Introducing Sei: The Layer 1 (L1) Blockchain Built Using the Cosmos SDK

Sei stands as a layer-1 blockchain meticulously crafted to bolster the burgeoning decentralized finance (DeFi) sector. Engineered using the Cosmos SDK, Sei is seamlessly integrated into the broader Cosmos ecosystem through the Inter-Blockchain Communication (IBC) protocol. Its consensus mechanism is secured by Tendermint, underscoring its commitment to robustness and reliability. The Sei execution layer interfaces with the Tendermint core through ABCI++, a forthcoming enhancement to the Cosmos Application Blockchain Interface (ABCI) that introduces bespoke optimizations tailored to the consensus engine's requirements.

How Sei Operates

Sei, a Layer 1 blockchain constructed with the Cosmos SDK, is dedicated to efficiently facilitating trading and various other activities within the cryptoeconomy. At its core lies the innovative Twin Turbo consensus mechanism. This mechanism employs full nodes that utilize random gossiping to disseminate transactions. Validators then validate these transactions and add them to their local mempools. Block proposers subsequently utilize these mempools to suggest new blocks, embedding only transaction identifiers to minimize data loads and reduce latency. Sei is currently on the cusp of its V2 network upgrade, which will introduce parallel execution, enabling concurrent processing of transactions rather than sequential execution.

The Significance of Parallel Execution

Parallel execution is a groundbreaking advancement that allows multiple transactions to occur simultaneously. This approach can dramatically enhance processing speed, enabling Sei to facilitate thousands of transactions concurrently. While many blockchains, including Bitcoin and Ethereum, do not employ parallel execution, the resurgence of interest in projects like Solana, which utilize parallelism, has propelled Sei into the limelight in early 2024.

The Pulse of Sei

As per DeFiLlama, Sei presently ranks as the 64th largest chain in DeFi, boasting a Total Value Locked (TVL) of $18.53 million. While the network's application ecosystem is still evolving due to its relative novelty, prominent projects like Astroport, Kryptonite, Silo, and Pallet are already operating on Sei, offering decentralized exchange services, liquid staking protocols, and an NFT marketplace, respectively.

The SEI Token

The native token of Sei, $SEI, serves various purposes within the ecosystem, including governance participation and transaction fee payment. Additionally, $SEI holders can engage in securing the network by delegating tokens to validators or staking them to operate validator nodes. With a capped total supply of 10 billion tokens, a significant portion of $SEI is allocated to the community and developers on Sei. At the latest update, $SEI was trading around $0.83 with a market capitalization of $2.1 billion, making it the 49th largest cryptocurrency.

Staking SEI

Staking SEI presents an opportunity to earn rewards, currently offering a 4.3% Annual Percentage Rate (APR), while contributing to the security of the Sei network. Interested participants can acquire SEI from exchanges like Coinbase or Kraken, create a Sei wallet compatible with platforms like Compass and Fin, and stake their tokens through the main Sei Staking App or liquid staking protocols like Kryptonite and Silo via wallets like Keplr.

Zooming Out

As Sei prepares for its V2 upgrade, heralding the advent of the first fully parallelized Ethereum Virtual Machine, the cryptoeconomy awaits with bated breath. Will Sei's pioneering status attract a plethora of new DeFi projects, or will it struggle amidst fierce competition from numerous Layer 1 and Layer 2 solutions? The answer remains uncertain, but one thing is clear: Sei's journey has only just begun, and overlooking its potential in the coming year would be unwise.