What is Sei Network

Sei Network is a Layer 1 blockchain built for digital asset exchange. It recently launched its own token SEI, which has caused quite a stir. So, what exactly is Sei Network? This guide will cover everything you need to know about Sei in 5 minutes.

The Sei team believes that exchanges are the most important infrastructure in the crypto market. Most applications in the crypto space are some form of exchange. Exchanges are not only essential in DeFi but also indispensable in gaming, NFTs, and other use cases. For example, games like StepN and Axie Infinity rely on in-game exchanges to provide a Play-to-Earn experience. Everything in the crypto world ultimately comes back to exchanges.

However, existing Layer 1 blockchains cannot support an efficient on-chain exchange. They process transactions too slowly. Meanwhile, centralized exchanges offer a good experience but are ultimately centralized products, whereas decentralization is one of the core principles of crypto. Sei aims to solve the current dilemma faced by crypto exchanges and build a decentralized exchange that offers a centralized-like experience.

Sei designs each layer of its tech stack to optimize the exchange functionality of executing trades. According to Sei, they have only one value proposition: any exchange—whether it’s a DeFi DEX, NFT marketplace, or gaming DEX—performs better on Sei than on any other Layer 1 network. Sei is built with Cosmos SDK. However, unlike Cosmos application chains like Osmosis, which are tailored for specific applications, Sei is a general-purpose blockchain suitable for any trading application.

Sei stands out in five ways:

One of the fastest

Sei claims to be the fastest blockchain, with confirmation times as short as 300 milliseconds to 600 milliseconds, and can process up to 22,000 orders per second. Based on these figures, Sei is five times faster than Solana and 700 times faster than Ethereum, making Sei comparable to centralized exchanges in order execution speed and much better than current DEX products on the market.

Twin-Turbo Consensus

Sei has developed its proprietary Twin Turbo Consensus mechanism, which combines optimistic block processing with intelligent block propagation, building on the Tendermint consensus of Cosmos zone chains, increasing speed by 83%. This improvement allows Sei to deliver faster block times, lower latency, and higher finality, which are crucial for on-chain order book-based exchanges.

The so-called Twin Turbo consensus includes two parts:

Intelligent Block Propagation

Intelligent Block Propagation improves block processing efficiency and allows Sei to accelerate processing when necessary, increasing overall throughput by 40%.

It enables block proposers to send compressed block proposals containing only transaction hashes, without detailed block content. Tests show that in most cases, due to Sei’s propagation mechanism, validators already have the full transaction data in their local mempool, so they don’t need the full proposal from the block proposer. Validators receiving the compressed proposal can reconstruct the original block using their local mempool records. If the transaction isn’t in their mempool, they can wait for the uncompressed detailed proposal. This method significantly boosts block processing speed while ensuring transaction validity.

Optimistic Block Processing

Source: sei.io

Sei’s development team has created a new block processing algorithm called optimistic block processing, designed to significantly improve block times and overall throughput. This algorithm skips the pre-vote and pre-commit steps of Tendermint consensus, allowing validators to directly invoke the block confirmation function for faster validation and voting. Unlike traditional blockchains, where block proposals must be processed sequentially, this approach allows Sei to process block proposals concurrently with pre-vote and pre-commit steps, increasing throughput by 33%.

Market-based Parallel Execution

Market-based parallel execution boosts Sei’s block production speed to 5-10 times that of most high-performance blockchains.

Most blockchains process transactions sequentially, meaning transactions are handled in the order they are received by validators.

Sei’s strategy differs. On Sei, orders from different independent markets can be processed in parallel, while orders within the same market are still processed sequentially. Load testing shows that this modification results in shorter block times, lower latency, and better performance at all load levels. The improvements are especially noticeable under higher loads.

Source: sei.io

Native Order Matching Engine

Sei has built a native order submission and matching engine. Developers building applications on Sei can leverage this engine to easily create order book-based exchanges, adopting the centralized limit order book (CLOB) system common in centralized exchanges. Order book-based exchanges on Sei will be faster and more efficient than traditional AMM-based decentralized exchanges.

Specifically, Sei’s native order matching engine includes several unique features:

Single-Block Order Execution

Sei’s single-block order execution allows users to place and execute orders within a single block. In contrast, traditional order book platforms like Serum require users to place and execute orders across multiple blocks. This makes trading on Sei faster and more efficient. This feature is especially useful for high-frequency traders needing rapid order execution.

Order Bundling

Through order bundling, Sei allows market makers to update prices across multiple markets in a single transaction. This simplifies trading workflows and enables market makers to provide liquidity more effectively. Bundling orders offers a lower-cost solution for market makers to manage their trades.

Native Price Oracle

The native price oracle is integrated into Sei’s base layer, ensuring that on-chain asset prices are accurate and reliable. Sei’s oracle requires validators to reach consensus on prices before submitting transactions. In other words, blocks are not built until all validators agree on the price, ensuring price accuracy.

Front-Running Protection

Sei eliminates MEV issues like front-running by batching transaction orders. At the end of each block, Sei aggregates all market orders and clears them at the same price, preventing some traders (such as MEV bots) from placing orders ahead of others, thus increasing market fairness. This feature also helps prevent slippage caused by large individual trades by reducing their market impact. Frequent batch execution provides users with a secure, reliable, and fair trading experience. **$ROSE **$SEI