As a new generation Layer1 public chain, Sei has emerged in the field of cryptocurrency with its powerful technical architecture and financial support.

Author: Hotcoin Research Institute

At the beginning of the 2024 New Year, Sei's native token SEI became one of the most talked-about tokens, with its price skyrocketing by 75% in just one week. The Sei chain ecosystem has also become a hot topic in the cryptocurrency community.

I. Introduction to Sei Chain

Sei is a universal 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, as low as 300 milliseconds. Sei introduces the built-in Order Matching Engine (OME) to help trading applications scale and effectively combat MEV (Maximum Extractable Value) through front-running prevention. As a new generation Layer 1 public chain, Sei successfully launched its mainnet in August 2023, quickly gaining widespread attention.

Sei began to attract attention in 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 the adoption of parallel EVM technology for an upgrade to version 2 this year. This technology 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.

II. Mechanism Principles and Features of Sei Chain

1. Dual Turbine Consensus Mechanism

Sei adopts a dual turbine 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 as soon as they receive the first block proposal at 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 introduces a native order matching engine that not only limits 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 also introduces native price oracles, transaction order bundling, and other innovations, 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.

III. Top 10 Representative Projects of Sei Chain

IV. Investment Risk Analysis of Sei Chain Projects

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 cryptocurrency market. Investors need to carefully assess these factors and closely monitor the project's development.

1. Technical Implementation Risk

Despite introducing a series of innovative features, such as parallel EVM and optimistic parallelization, Sei Chain may face technical challenges during the development process, such as performance tuning, security issues, and integration 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

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

4. Ecosystem Development Risk

The development 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. Inadequate ecosystem development may impact the long-term sustainability of Sei Chain.

V. Prospects for the Development of Sei Chain

1. Innovative Technical Foundation

As a Layer 1 blockchain project focused on trade optimization, Sei Chain has laid a solid foundation for ecosystem development through its powerful technical base 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 diversified execution environment through seamless interaction with Cosmwasm smart contracts. This makes Sei Chain more competitive in attracting developers and projects of all kinds. The diversity of the ecosystem will provide users with a wider range of choices, from DeFi to NFT markets, and game DEX, all of which are expected to thrive on Sei Chain.

3. Superior Performance and User Experience

Through parallel EVM technology, Sei Chain has achieved significant performance improvements in transaction processing, with peak TPS reaching around 28,300 according to test data. 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 development of the blockchain ecosystem, promoting community activity and collaboration through sponsorships, support for hackathons, and investment in ecosystem funds. Particularly through collaboration 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 to enhance community interaction and drive the growth of blockchain technology globally.

5. Ecosystem Fund Supporting Innovative Projects

Sei Chain has accumulated a fund of over $120 million through ecosystem funding, 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 field of cryptocurrency with its powerful technical architecture and financial 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 project's development.

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