The Sei Litepaper, presented by Sei Labs, underscores the fundamental role of exchanging digital assets in the realm of cryptocurrencies. To propel the growth of Web3 adoption, it is essential to scale trading apps and exchanges. Sei, a Layer 1 blockchain designed specifically for trading, emerges as the optimal solution, offering unparalleled infrastructure for trading apps and exchanges.
The success of prominent Web3 applications hinges on their ability to facilitate trading and asset exchange. Trading encompasses a vast array of assets, extending beyond traditional candle charts and technical analysis to include tokens, NFTs, real-world assets, and metaverse assets. The value of cryptocurrencies like Bitcoin lies in their exchangeability. Notably, successful Web3 apps, such as Axie Infinity and StepN, incorporate trading functionalities that serve as core components of the user experience.
As the Web3 ecosystem continues to expand, the significance of trading is poised to experience exponential growth. The proliferation of digital assets and the continuous need for price discovery necessitate robust asset exchange mechanisms. Furthermore, the increased regulatory pressure on centralized exchanges (CEXs) is anticipated to drive more volume and activity on-chain, further fueling the demand for scalable trading apps.
The challenge lies in the scaling obstacles encountered by trading apps on existing Layer 1 and Layer 2 infrastructures, commonly referred to as the "Trading Trilemma." Sei aims to tackle this challenge head-on by providing purpose-built infrastructure optimized specifically for trading apps. If successful, Sei would eliminate the tradeoff between decentralization and user experience, offering the benefits of decentralization alongside a seamless trading experience.
Sei functions as an open-source Layer 1 blockchain designed to address the scalability concerns associated with trading. Its primary value proposition lies in being the fastest Layer 1 blockchain for trading, boasting optimized infrastructure for trading apps, gaming economies, NFT marketplaces, and DeFi DEXs. Sei sets itself apart by achieving the industry's fastest time to finality, leveraging Twin-Turbo consensus for enhanced performance. The platform incorporates a built-in matching engine, frontrunning prevention measures, and automatic order bundling capabilities, significantly improving app throughput and enhancing the overall user experience.
Initially, Sei Labs considered building Sei as a Layer 2 solution on Ethereum. However, due to concerns regarding decentralization and scaling difficulties, they opted to develop Sei as a Layer 1 blockchain instead. By focusing on trading as a universal need within the Web3 ecosystem, Sei aims to attract developers and users to explore the wide range of applications built on its platform. Numerous promising teams have already joined the Sei ecosystem, including projects transitioning from Ethereum, Solana, zkSync, Polygon, and Sui.
When comparing Sei to other prominent blockchains such as Bitcoin, Ethereum, and Solana, several key distinctions become evident. Bitcoin offers a limited transactional throughput of 10 transactions per second (tps) with a transactional finality of approximately 60 minutes. Ethereum exhibits a slightly higher transactional throughput of 20 tps with a transactional finality of around 6 minutes. Both Bitcoin and Ethereum lack inherent frontrunning prevention mechanisms and follow a sequential processing style. On the other hand, Solana delivers a significantly higher transactional throughput of 10,000 tps and achieves a transactional finality of approximately 2.5 seconds. Similar to Bitcoin and Ethereum, Solana does not feature native frontrunning prevention measures but adopts a parallelized processing style. Sei surpasses these blockchains by offering a transactional throughput of 20,000 operations per second (ops) and achieving a transactional finality of just 500 milliseconds. Notably, Sei incorporates frontrunning prevention mechanisms using FBA (Federated Byzantine Agreement) and employs a proof-of-stake for sybil protection. These comparisons highlight Sei's superiority in terms of transactional throughput and faster transactional finality, positioning it as a high-performance blockchain specifically tailored for trading applications.
