Analysis of Sei Network and Its Ecological Development: High-Performance Layer 1 and Parallel EVM Dual Narrative

Sei Network has begun to surge after months of silence, with its token price continuously rising to new historical highs. Currently, Sei's liquid staking has surpassed $3.5 million, and the network's TVL has exceeded $11 million. This year, Sei is set to undergo an important V2 upgrade to enhance parallel processing performance and introduce EVM. This article will analyze Sei Network's code, technical features, and ecological projects to help readers understand Sei and the potential opportunities within its ecosystem.

Sei Design Features

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

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

1. Local Build Hash

Sei allows its validators to send blocks to the network that only contain transaction hashes. Other validators, upon receiving them, will first construct blocks based on the records in their local memory pools. If the memory pool does not have the corresponding transaction information, the validators 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-vote and pre-commit phases of blocks in parallel. In the code implementation, Sei processes transactions either in parallel or sequentially, depending on whether the transactions are related.

Currently, this design cannot handle too many transactions in parallel. For example, if thousands of transactions are processed in parallel by Sei's nodes, there is a high probability of consistency issues. Therefore, Sei V2 needs to continue upgrading its parallel processing capabilities.

Parallel EVM

What is a parallel EVM?

EVM is the virtual machine that processes smart contract-related transactions on Ethereum. To ensure network security, transactions in the EVM must be executed sequentially, but this also limits network performance. The design of parallel EVM will allow different transactions within the EVM to occur simultaneously, greatly increasing processing speed and network throughput.

The current solution is to use high-performance new public chains like Solana, Aptos, and Sei (which inherently support parallel transactions) that are compatible with EVM. Among them, Sei's parallel EVM has attracted the most market attention.

SeiV2 upgrade

Sei will implement parallel EVM in the upcoming V2 version in 2024, supporting the operation and interaction of Cosmwasm smart contracts and EVM smart contracts. The main upgrade points include:

1. Optimistic concurrency: Allows concurrent transaction processing, improving throughput and efficiency.
2. EVM Compatible: Supports deployment of existing EVM smart contracts without the need to change the code.
3. Geth Compatibility: Sei nodes will integrate Geth to handle EVM smart contract transactions.
4. SeiDB: Improve storage layer, enhance read/write performance and scalability.
5. Enhanced performance: 390 milliseconds block time, 28,300 batch transactions per second, reduced transaction costs.

Sei Contract Security Recommendations

For developers planning to build applications in the Sei ecosystem, it is recommended to follow the security practices below:

1. Be prepared to respond to attacks, build scalable smart contracts, and develop risk response plans.
2. Pay attention to deserialize the addr type for validation.
3. Pay attention to calculations and overflow, using CosmWasm's Uint256 and Uint512 types, as well as non-overflowing mathematical functions.
4. Avoid infinite loops, especially in cases where the ACK handler calls itself.

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 a well-known exchange platform wallet and those that originally supported the Cosmos ecosystem, such as Keplr and Leap Wallet.

Security Advice:

• Avoid using wallet projects that are unaudited and have not been running for long.
• Safely store your mnemonic phrases and private keys.
• Carefully check the transaction information before signing the transaction.

2. Kryptonite

Kryptonite is the largest liquid staking protocol in the Sei ecosystem. Users can stake Sei tokens to receive stSei, earning an annualized return of 5.54%; they can also stake LP tokens of Seilor/Sei or stSei/SEIYAN to obtain related returns.

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

3. YakaFinance

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

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

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.

Currently, the NFT series in the Sei ecosystem that are attracting attention include WeBump, The Colony, Seiyans, and Seinsei. Since the Sei ecosystem is in its early development stage, users need to be aware of the liquidity risks associated with the relevant NFTs.

Summary

As a high-performance Layer 1 focused on trading, Sei has optimized the block generation and processing process. Sei's ecosystem is rapidly growing, and various decentralized applications will continue to amplify Sei's high-performance advantages. 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 into the ecosystem.