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

Sei Network has begun to explode after several months of silence, with its token price continuously rising sharply, reaching an all-time high. Currently, Sei's liquid staking has surpassed $3.5 million, and the network's TVL has exceeded $11 million. Sei is about to undergo a very important Sei V2 upgrade, which will enhance parallel processing performance and introduce EVM. This article will analyze the code, technical features, and ecological projects of Sei Network to help everyone 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 leverage Sei's built-in order module to quickly launch and customize order book trading Dapps for spot, derivatives, options, and more, while Sei's parallel design offers a fast, high-throughput network for its ecosystem applications.

Sei improves the processing speed of the blockchain network in the following ways:

1. Local Build Hash

Sei allows its validators to send blocks to the network that contain only transaction hashes. Other validators, upon receiving it, 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 validator will wait for subsequent blocks containing detailed transaction content to arrive for verification.

2. Parallel Transaction Processing

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

In the code implementation, Sei will handle transactions. The processing is divided into two types: parallel processing and sequential processing. For multiple related transactions, Sei will process the related transactions sequentially; for unrelated transactions, it will process them in parallel.

Sei processes multiple transactions in parallel using Golang's goroutines. Currently, this design cannot handle too many transactions in parallel, such as processing thousands of transactions simultaneously, which is likely to cause 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, transactions in the EVM must be executed in sequence. The design of sequential execution avoids the complexity and conflicts of parallel execution, but it also limits the performance of the related blockchain network.

The design of the parallel EVM will allow different transactions in the EVM to occur simultaneously, greatly increasing the processing speed and network throughput of the EVM. The current solution is to use high-performance new public chains that are compatible with EVM, such as Solana, Aptos, and Sei (which supports parallel transactions). Among them, the parallel EVM of Sei has garnered the most attention in the market.

SeiV2 upgrade

Sei will implement parallel EVM in the upcoming V2 version to be launched 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 will perform any updates through a special interface created by Sei for EVM.

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 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 Security Recommendations

If developers plan to build applications on the Sei ecosystem, they will use CosmWasm to construct smart contracts. Developers are advised to follow the safety practices below to enhance the security of their project's contracts:

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 the deserialization of addr types. 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 perform validation after deserializing the addr.

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

4. Be aware of infinite loops. CosmWasm contracts may enter an infinite loop by calling themselves back in the ACK handler. If developers are passing packets between two CosmWasm contracts, they should be cautious as this may lead to infinite loops 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 wallets from a well-known trading platform and the previously Cosmos ecosystem-compatible wallets Keplr and Leap Wallet.

Security Recommendations:

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

( To protect the assets in your wallet, the most important thing is to pay attention to the safe storage of your mnemonic phrase and private keys.

)3( During the process of interacting with the Sei project using relevant wallets, signing is one of the security risks that requires the most attention. Users should check whether 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.

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) 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 yield of 5.54%; currently, users can also stake Seilor/Sei LP tokens and stSei/SEIYAN LP tokens to earn yields in related tokens.

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

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) 3. YakaFinance

Yaka Finance is committed to building a multifunctional DEX, providing users with various DeFi services such as trading, liquidity mining, and Launchpad, aiming to become 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.

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) 4. PalletExchange

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

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

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Summary

As a high-performance Layer 1 focused on trading, Sei has optimized the generation and processing of blocks. Currently, the Sei 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 Sei V2 upgrade will address the current bottlenecks of Sei, attracting more market attention and more developers into the Sei ecosystem.

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