Analysis of the High-Performance Public Chain Sei Network and Its Ecosystem

After a few months of silence, the Sei Network, which launched its mainnet in August 2023, has begun to surge, with its token price continuing to rise sharply and reaching an all-time high. Currently, Sei's liquid staking has surpassed $3.5 million, and the network's TVL has exceeded $11 million. Previously, Sei successfully held a hackathon that attracted numerous developers to participate.

Sei is about to undergo an important V2 upgrade, enhancing parallel processing performance and introducing EVM. This article will analyze the code, technical features, and ecosystem projects of Sei Network, helping readers understand the potential opportunities of Sei and its ecosystem.

Sei Design Features

As a Layer 1 that supports order book activities and focuses on trading, Sei provides a built-in Central Limit Order Book (CLOB) module. Developers can leverage Sei's built-in order module to quickly launch and customize various order book trading applications, while Sei's parallel design provides a fast and high-throughput network for its ecosystem applications.

Sei improves the processing speed of blockchain networks in the following ways:

1. Local Build Hash

Sei allows validators to send blocks to the network that only contain transaction hashes. Other validators, upon receiving them, will first construct blocks based on their local memory pool records. If the memory pool does not have the corresponding transaction information, the validator will wait for subsequent blocks containing detailed transaction content to arrive for verification.

2. Parallel Transaction Processing

Sei Network reduces latency and increases throughput by allowing validators to process pre-votes and pre-commits of blocks in parallel.

In the code implementation, Sei will process transactions either in parallel or sequentially. For multiple related transactions, Sei will process them sequentially; for unrelated transactions, it will process them in parallel.

Sei processes multiple transactions in parallel using Golang's goroutines. Currently, this design cannot handle too many transactions in parallel; for example, processing thousands of transactions simultaneously may lead to consistency issues. Therefore, Sei V2 needs to continue upgrading in parallel processing.

Parallel EVM

What is parallel EVM?

EVM is the virtual machine that processes smart contract-related transactions on Ethereum. To ensure network security, EVM transactions must be executed sequentially. Although this design avoids the complexity and conflicts of parallel execution, it also limits network performance.

Parallel EVM allows different transactions to occur simultaneously, greatly improving the processing speed of EVM and network throughput. The current solutions involve using high-performance new public chains compatible with EVM such as Solana, Aptos, and Sei. Among them, Sei's parallel EVM has garnered the most market attention.

Sei V2 upgrade

The upcoming V2 version of Sei will implement parallel EVM, supporting the operation and interaction of Cosmwasm smart contracts and EVM smart contracts. Here are the key points of the Sei V2 upgrade:

1. Optimistic parallelization: Allows concurrent transaction processing, significantly increasing throughput and efficiency. In the event of a state conflict, transactions will be reprocessed in order to maintain data integrity.

2. EVM Compatibility: Developers can deploy existing EVM smart contracts on Sei without changing the code, simplifying the transition to Sei v2 and enhancing interoperability.

3. Geth Compatibility: Sei nodes will integrate Geth to handle EVM smart contract transactions and will be updated through a special interface created for EVM via Sei.

4. SeiDB: Improved storage layer, using more efficient data structures and databases to reduce state bloat and enhance read/write performance, facilitating easier synchronization for new nodes and improving scalability.

5. Enhanced Performance: Featuring a block time of 390 milliseconds and rapid transaction processing capability with finality, as well as high throughput of 28,300 batch transactions per second, and lower transaction costs.

The Sei v2 upgrade will integrate the advantages of Ethereum, providing a super-optimized execution layer that is fully compatible with the existing EVM ecosystem, to attract more users and developers into the Sei ecosystem.

Sei Contract Security Recommendations

If developers plan to build Sei ecosystem applications and use CosmWasm to construct smart contracts, it is recommended to follow the safety practices below:

1. Be prepared to respond to attacks. Consider how to face attacks and fix vulnerabilities, build upgradable smart contracts, and develop risk response plans.

2. Pay attention to the deserialization of addr types. The addr type in CosmWasm is not validated during deserialization, which may lead to unexpected deserialization characteristics. It is recommended to specify the type and perform validation after deserializing the addr.

