Sei Network Explodes: High-Performance Layer 1 and Parallel EVM Dual Narrative

After months of silence, the Sei Network has started to explode, 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 the CodeSei hackathon.

This year, Sei is about to undergo a significant V2 upgrade, enhancing parallel processing capabilities and introducing EVM. This article will analyze the Sei Network's code, technical features, and ecological projects to help understand the potential opportunities of Sei and 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 quickly launch and customize order book trading Dapps for spot, derivatives, options, etc., using Sei's built-in order module, while Sei's parallel design offers a fast and high-throughput network for its ecological applications.

Sei improves the processing speed of the blockchain network through the following methods:

1. Local build hash

Sei allows validators to send blocks to the network that contain only transaction hashes. Other validators, upon receiving these, will first construct blocks based on the records in the local mempool. If the mempool does not contain the corresponding transaction information, the validator will wait for subsequent blocks that include detailed transaction content to arrive for verification.

2. Parallel Transaction Processing

The Sei Network processes blocks in the pre-vote and pre-commit phases through validators in parallel. Parallel processing reduces latency and increases throughput.

In the code implementation, Sei performs parallel processing and sequential processing of transactions. For multiple related transactions, Sei processes them sequentially; for non-related transactions, it processes them in parallel.

Sei processes multiple transactions in parallel using Golang's goroutines. Currently, this design cannot handle too many transactions in parallel, so Sei V2 needs to continue upgrading in parallel processing.

Parallel EVM

What is Parallel EVM?

EVM is the virtual machine that processes transactions related to smart contracts. To ensure network security, transactions in the EVM must be executed sequentially. Sequential execution avoids the complexities and conflicts of parallel execution, but it also limits network performance.

The design of parallel EVM will allow different transactions in the EVM to be processed simultaneously, greatly increasing processing speed 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 is receiving 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 following are the key points of the Sei V2 upgrade:

1. Optimistic parallelization: allows concurrent transaction processing, significantly improving throughput and efficiency. In case of state conflicts, transactions will be reprocessed in order to maintain data integrity.

2. EVM Compatible: Enables developers to 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 transactions of EVM smart contracts in the future network and make any updates through a special interface created for EVM by Sei.

4. SeiDB: Sei will improve its storage layer by using more efficient data structures and databases to reduce state bloat and enhance read/write performance, facilitate easier synchronization for new nodes, and improve scalability.

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

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

Sei Contract Safety Recommendations

If developers plan to build Sei ecosystem applications, they will use CosmWasm to construct smart contracts. It is recommended that developers follow the security practices below to enhance the contract security of their projects:

1. Be prepared to respond to attacks. Developers need to consider how to face attacks and fix vulnerabilities. Therefore, it is necessary to build upgradeable smart contracts and develop a risk response plan.

2. Pay attention to the deserialization of the addr type. The addr type in CosmWasm is not validated during deserialization, indicating that the addr type may have unexpected deserialization characteristics. Therefore, it is recommended to specify the type and validate it after deserializing the addr.

3. Pay attention to calculations and overflow. In CosmWasm contracts, developers need to 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 non-overflowing mathematical function full_mul().

4. Be aware of infinite loops. CosmWasm contracts may fall into an infinite loop by calling themselves back in the ACK handler. If there are data packets being passed between two CosmWasm contracts, be aware that this may lead to an infinite loop and consume a large amount of gas.

Sei Ecosystem

1. Wallet

Currently, the wallets that specifically support the Sei network include Compass Wallet and Fin Wallet. There are 14 wallets compatible with the Sei network, such as a certain wallet and the previously Cosmos ecosystem-supported wallets Keplr and Leap Wallet.

Safety Recommendations:

(1) It is recommended that users avoid using wallet projects that are unaudited and have not been running for long.

(2) To protect wallet assets, the most important thing is to pay attention to the secure storage of the mnemonic phrase and private key.

(3) During the interaction with the Sei project using related wallets, signing is one of the security risks that requires the most attention. Users need to verify that the transaction information is correct before signing the transaction, as hackers can deceive users into using cosmos.bank.v1beta1.MsgSend to transfer tokens to the hacker's address.

2. Kryptonite

Kryptonite is the largest liquid staking protocol in the Sei ecosystem. Users can stake Sei tokens on its platform to earn stSei, with an annualized yield of 5.54%; currently, they can also stake Seilor/Sei LP tokens and stSei/SEIYAN LP tokens to earn rewards in the corresponding tokens.

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

3. YakaFinance

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

Previously, Yaka Finance won first place in the DeFi track at the Code Sei hackathon jointly held by Sei.

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

4. PalletExchange

Pallet Exchange is the NFT trading platform of the Sei ecosystem, with a daily trading volume currently reaching a maximum of 1.23 million Sei, approximately 1 million US dollars. Pallet Exchange will charge a 2% fee on NFT transactions on its platform to maintain its operation.

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

Summary

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