Sei (do not mistake it for Sui) is said to be the fastest Cosmos blockchain to date. However, is it actually able to compete with all the other industry leading solutions? 🚀
What is Sei?
Sei is an L1 Cosmos blockchain based on the CLOB protocol. Being a public blockchain, Sei requires the developers to submit a proposal and wait for government approval before they can deploy a smart contract. 🤖
Two types of contracts are available to developers:
- Exchange contracts - CosmWasm contracts that use Sei’s DEX module.
- General contracts - CosmWasm contracts that do not require functionality from the DEX module.
More about the CLOB protocol
CLOB not only allows Sei to integrate with dApps on its own blockchain, but also with the entire Cosmos ecosystem to leverage its liquidity as well as create markets for assets on Sei.
Network uses Cosmos SDK - an open source framework, created for building PoS blockchains. Tendermint BFT is used as the consensus mechanism. Cosmos SDK allows developers to flexibly customize their blockchain for specific purposes and, most importantly, communicate and interact with other blockchains from the Cosmos ecosystem, using the IBC protocol. 🛰️
Another dramatic difference is The Sei DOM mechanism, which completely relies on the network, thus being much more secure and decentralised. Still, it provides the speed and efficiency that offline order books provide. 🙌
DEXs would typically run into MEV conflicts with traders executing pre-orders by rearranging transactions in a particular block. Sei prevents MEV by using a “sequential auction” mechanism that combines orders at a single clearing price in a block. 🧱
How can you combine orders?
Sei uses two levels of order consolidation:
- Market makers can send multiple orders within a single transaction, thereby reducing gas costs.⛽️
- An order pooling algorithm is used: all orders for one market (ATOM, for example) are executed together by a smart contract, engaging just one virtual machine and causing a throughput increase. 📈
Sei has implemented a parallel order system, which basically allows simultaneous order distribution for different markets (trading pairs).
Sei is currently running a testnet that consists of 250 validators, divided into 5 groups. The speeds are stunning, block time is said to be just 0,9 seconds. 🏎️
The actual net will, however, be launched with just 50 validators. That is still likely to change depending on the final test results though. The team is sure that the system is capable of even higher speeds.
Even though Sei is still a testnet, there are already two projects being developed on it.
- The Vortex protocol (previously Retrograde) - is a decentralized exchange specialized on derivatives for IBC networks. Due to the borrowing and lending possibilities, Vortex can be called publicly available, meaning any user can expose an asset for trading. 🌪️
- Pharaoh is a decentralized exchange, specialised in synthetic asset trading. Those are digital assets pegged to real ones such as stocks, commodities and forex. 🤴
From what we can see right now, Sei is highly capable of showing great competition to others. There is still no information about the tokenomics, but we are likely to see a completely new and unique project with dozens of applications available for use.
Stay tuned 📻