Sei Network is a Layer 1 blockchain built for digital asset exchange. It recently launched its own token, SEI, which has caused quite a stir. So, what exactly is Sei Network? This guide will cover everything you need to know about Sei in 5 minutes.

The Sei team believes that exchanges are the most important infrastructure in the crypto market. Most applications in the crypto market are some form of exchange. Exchanges are not only essential in DeFi, but also in application scenarios such as games and NFTs. For example, games like StepN and Axie Infinity rely on in-game exchanges to provide a Play-to-Earn experience. Everything in the crypto world ultimately comes back to exchanges.

However, the existing Layer 1 blockchain cannot support an efficient on-chain exchange. They process transactions too slowly. At the same time, although centralized exchanges have a good experience, they are ultimately centralized products, and decentralization is one of the core principles of the cryptosphere. Sei aims to solve the three dilemmas faced by current crypto market exchanges and create a decentralized exchange with a centralized experience.

Sei designs every layer of its technology stack to optimally execute the exchange's exchange functions. According to Sei, they have only one value proposition: any exchange, whether it’s a DeFi DEX, an NFT market, or a gaming DEX, will perform better on Sei than on any other Layer 1 network. Sei is built with the Cosmos SDK. However, unlike application-specific Cosmos application chains like Osmosis, Sei is a general-purpose blockchain suitable for any transaction application.

Sei stands out in five ways:

One of the fastest

Sei claims to be the fastest blockchain, Confirmation times can be as short as 300 milliseconds to 600 milliseconds, processing up to 22,000 orders per second. Based on these numbers, Sei will be 5 times faster than Solana and 700 times faster than Ethereum, making Sei on par with centralized exchanges in order execution and much better than current DEX products on the market.

Twin-Turbo Consensus

On the basis of retaining the Tendermint consensus of the Cosmos series blockchain, Sei has developed Sei’s proprietary Twin Turbo Consensus mechanism that combines Optimistic Block Processing with The combination of Intelligent Block Propagation makes it 83% faster. This improvement enables Sei to deliver faster block times, lower latency, and higher finality, which are necessary to develop on-chain order book-based exchanges.

The so-called twin-turbo consensus consists of two parts:

Intelligent Block Propagation

Intelligent block propagation improves block processing efficiency and allows Sei to speed up processing when necessary, increasing overall throughput by 40%.

Smart block propagation allows block proposers to send compressed versions of block proposals. Compressed block proposals only contain transaction hashes, not detailed block content. Sei's tests show that in the vast majority of cases, due to the propagation mechanism of the Sei network, each validator already has the complete content of the potential transaction in its local memory pool (mempool), and there is no need for a block proposer send. Validators who receive a compressed version of a block proposal can reconstruct the original block directly using records from their local memory pool. If the corresponding transaction does not exist in the validator's memory pool, the validator can continue to wait for the arrival of the uncompressed detailed proposal. This approach allows Sei to significantly increase block processing speeds while still ensuring transaction validity.

Optimistic block processing

Sei’s development team has developed a new block processing algorithm called Optimistic Block Processing, which is designed to significantly improve block times and overall processing speed. This algorithm skips the two steps of pre-voting and pre-commitment in the Tendermint consensus, allowing validators to directly call the block confirmation function, thereby achieving faster block verification and voting. This approach differs from traditional blockchain. On most blockchains, block proposals must be processed sequentially, resulting in slower processing and reduced throughput. With optimistic block processing, Sei can process block proposals at the same time as starting the pre-voting and pre-commit steps, resulting in a 33% increase in throughput.

Market-based parallel execution

Market-based parallel execution increases Sei’s block production speed to that of most high-performance blockchains 5-10 times.

Most blockchains must process transactions sequentially, i.e. transactions must be processed in the order in which they are received by the validator.

But Sei's response strategy is different. On Sei, orders from different independent markets can be processed in parallel at the same time, while orders within the same market are still processed sequentially. Load testing conducted by Sei shows that this modification results in faster block times, lower latency and more powerful performance for Sei at all load levels. The improvements brought by this feature are especially noticeable under higher loads.

Native order matching engine

Sei built A native order placing and matching engine. Developers building applications on top of Sei can leverage the engine to easily create order book-based exchanges, employing the central limit order book (CLOB) system common on centralized exchanges. Order book-based exchanges on top of Sei will be faster and more efficient than traditional automated market makers (AMM)-based decentralized exchanges.

Specifically, Sei’s native order matching engine includes the following unique features.

Single Block Order Execution

Sei’s Single Block Order Execution allows users to place and execute orders within a single block. In contrast, traditional order book platforms like Serum require users to place and execute orders in separate blocks. As a result, trading on Sei is faster and more efficient. This feature is very convenient for high-frequency traders who need to execute orders quickly.

Order Bundling

With order bundling, Sei allows market makers to update prices in multiple markets in a single transaction. This helps streamline the trading process and enables market makers to provide liquidity more efficiently. By bundling orders, Sei provides market makers with a lower-cost solution to manage their trades.

Native price oracle

The native price oracle is integrated into the base layer of Sei to ensure that the asset price data on the chain is true and reliable. Sei’s oracles require validators to agree on a price before committing a transaction. In other words, no block is constructed until all validators agree on the price, thus ensuring the accuracy of the price.

Frontrunning protection

Sei eliminates MEV issues such as frontrunning by executing trade orders in batches. Sei aggregates all orders in the market at the end of each block and liquidates them at the same price, thereby eliminating the opportunity for some traders (such as MEV robots) to place orders before others, improving the overall fairness of the market. This feature also helps prevent slippage by reducing the impact of individual large trades on the market. Frequent batch transaction execution enables Sei to provide users with a safe, reliable and fair trading experience.