What is Sei (SEI)?

Sei is a new Layer-1 Proof-of-Stake Blockchain which specializes in the exchange of digital assets. 

Designed to ‘bridge the performance gap between centralized and decentralized exchanges’, it has a built-in order book, allowing DeFi projects and institutional market-makers to process transactions and access liquidity at faster speeds

SEI is the blockchain’s native token. It is used to cover transaction fees, validate and secure the network, and as a governance token. SEI went live on August 15, 2023.

Rationale for the project according to Sei

The Sei whitepaper starts with the premise that ‘the fundamental use case of blockchains is the ability to exchange digital assets’. 

It debunks the common misconception that trading is confined to the DeFi (Decentralized Finance) ecosystem - highlighting that the most successful Web3 apps (games like Axie Infinity, or NFT marketplaces like OpenSea) are, indirectly or directly, trading apps too. It states that ‘trading is a general purpose’ since it is key to gaming, social, and NFT applications.

The team behind Sei predicts on-chain trading will continue to increase, due to factors such as increased crypto adoption over time, as well as the belief that centralized exchanges will be subjected to more regulations.

Sei positions itself as the solution to the  ‘Exchange Trilemma’. Much like the ‘blockchain trilemma’ (a term coined by Ethereum’s Vitalik Buterin), this refers to the belief that exchanges can never achieve decentralization, scalability, and capital efficiency at the same time - one attribute is always sacrificed at the expense of the other two.

The project states that scalability is the main issue exchanges face on Layer-1s. Sei claims to address this problem by ‘optimizing every layer of the stack to offer the best infrastructure for the exchange of digital assets’. 

Sei’s features

• Sei claims be the fastest chain to finality (with a lower bound of 300ms)
• Uses a Twin-Turbo consensus architecture
• Claims to be one of the only chains to conduct ‘market-based parallelization’
• Provides frontrunning protection
• Uses a native matching engine which exchange teams can leverage

How Sei describes itself

Sei’s official website states that it only has one value proposition: ‘exchange apps - whether it’s an NFT marketplace or gaming economy- will offer the best user experience by building on Sei’. 

About the founders

Sei was co-founded by Jeff Feng and Dan Edlebeck. Feng has a background in investment banking, whilst Edlebeck was previously CEO at Sentinel and Exidio.