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

Sei Network has begun to explode after several months of silence, with its token price continuously rising significantly, reaching a historical high. Currently, Sei's liquid staking has surpassed $3.5 million, and the network's TVL has exceeded $11 million. This year, Sei is about to undergo a very important V2 upgrade, improving parallel processing capabilities and introducing EVM. Next, we will analyze Sei Network's code, technical features, and ecological projects to help everyone 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, offers a built-in central limit order book (CLOB) module. Developers can quickly launch and customize order book trading Dapps for spot, derivatives, options, and more using Sei's built-in order module, while Sei's parallelization design provides a fast and high-throughput network for its ecosystem applications.

How does Sei improve the processing speed of blockchain networks?

1. Local Build Hash

In most blockchain networks today, validators propose blocks and then send the hash and the block to other validators, which creates a certain waiting time. Sei allows its validators to send blocks to the network that only contain transaction hashes. When other validators receive a block that only contains transaction hashes, they will first construct the block based on the records in their local memory pool. 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

For sequentially executed blockchain networks, when a block is proposed, validators need to wait for a certain length of time without actually processing the block. Sei Network allows validators to process pre-votes and pre-commit stages of blocks in parallel. Parallel processing reduces latency and increases throughput.

The implementation of Sei's parallel processing in the code is as follows: in the ProcessTxs function, Sei processes transactions. The processing is divided into two types: parallel processing and sequential processing. For multiple related transactions (determined by checking whether the key-value pairs storing transaction information overlap), Sei will process the related transactions sequentially; for unrelated transactions, it will process them in parallel.

In the process of parallel transaction processing, Sei handles multiple transactions concurrently through Golang's goroutines. Currently, this design cannot handle too many transactions in parallel, such as thousands of transactions being processed concurrently by Sei's nodes, which is likely to result in consistency issues. Therefore, Sei V2 needs to continue upgrading in parallel processing.

Parallel EVM

What is Parallel EVM?

EVM is the virtual machine that processes smart contract-related transactions on Ethereum. To ensure the security of the network, EVM transactions must be executed in sequence. This sequential execution design avoids the complexity and conflicts of parallel execution but also limits the performance of the related blockchain network.

The design of parallel EVM will allow different transactions in the EVM to occur simultaneously, greatly improving the processing speed and network throughput of the EVM. The current solution is to use high-performance new public chains such as Solana, Aptos, and Sei (which 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. Here are the key points of the Sei V2 upgrade:

1. Optimistic concurrency: Allows concurrent transaction processing, significantly improving throughput and efficiency. If a state conflict occurs, transactions will be reprocessed in order to maintain data integrity.

2. EVM Compatibility: Allows developers to deploy existing EVM smart contracts on Sei without changing any 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 perform 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, facilitating easier synchronization for new nodes and improving scalability.

5. Enhanced performance: With a block time of 390 milliseconds and rapid 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 Security Recommendations

If developers plan to build Sei ecosystem applications, they will use CosmWasm to construct smart contracts. Developers are advised to 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, developers need to build upgradable smart contracts and develop a risk response plan.

2. Pay attention to deserializing addr types. The addr type of 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 perform validation after deserializing the addr.

3. Pay attention to operations and overflow. In CosmWasm contracts, developers need to be aware of risks such as integer overflow or division by zero. It is recommended that developers use CosmWasm's Uint256 and Uint512 types and use the non-overflowing mathematical function full_mul().

4. Be aware of infinite loops. CosmWasm contracts may enter into an infinite loop by calling themselves back in the ACK handler. If developers are passing data packets between two CosmWasm contracts, they should be aware that this could lead to an infinite loop and consume a large amount of gas fees.

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 those from a large exchange, as well as the previously Cosmos ecosystem-supporting wallets Keplr and Leap Wallet.

Security Recommendations:

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

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

(3) During the process of interacting with the Sei project using related wallets, signing is one of the security risks that require the most attention. Users should check whether the transaction information is correct before signing the transaction, as hackers can trick 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 receive stSei, earning an annualized return of 5.54%; currently, LP tokens of Seilor/Sei and stSei/SEIYAN can also be staked to earn returns on the related tokens. A security audit firm has previously completed a contract audit for Kryptonite, enhancing the security of its staking operations.

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

![High-Performance Layer 1 and Parallel EVM Dual Narrative: Analyzing Sei Network and Its Ecological Development])https://img-cdn.gateio.im/webp-social/moments-c2f45e32d5b434dec1a75ec6f638f349.webp###

( 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.

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.

![High-performance Layer1 and Parallel EVM Dual Narrative: Analyzing Sei Network and Its Ecological Development])https://img-cdn.gateio.im/webp-social/moments-79f2cd7120136f474a14dee5d879ab89.webp###

( 4. PalletExchange

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

Currently, the NFT series that are gaining attention in the Sei ecosystem include WeBump, The Colony, Seiyans, and Seinsei. As the Sei ecosystem is in its early development stage, users should be aware of the liquidity risks associated with these NFTs.

![High-Performance Layer 1 and Parallel EVM Dual Narrative: Analysis of Sei Network and Its Ecological Development])https://img-cdn.gateio.im/webp-social/moments-f29abafdf5312108b47132d88d729241.webp###

Summary

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