3. Pay attention to operations and overflow. Be aware of risks such as integer overflow or division by zero. It is recommended to use CosmWasm's Uint256 and Uint512 types, and to use the mathematical function full_mul() that does not overflow.

4. Be cautious of infinite loops. CosmWasm contracts may fall into an infinite loop by calling themselves in the ACK handler. When passing packets between two CosmWasm contracts, be aware that this may lead to infinite loops and consume a large amount of gas.

Sei Ecosystem

1. Wallet

Currently, the wallets specifically supporting the Sei network are Compass Wallet and Fin Wallet. There are 14 wallets compatible with the Sei network, including some that support the Cosmos ecosystem.

Security Recommendations:

( Avoid using wallet projects that are unaudited and have not been running for long.

)2( Safeguard your mnemonic phrase and private keys.

)3( Check the transaction information for correctness before signing the transaction to prevent fraud risks.

![High-Performance Layer 1 and Parallel EVM Dual Narrative: Analyzing Sei Network and Its Ecological Development])https://img-cdn.gateio.im/webp-social/moments-ad69f407dddef73d68ae7958323199e4.webp(

) 2. Kryptonite

Kryptonite is the largest liquidity staking protocol in the Sei ecosystem. Users can stake Sei tokens to receive stSei and earn an annualized return of 5.54%; they can also stake LP tokens of Seilor/Sei or stSei/SEIYAN to earn related token rewards.

Kryptonite plans to launch the kUSD stablecoin, allowing users to mint by collateralizing assets such as Sei, BTC, ETH, etc., providing more liquidity to the Sei ecosystem.

![High-Performance Layer 1 and Parallel EVM Dual Narrative: Analyzing Sei Network and Its Ecological Development]###https://img-cdn.gateio.im/webp-social/moments-f46a7dbcdc72b4a4b3c0030e2f5694f4.webp(

) 3. YakaFinance

Yaka Finance is committed to building a multifunctional DEX, providing users with various DeFi services such as trading, liquidity mining, and Launchpad, aiming to become the liquidity center hub of the Sei ecosystem.

Yaka Finance is currently in the testnet phase and has launched an airdrop incentive program to attract over 15,000 users to participate in the testing.

![High Performance Layer 1 and Parallel EVM Dual Narrative: Analyzing Sei Network and Its Ecological Development]###https://img-cdn.gateio.im/webp-social/moments-c2f45e32d5b434dec1a75ec6f638f349.webp(

) 4. PalletExchange

Pallet Exchange is the NFT trading platform of the Sei ecosystem, with a daily trading volume reaching up to 1.23 million Sei (approximately 1 million USD). The platform charges a 2% fee on NFT transactions to maintain its operations.

Currently, the NFT series that is attracting attention in the Sei ecosystem includes WeBump, The Colony, Seiyans, and Seinsei. As the Sei ecosystem is in its early development stage, users should be aware of the liquidity risks associated with these NFTs.

![High-Performance Layer 1 and Parallel EVM Dual Narrative: Analyzing Sei Network and Its Ecological Development]###https://img-cdn.gateio.im/webp-social/moments-79f2cd7120136f474a14dee5d879ab89.webp(

Summary

As a high-performance Layer 1 focused on trading, Sei has optimized the block generation and processing processes. The Sei ecosystem is rapidly growing, creating synergies with Sei. Various decentralized applications will continue to amplify Sei's high-performance advantages, and Sei will also attract more liquidity and users. With the continuation of the parallel EVM narrative, the Sei V2 upgrade will address the current bottlenecks of Sei, attracting more market attention and developers to enter the Sei ecosystem.

![High-Performance Layer 1 and Parallel EVM Dual Narrative: Analyzing Sei Network and Its Ecological Development])https://img-cdn.gateio.im/webp-social/moments-f29abafdf5312108b47132d88d729241.webp(

![High-Performance Layer 1 and Parallel EVM Dual Narrative: Analyzing Sei Network and Its Ecological Development])https://img-cdn.gateio.im/webp-social/moments-c4175b7da3bec0a880ba805afb8ca48b.webp(