Introduction
Decentralized Exchanges (DEXs) sometimes face challenges related to being Decentralized, handling a large number of transactions, and having enough money available for trading. Sei Network is a new solution that aims to tackle these problems, especially the ones related to handling a large number of Transactions.
Sei also wants to create more chances for trading apps to grow successfully while still following important principles like being Decentralized and using money efficiently. So, how does Sei Network deal with these challenges? In this article, we'll explore Sei Network and how it solves issues in the DeFi (Decentralized Finance) world.
What is Sei Network?
Sei Network is a Specialized Layer 1 Blockchain Platform, tailored for Trading applications, focusing on Scalability, Security, and Efficiency. It's designed to offer unique benefits for Decentralized Exchanges. But, the Sei network still has its disadvantages. Sei Network is emerging as a significant player in the Blockchain Space. But what is Sei Network exactly?
Sei Network is an Open-Source Layer 1 blockchain specialized for trading, focusing on optimizing its infrastructure to support a wide variety of trading applications
In essence, Sei Network aims to provide a Highly Optimized, Efficient, and Scalable Blockchain solution specifically designed for Trading applications, setting it apart from General-Purpose L1 Blockchains, while maintaining an Efficient Blockchain architecture.
Sei is the fastest Cosmos chain to finality because it was the first Layer 1 (L1) designed specifically for Trading, Optimizing each stack layer to offer exchanges an unfair edge. Take a look at the comparison table:
Decentralized exchanges, or DEXs, are dealing with a tricky challenge called the Trading Trilemma. This means they are trying to find the right balance between being Decentralized, handling a lot of Transactions, and using money efficiently all at once. Sei is tackling these problems head-on by creating the first Layer 1 Blockchain made specifically for trading. In simple terms, every part of Sei is set up to give the best possible conditions for trading digital assets.
But wait, How Does Sei Network Work?
Sei has carefully chosen a particular set of tradeoffs that make Layer 1 the ideal environment to scale with the demands of Decentralized Exchanges.
Over other blockchains, the Sei Network has a lot of advantages, such as:
Fast and high throughput
Liquidity
Massively scalable
An emphasis on the order book
Highly secure
A complete trading solution
The Sei Network's basic setup involves something called Centralized Order Books (CLOB). These are managed by various Decentralized Exchanges (DEXs) that have limited order books. This shift is good news for more advanced Decentralized Finance (DeFi) systems. The orders in these Centralized Order Books get matched up when each block finishes, thanks to native orders for all things related to CLOB. This new technique allows Sei Network to work with a variety of applications.
Sei also supports something called CosmWasm smart contracts, and it can include other IBC networks. The good thing is, the Cosmos SDK can connect to CosmWasm easily because it's written like a building block. So, if someone is making a blockchain using the Cosmos SDK, they can add support for CosmWasm smart contracts without changing what's already there.
The Sei Network is a special kind of blockchain (L1) that has a built-in order book. This order book makes it easy for smart contracts (like self-executing contracts with the rules of the agreement) to use a shared pool of money. Sei Network works well with applications from Ethereum and Cosmos because it supports EVM and Cosmwasm.
Think of Sei Network as the main hub in this system. It offers special features and easy-to-use interfaces to partners, giving them a stable environment and super-fast transactions.
Anyone can create a DeFi application (related to decentralized finance) that uses Sei's shared money and the benefits of the whole system. People, traders, and developers can become partners with Sei and get access to shared money and decentralized financial systems.
Talking About Some On-Chain Metrics
Sei Network, with its unique positioning in the blockchain space, offers several notable features tailored for decentralized exchanges and trading platforms:
A trading-specific blockchain: Unlike other layer 1 blockchain with multiple use cases, Sei is specifically designed to facilitate high-activity decentralized trading.
High speed: Sei has a high transaction speed. It is measured by Time to Finality (TFF), where Sei is 2x faster than Sui and about 1.5x faster than Aptos.
Transaction throughput: Transaction throughput is the rate at which valid transactions are approved to enter the blockchain within a given period. For comparison, Solana can process 10,000 transactions per second (TPS). In contrast, Sei can process 20,000 orders per second (OPS).
High security: Sei Network uses the Tendermint Core consensus mechanism and focuses on avoiding MEV risk through Frequent Batch Auctioning (FBA). Sei is creating a new standard in the DeFi ecosystem by prioritizing security, bandwidth, and reliability.
Enhanced Liquidity and Scalability: The network emphasizes liquidity to ensure smooth operation of trading platforms and is built for significant scalability to cater to the growing DeFi sector.
Innovative Consensus Mechanism: The network employs unique consensus mechanisms, like the Twin-Turbo Consensus, to enhance throughput and reduce latency, benefiting order book-based exchanges.
CosmWasm Smart Contracts Compatibility: It supports CosmWasm smart contracts, enhancing its versatility and allowing for easy integration with other Inter-Blockchain Communication (IBC) networks.
What's Sei Token?
The SEI token is the primary cryptocurrency of the Sei Network, a blockchain designed for trading applications. It serves multiple roles including governance, payment of transaction fees, and incentivizing network participation.
The Total Supply Of SEI Tokens is 10,000,000,000 tokens.