is a sector-specific layer-1 chain
optimized for trading
. Sei promises lightning-fast transaction finality of 600ms and 22,000 orders per second. It has been dubbed the “Decentralized NASDAQ” for its focus on providing a CeFi trading experience with DeFi
CoinMarketCap Alexandria takes a deep dive into Sei and its pitch of giving “exchanges an unfair advantage.”
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Sei is an L1 chain built with one purpose: to become the chain for new decentralized exchanges
(DEXs) across DeFi
and gaming. It is built with the Cosmos
SDK, allowing it to be sector-specific and focused on trading. However, unlike the app-specific blockchains (like dYdX
) of the Cosmos ecosystem
that build a blockchain for only one application, Sei is a blockchain for many applications that are all within a sector — DEX applications
. It aims to achieve its ambitious goals with improvements in three main areas: performance, security, and interoperability
Read: Deep Dive into the Cosmos Ecosystem.
Sei promises lightning-fast transaction finality of 600ms. This would put Sei on par or competing with centralized exchanges
(CEXs) in terms of executing orders, and better than current DEXs in the market. The fast throughput
of the blockchain is also vital to its native order matching engine model that is to replace the traditional AMM
Comparing to other general purpose chains like Bitcoin
, this is what Sei claims to offer:
On the security side, Sei relies on the Tendermint Core consensus mechanism
backing the Cosmos ecosystem. By using frequent batch auctions, Sei promises to prevent MEV
. This allows apps on Sei to use its validators
and guarantee a smooth trading experience for customers.
Sei is also partnering with several protocols to maximize interoperability
. For example, it announced a partnership with Axelar
, a cross-chain infrastructure provider that will improve bridging
, communication with other protocols, and capital movement to and from other blockchains.
Sei Network was founded by Jeffrey Feng and Jayendra Jog and boasts more highly-experienced team members with work experience from companies like Airbnb and Goldman Sachs.
It raised $5 million in a funding round led by Multicoin Capital with participation from Coinbase Ventures, Delphi Digital, Hudson River Trading, GSR, Hypersphere, Flow Traders, Kronos Research and the founders of Anchorage, Frax, Yield Guild Games and Tangent.
Moreover, Sei recently announced a $50 million ecosystem and liquidity fund to introduce liquidity and incentivize dApps to build, with participation from top venture capital firms, market makers and exchanges like Multicoin Capital, Delphi Digital, Hudson River Trading, GSR, Flow Traders, MEXC, Kronos, Hypersphere and several others.
Before diving into the tech behind Sei, we need to clarify which problems the blockchain solves:
1. General-purpose chains like Ethereum
don’t optimize for specific use cases like decentralized exchanges
. This holds back their development.
2. You can’t build an order book
model exchange on a general-purpose chain because it is too congested.
3. General-purpose L1s are too slow and can’t offer the trading experience that centralized exchanges offer.
Sei argues that DeFi is split into two camps: either protocols built on general purpose chains like Ethereum
or protocols that have their own app-chain like Osmosis (OSMO
). Sei aims for the sweet spot between those two: a sector-specific chain that maximizes for decentralized exchanges.
Technically, this is made possible with several innovations.
First, Sei offers front-running prevention
by executing orders with frequent batch auctioning. One of the main pain points of DEXes is that orders either are not processed on-chain or overload most blockchains if they are processed on-chain or are processed on-chain on a fast blockchain that sacrifices either decentralization or security (the Blockchain Trilemma
). Instead of executing orders one by one, Sei aggregates orders at the end of the block and executes them at the same time, thereby preventing front-running.
Sei also uses native price oracles
that provide reliable data feeds and minimize external dependencies. Unlike other DEXes, it leverages single-block order execution
. Instead of dealing with the placement and execution of an order in two transactions, Sei does so in one. Moreover, it bundles orders on multiple levels, allowing market makers and pro traders to minimize gas costs.
