Why Sei
Scaling Ethereum for an optimal internet experience
The Ethereum blockchain been the most impactful technology of my life. Creating a global value exchange across populations with an internet connection and enabling me to think about global possibilities of technology and connection, rather than only interacting with my local economy in the states.
Today, Ethereum is the most profitable software company in Q1 2024, generating $370m in profit on $825m in revenue and is the most popular protocol for blockchain developers - 9/10 developers contribute to at least one Ethereum Virtual Machine (EVM) chain. If Ethereum were to trade on the New York Stock Exchange or NASDAQ, it would top the net income margin charts, with Microsoft, Adobe and Veeva thereafter.
Despite all of that success, the experience on Ethereum Layer 1 (L1) and rollup chains is still fairly terrible:
Can only handle 30 sustained transactions/second
4-12 seconds or longer for transactions to complete on chain
Cost to run blockchain transactions, also known as gas, is typically more expensive than the cost to transfer the asset you are sending, especially when network activity is high
Up-time errors and failures to the chain where the chain shuts down during high transaction volume periods or fails to finalize blocks aren’t uncommon
The goal for Ethereum has always been to become the first incentive aligned world computer. To do this, applications need to offer the same user experience (UX) as any Web2 competitor. At the same time preventing rug pulls, spam and people losing money for computationally complex reasons.
The Sei Network
Enter Sei, a parallel-EVM L1 blockchain, which brings the fastest chain in existence to the Ethereum ecosystem. Giving users a Web2-like experience with all the benefits of Web3 decentralization. Sei has full EVM compatibility to utilize decentralized applications (dapps), network infrastructure and other complimentary tools on Ethereum with Sei speed.
Transactions/second: 28,000
Settlement time: 380 ms
Avg. transaction fee: $0.002
Fork EVM code with NO changes
Why does the EVM need parallelization?
In typical EVM implementations, transactions are processed one after the other in the order they arrive. This leads to longer processing times and higher costs when there are many transactions. Creating limitations in handling the increasing volume of transactions.
Parallelization enables multiple transactions to be executed simultaneously, creating better performance. The blockchain executes more transactions per second, and gas fees for users decrease, because they are not bidding against one block to get their transactions included.
A parallelized EVM blockchain has parallel execution channels, and each of these have their own fee market. Instead of all ecosystem activity driving up any cost of interaction, there are now supply and demand dynamics based on operation types (execution channels). This is how we can improve resource pricing and create separate fee markets with parallelized EVMs. Allowing faster and cheaper transactions with EVM based applications.
Why Sei and not other L1’s or rollup chains?
Currently, in blockchains their exist two ways to introduce parallel execution:
State access lists
Optimistic execution
In state access lists, every transaction includes information about where it is going to read and write. Nodes understand which transactions are non-conflicting and execute them in parallel. But this an in issue for the EVM. Access lists have to be specified upfront, and by doing this you break EVM compatibility, losing state on your chain. Nodes receiving EVM transactions have no idea what state changes will occur or what storage slots will be used.
To parallelize an EVM the best route is an optimistic approach, where you run all the transactions, and if something conflicts, you run it again. Worth mentioning that state access lists place a heavier technical burden on developers. Optimistic parallelization relies on trial and error and if there are conflicting transactions nodes just run them again.
Ethereum <> Sei
Developers on Sei are able to deploy already audited smart contracts and dapps from other EVM-compatible chains without any code changes. Sei nodes will import Geth — the Go implementation of the EVM. Geth is used to process EVM transactions, and any resulting updates (including state updates or calls to non-EVM related contracts) go through a special interface created by Sei for EVM. Simplifying the process of moving existing smart contracts from other blockchains like Ethereum to Sei.
Key Use Cases
Thanks to the speed and consistent up-time of the Sei Network, many use cases are unlocked with peak performance:
Payments
High throughput and low fees on Sei make it possible to support decentralized payments at scale. Multiple transactions can be processed simultaneously, which helps prevent congestion in one part of the network from affecting overall network performance. Sei's transaction fees are also affordable, usually less than $0.001, and predictable.
Any purchase you can make locally and internationally via Sei will cost a fraction of what it does on traditional payment platforms.
Reward & Loyalty Programs
Sei Network manages complex reward distributions for creators and collectors, handling multiple transactions for royalty payments simultaneously, reducing processing times and administrative overhead. Large-scale loyalty programs with multiple users redeeming rewards or transferring points at once, have a more scalable solution for customer engagement.
Non-Fungible Tokens (NFTs) & Interactive Web Apps
NFT Marketplaces like OpenSea, Magic Eden for buying, selling, and trading NFTs attract collectors, artists, and traders that can now trade in Web2 speed on Sei. Process multiple NFT minting operations simultaneously off-platform, allowing for high-volume NFT drops or collections to be launched without causing network congestion.
Social and Consumer apps like Lens Protocol, Audius, Mirror, Minds allow users to create and share content in a decentralized environment, attracting users interested in privacy and ownership. They can now own their digital content that they create and exchange them with people like they would on traditional apps and platforms like Facebook, Instagram and X.
Exchange Optimization & High-Frequency Trading (HFT)
Parallel EVMs can process multiple transactions at once, enabling high-frequency trading applications to operate more efficiently with reduced latency and fewer bottlenecks. Centralized Exchanges (CEX), Decentralized Finance (DeFi), lending and borrowing applications, can handle complex computations across various protocols without slowing down.
Gaming
Support real-time gameplay with multiple simultaneous interactions, enabling complex mechanics like battles, asset transfers, or in-game item trades without slowing down the network.
Frontrunning Mitigation
Frontrunning occurs when a trader uses their knowledge of pending transactions to sneak in their own trades before someone else’s. The Sei Network has a method in place to minimize this frontrunning called frequent batch auctioning. This batches and clears market orders at a fixed price to prevent traders from placing orders in queues. In doing so, SEI promotes a much fairer trading environment.
Conclusion
I’m joining the team to focus on growing businesses and infrastructure that will build on top of Sei along with other strategic protocol initiatives at the Foundation.
My personal mission and the Sei Foundation’s mission are very aligned. Build the best infrastructure for crypto. Enabling teams and users to develop the highest performance blockchain applications on the richest protocol in the land, the Ethereum Virtual Machine (EVM).
Parallelization on EVM enables a future where every user, Layer 2 (L2), application and infrastructure tool leverage parallel processing for enhanced efficiency. Leading to an improved user experience and an enlarged design space for developers. I believe this will be the de facto standard for scaling Ethereum and bring crypto to mainstream adoption.
DM me on Twitter/X, LinkedIn or email me at mike@seifdn.org to discuss how we can build your vision of Web2 experiences on Sei and beyond.