Moreover, Sei's inclusion of frontrunning prevention mechanisms, indicated by the checkmark symbol, further enhances its suitability for trading. By leveraging FBA, Sei ensures a fair and secure trading environment for users. Additionally, Sei's parallelized processing style, similar to Solana, enables efficient handling of a large number of operations, contributing to its scalability and speed.
The adoption of proof-of-stake as the sybil protection mechanism adds an extra layer of security to Sei's infrastructure. Proof-of-stake consensus ensures that the network remains resilient against malicious actors while allowing token holders to participate in the consensus process, promoting decentralization.
Technical Attributes of SEI Network
SEI Network stands apart from other networks due to its distinctive features, offering a range of blockchain layer functionalities tailored for DeFi DApps to operate seamlessly on top of the network. These features include:
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CosmWasm and IBC: Enabling secure and efficient smart contract execution, alongside Inter-Blockchain Communication (IBC) for seamless interoperability.
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Local Order Matching Engine: Facilitating efficient order matching within the local network environment.
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Optimistic Block Generation: Accelerating the process of generating new blocks through an optimistic approach.
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Intelligent Block Propagation: Enhancing block propagation efficiency through intelligent mechanisms.
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Parallel Order Execution: Enabling simultaneous execution of multiple orders for improved processing speed.
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Prevention of False Starts: Implementing safeguards against false start scenarios for enhanced reliability.
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Oracle Pricing: Incorporating oracle solutions for accurate and timely price data.
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Order Bundling: Allowing orders to be bundled for more efficient processing.
These remarkable attributes empower SEI Network to achieve impressive throughput with minimal latency. The ongoing on-chain launch of Real World Assets (RWA) further bolsters the network's potential, offering a compelling narrative for the upcoming DeFi bull run. SEI strategically positions itself to capture Total Value Locked (TVL) through the final RWA on-chain migration, surpassing AppChain and other high-performance Layer 1 solutions. Tokenizing these assets involves intricate processes that may involve specialized agreements.
The industry-specific approach adopted by SEI ensures that tokenized protocols can access liquidity more readily compared to application-specific chains. Leveraging the parallelization capabilities of SEI, complex financial products can be designed using tokenized RWA. Furthermore, SEI's DEFI optimization elements grant institutional funds increased capital efficiency when compared to high-performance Layer 1 solutions.
Tokenomics
Sei, a Layer1 blockchain, has unveiled the tokenomics details for its native token $SEI. The maximum supply of $SEI is set at 10 billion tokens. Within this allocation, 48% of the tokens are dedicated to the Ecosystem Reserve, which comprises three components: Staking Rewards, Ecosystem Initiatives, and Airdrops and Incentives. Meanwhile, the Sei Foundation receives 9% of the supply, the Sei team obtains 20%, and private sale investors secure 20%. An additional 3% is allocated to Binance Launchpool.
Regarding Airdrops and Incentives, Sei has stated, "A portion of the $SEI supply is designated for airdrops, incentivized testnet rewards, and ongoing initiatives aimed at efficiently distributing $SEI to its user base and community. These $SEI Airdrops and Incentives are strategically designed to recognize and reward proactive, engaged, and pioneering users within the cryptocurrency sphere. Three percent of the $SEI token supply has been allocated to the inaugural rewards pool, known as 'Season 1'." Furthermore, Sei has affirmed that there will be no Initial Coin Offering (ICO) or community sale for $SEI.
Future Potential of SEI Network
As the native token of SEI Network readies itself for its listing on BingX, the project's future outlook is brimming with promise. Armed with its inventive approach and industry-specific orientation, SEI Network is poised to establish a distinct position within the realm of blockchain. By directly catering to the unique requirements of the trading sector, SEI Network holds the potential to emerge as the favored blockchain solution for global exchanges.
The impending listing on BingX will cast a spotlight on SEI Network, drawing interest from traders, investors, and experts in the field. As more exchanges embrace SEI Network's technology, the ecosystem will flourish, further augmenting the liquidity and intrinsic value of the SEI token.
