Sei Network: A Dual Breakthrough 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 sharply, setting a new historical 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 V2 upgrade, improving parallel processing performance and introducing EVM. Let's analyze Sei Network's code, technical features, and ecological projects together to 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, offers 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 parallelized 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 current blockchain networks, validators propose blocks and then send the hash value and the block to other validators, which introduces a certain waiting time. Sei allows its validators to send blocks to the network that only contain 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

For a sequentially executed blockchain network, 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-commits of blocks in parallel. Parallel processing reduces latency and increases throughput.

The implementation of Sei 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 whether there is an overlap in the key-value pairs storing transaction information), Sei will process the related transactions sequentially; for non-related transactions, parallel processing will be used.

In the process of parallel transaction processing, Sei utilizes Golang's goroutines to handle multiple transactions in parallel. Currently, this design cannot handle too many transactions in parallel; for instance, if thousands of transactions are processed simultaneously by Sei's nodes, there is a high probability of encountering consistency issues. Therefore, Sei V2 needs to continue upgrading its parallel processing capabilities.

Parallel EVM

What is a parallel EVM?

EVM is the virtual machine that Ethereum uses to process transactions related to smart contracts. To ensure the security of the network, transactions in the EVM must be executed sequentially. This design of sequential execution avoids the complexities and conflicts of parallel execution, but it also limits the performance of the related blockchain networks.

The design of the parallel EVM will allow different transactions in the EVM to be processed simultaneously, significantly improving 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 inherently support parallel transactions. Among them, Sei's parallel EVM has garnered the most market attention.

Sei V2 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 parallelization: Allows concurrent transaction processing, significantly improving throughput and efficiency. If a state conflict occurs, transactions will be reprocessed sequentially to maintain data integrity.

2. EVM Compatible: Allows developers to deploy existing EVM smart contracts on Sei without changing any code, simplifying the transition to Sei v2 and improving interoperability.

3. Geth Compatibility: Sei nodes will integrate Geth to handle transactions for EVM smart contracts in the future network, and any updates will be conducted 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 quick transaction processing capability 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 in the Sei ecosystem, they will use CosmWasm to build smart contracts. It is recommended that developers follow the safety 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 should 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, which indicates 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 should be aware of the risks of 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 an infinite loop by calling themselves back in the ACK handler. If developers are passing packets of data between two CosmWasm contracts, they need to be aware that this may lead to an infinite loop and consume a large amount of gas fees.

Sei Ecosystem

1. Wallet

Currently, the wallets specifically supporting the Sei network are Compass Wallet and Fin Wallet. There are 14 wallets compatible with the Sei network, including OKX Wallet and the previously Cosmos ecosystem supporting wallets Keplr and Leap Wallet.

Security Advice:

(1) It is recommended that users avoid using wallet projects that are unaudited and have a short runtime.

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

(3) During the process of interacting with the Sei project using the relevant wallet, signing is one of the security risks that needs to be focused on the most. Users should check whether the transaction information is correct before signing the transaction, as hackers may 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, gaining an annual yield of 5.54%; currently, they can also stake Seilor/Sei LP tokens and stSei/SEIYAN LP tokens to earn rewards in the respective tokens.

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

4. PalletExchange

Pallet Exchange is the NFT trading platform for the Sei ecosystem, with a peak daily trading volume reaching 1.23 million Sei (approximately 1 million USD). Pallet Exchange charges a 2% transaction fee on NFT trades on its platform to maintain operations.

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

Summary

As a high-performance Layer 1 focused on trading, Sei has optimized the process of block generation and processing. 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 also 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 to enter the Sei ecosystem.