All this allows Sei to go at the market with its “decentralized NASDAQ” value pitch. Most decentralized exchanges solve the previously mentioned problems by deploying an automated market maker (AMM) for users to trade against. However, with CEXes still holding over 90% of the trading volume, that solution evidently has not impressed the market. Sei promises that its tech stack makes an order book model possible, which it dubs the Centralized Limit Order Book (CLOB).
In short, the goal is to enable high-frequency trading with off-chain speed while retaining on-chain security.
The Sei protocol is still in its ‘’Seinami’’ incentivized testnet
stage and is yet to announce a Sei token or a Sei token airdrop
Despite being still at an early stage of its development, Sei already boasts several partners in its ecosystem.Here is the full public Sei ecosystem market map at the moment (20 announced).
is a decentralized exchange for derivatives
for IBC chains. Similar to Sei, it aims to provide DeFi services like borrowing and lending and cross-margining with the user experience of centralized exchanges.
Pharaoh Protocol allows users to create synthetic assets
in a decentralized manner. Users can trade real-world assets without owning or transacting them, simply by trading oracle-powered asset prices.
is a secure cross-chain communication protocol built on proof-of-stake. It will enable bridging, messaging, and execution across different IBC chains.
is a trustless, omni-chain synthetic asset protocol. Users can create and trade onchain derivatives of numerous financial assets, such as crypto, equities, currencies, bonds and commodities, using smart contracts.
allows data providers to standardize, validate, and permanently store blockchain data streams. It creates backups of existing data and leverages data storage solutions like Arweave
to provide scalable and immutable data backup solutions.
White Whale is a cross-chain arbitrage
protocol that establishes cross-chain liquidity pools to facilitate arbitrage trades. Its liquidity pools function as automated market makers and enable trading bots to arbitrage with ecosystem DEXes.
is a fully collateralized decentralized stablecoin
backed by derivatives to provide a stable, capital-efficient, and decentralized stablecoin. Originally deployed on Solana, it is the first Cosmos-native stablecoin integration.
is a Solana
virtual machine chain that enables developers to launch Solana dApps on IBC blockchains.
is an application-specific blockchain built to offer multi-chain, fully autonomous exchange-traded funds built using the Cosmos SDK.
is a non-custodial wallet for IBC chains with integrated staking
, and DeFi functionality that users can conveniently use as a browser extension.
is a popular non-custodial
open-source wallet for IBC blockchains that allows users to store funds and interact with different chains in the IBC ecosystem.
is an infrastructure solution built for cross-chain interactions, and claims to be the “ultimate router for web 3.0.” Formerly known as Anyswap, it supports interoperability over 72 chains and 3000 tokens. Multichain announced an integration with Sei on Oct. 11, 2022.
is a crypto “Super App” — a decentralized application that offers DeFi features like wallet, token swop, staking and more. Coin98 announced an integration with Sei Network, allowing users to create a Sei wallet and join the incentivized testnet.
is building the first “layer 1.5 base layer infrastructure for prediction markets” on Sei Network. Layer 1.5 is the base layer with additional features for dApps with specific use-cases — in this case, prediction markets across the world, especially the less-accessible local markets.
is a non-custodial DeFi wallet that supports over 40 chains and hardware wallets from Trezor and Ledger. Users can trade, store, purchase and invest in crypto and NFTs, and the integration with Sei Network will connect users from other leading ecosystems like Ethereum, Polygon, Arbitrum, BNB Chain and more.
is a fiat on/off-ramp infrastructure provider. It claims that their “on/off-ramp-as-a-service can be integrated in less than 10 minutes.” This will allow Sei’s dApps users to use ACH, wire, credit cards from Visa and Mastercard to buy and sell crypto in over 150 countries.
is a decentralized financial derivatives platform that features an off-chain aggregation and on-chain settlement design, combining the security and transparency of a decentralized exchange with the speed and usability of a centralized exchange
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