performance trading and exchange of digital assets. As industry veterans from leading tech and fintech companies like Google, Goldman Sachs, Robinhood, Nvidia, and Databricks, the Sei Labs team brings deep expertise in scalable systems and financial infrastructure.

Led by co-founder Jayendra Jog, Sei Labs' mission is to build the best-in-class base layer infrastructure for trading across decentralized finance (DeFi), non-fungible tokens (NFTs), metaverse applications, and beyond. Sei uniquely focuses its chain-level optimizations, such as innovations in consensus and networking, specifically to enable the demands of high-frequency trading and exchange volumes.

History

• May 2022, Sei was announced - billed as "the fastest Layer 1 blockchain" optimized for decentralized exchanges and trading applications
• May 2022, Seinami incentivized testnet was planned to launch to test Sei's network prior to mainnet
• October 2022, $50M Sei Ecosystem and Liquidity Fund launched to support dApp development
• August 2023, Public mainnet beta "Pacific-1" launched

Design

Twin-Turbo Consensus

Full nodes receive and broadcast transactions to other nodes. Validators verify and add transactions to their local mempool. Block proposers create blocks with unique transaction identifiers and disseminate them to validators. The entire block is broken up and gossiped to the network. Validators reconstruct the block from their mempool or wait for all parts to arrive. This process reduces validator wait time. Validators use Tendermint BFT consensus for transaction ordering, including prevote, precommit, and commit steps before committing changes to the blockchain.

Validators in the Tendermint consensus receive and verify block proposals before proceeding to pre-vote steps. They concurrently process the first received block proposal optimistically, writing the candidate state to a cache. If the block is accepted by the network, data from the cache will be committed; if rejected, it will be discarded and future rounds won't use optimistic block processing.

Parallelization

Sei uses Cosmos SDK for the application logic. Validators process blocks using BeginBlock, DeliverTx, and EndBlock logic. Sei has configured parallel processing for DeliverTx and EndBlock to optimize transaction processing. State changes for most transactions occur during DeliverTx, but order matching engine transactions have their state changes applied during EndBlock to support frequent batch auctions. Parallelization is implemented in both DeliverTx and EndBlock for optimal performance.

Native Price Oracles

Sei has a native price oracle for asset exchange rate pricing. Validators act as oracles to ensure reliable and accurate pricing. Voting windows can be as short as 1 block, allowing for rapid updates. Validators propose exchange rates during the voting period, and a weighted median is calculated at the end to determine the true exchange rate. Non-participation and providing inaccurate data result in penalties for validators. Miss count tracks missed or inaccurate votes, and high miss counts lead to slashing penalties for misbehavior over time.

Native Order Matching Engine

Sei also provides a matching engine for decentralized exchanges built on top of Sei, allowing them to create their own orderbooks and facilitate trading. The matching engine does not require tokens to be traded and offers flexibility in representing assets. To prevent unfair practices, Sei's matching engine aggregates market orders and executes them at a uniform clearing price. Additionally, Sei offers multiple layers of order bundling for improved user experience and performance.

Tokenomics

Sei is a decentralized blockchain powered by the SEI token. The token has multiple functions, including paying for transaction fees, staking for network security, participating in governance, providing liquidity or collateral to applications on the Sei blockchain, and serving as trading fees for exchanges on the platform.

Total Issuance

The total supply of SEI is capped at 10 billion tokens

Distribution

• Ecosystem Reserve (48%): A significant portion of SEI tokens is allocated to the Ecosystem Reserve, which includes staking rewards for validators and their role in securing the Sei blockchain. SEI tokens will also be distributed through grants and incentives to contributors, builders, validators, and other network participants. Additionally, a portion of the token supply is allocated to airdrops, incentivized testnet rewards, and ongoing programs aimed at distributing SEI to users and the community. Three percent of the token supply is allocated to "Season 1" rewards pool.
• Foundation Treasury (9%): Operations of the Sei Foundation.
• Launchpool - 3%
• Team - 20%
• Private Sale Investors - 20%

Highlights

• August 2022

Sei raised $5M in funding from investors including Multicoin Capital, Coinbase Ventures, and others

Partnership with Axelar announced to enable cross-chain messaging between Sei and other chains

• September 2022

Partnerships announced with White Whale and KYVE Network

• November 2022

Partnerships with Coin98 wallet and Frontier wallet announced

• December 2022

Integration with Gravity Bridge announced for asset transfers between chains

• February 2023

Sushi announces acquisition of Vortex and plans to launch perpetuals exchange on Sei mainnet

• April 2023

Sei Labs raises additional $30M in funding, bringing total raised to over $35M

• November 2023

Circle Ventures has invested in Sei, a fast blockchain that aims to unlock new possibilities for Circle's USDC stablecoin.