1. Introduction to Sei Chain

Sei is a general-purpose open-source Layer 1 blockchain that focuses on efficient trading of digital assets. Its core goal is to provide the industry's shortest transaction latency, which can be as low as 300 milliseconds. Sei has introduced a built-in order matching engine (OME) to help trading applications achieve scalability and effectively combat MEV (Maximal Extractable Value) through front-running prevention mechanisms. As a new generation Layer 1 public chain, Sei successfully launched its mainnet in August 2023, quickly attracting widespread attention.

The time when Sei began to attract attention can be traced back to August 2022, when Sei Labs announced the completion of a $5 million seed round of financing. This round of financing was led by well-known institution Multicoin Capital, with participation from Coinbase Ventures, GSR, and others. In April 2023, Sei announced another round of financing, reaching a valuation of $800 million. Investors such as Multicoin Capital and Jump Capital continued to support Sei, indicating confidence in the project's prospects. At the end of November 2023, Sei announced that it would adopt parallel EVM technology for upgrade this year, with the version being upgraded to v2. This technological upgrade is considered a key focus for 2024 by multiple investment research institutions.

According to CoinMarketCap data, as of January 8, 2024, Sei Chain's TVL has exceeded $2.6 billion.

2. Mechanism Principles and Features of Sei Chain

1. Dual Turbo Consensus Mechanism

Sei adopts a dual turbo consensus mechanism aimed at optimizing block propagation and transaction processing. This mechanism includes intelligent block propagation and optimistic block processing. Intelligent block propagation improves transaction processing efficiency by reducing the total time validators wait to receive blocks. Optimistic block processing allows validators to begin processing transactions simultaneously upon receiving the first block proposal of any height, further enhancing performance.

2. Parallel Processing

Sei implements parallel processing, divided into DeliverTx transaction parallel processing and market-based parallel processing. This makes Sei more efficient in processing transactions, particularly significant for decentralized exchanges and other applications.

3. Native Order Matching Engine

Sei has introduced a native order matching engine, which not only limited to token trading but also provides a flexible interface allowing decentralized exchanges to customize asset representation. This engine provides a powerful and efficient trading infrastructure by handling aspects such as cancel orders, limit orders, market orders, and more.

4. Other Protocol-Level Improvements

Sei has also introduced innovations such as native price oracles and transaction order bundling, enhancing its functionality and performance. Price oracles are used to support asset exchange rate pricing, while order bundling improves user experience and performance through multi-level bundling. Additionally, Sei provides flexibility in transaction fees, allowing decentralized exchanges to customize transaction fees.

3. Top 10 Representative Projects of Sei Chain

4. Investment Risk Analysis of Sei Chain

Despite significant progress in technology and financing, investing in Sei still carries certain risks. Potential risks include market volatility, uncertainty brought by technological upgrades, competitive pressure, and regulatory risks in the overall crypto market. Investors need to carefully assess these factors and closely monitor the project's development.

1. Technical Implementation Risk

While Sei Chain has introduced a series of innovative features such as parallel EVM and optimistic parallelization, the implementation of new technologies always comes with certain risks. The project may face technical challenges during development, such as performance tuning, security issues, and integration issues with other ecosystems.

2. Market Competition Risk

The blockchain industry is highly competitive, with competition from other Layer 1 projects. Projects like Ethereum and Solana have already established themselves in the market, and Sei Chain needs to find its position in this fiercely competitive environment.

3. Market Volatility

The Sei token has experienced significant price fluctuations in the short term, which may be influenced by market sentiment and short-term speculative factors. Investors need to be cautious of token price volatility, especially during the launch of new features or market changes that may lead to significant price fluctuations.

4. Ecosystem Construction Risk

The construction of Sei Chain's ecosystem is crucial and is influenced by various factors such as the developer community, partner relationships, and the breadth of project applications. If the ecosystem construction is not robust enough, it may affect the long-term sustainable development of Sei Chain.

5. Prospects for the Development of Sei Chain

1. Innovative Technological Foundation

As a Layer 1 blockchain project focusing on transaction optimization, Sei Chain has laid a solid foundation for ecosystem development through its strong technological foundation and innovative features. The adoption of parallel EVM technology and optimistic parallelization will give Sei Chain significant advantages in performance, compatibility, and scalability.

2. Diversified Execution Environment

Sei Chain not only focuses on EVM but also provides a seamless interaction with Cosmwasm smart contracts, offering a diversified execution environment. This makes Sei Chain more competitive in attracting developers and projects of various kinds. The diversity of the ecosystem will provide users with a wider range of choices, with prospects for development in areas such as DeFi, NFT markets, and game DEX on Sei Chain.

3. Superior Performance and User Experience

Through parallel EVM technology, Sei Chain has achieved significant performance improvements in transaction processing, with test data showing a peak TPS of around 28,300. This will provide applications built on Sei Chain with a competitive edge in user experience, especially for high-frequency trading applications and decentralized exchanges, offering faster and more efficient services.

4. Active Community and Collaborative Ecosystem

Sei Labs actively participates in the construction of the blockchain ecosystem, promoting community activity and collaboration through sponsorship and support for hackathons, investment in ecosystem funds, and more. Particularly through cooperation with influential Japanese institutions, its influence in the Asian market is gradually strengthening. It is expected that there will be more online and offline activities in the future to enhance community communication and drive the growth of blockchain technology globally.

5. Ecosystem Fund Supports Innovative Projects

Sei Chain has accumulated a fund of over $120 million through the ecosystem fund, providing important resources and support for innovative projects within the ecosystem. This will encourage more teams to build projects on Sei Chain, driving the continuous expansion of the ecosystem. The introduction of the ecosystem fund also enables Sei Chain to more effectively support and promote blockchain innovation.

In conclusion, as a new generation Layer 1 public chain, Sei has emerged in the crypto field with its strong technical architecture and financing support. Through its unique design for optimizing the trading experience, Sei is expected to establish a certain position in the field of transactional applications. However, investors should carefully assess the risks and closely monitor the development of the project.

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