In this Blockcrunch Podcast, host Jason Choi is joined by Jayendra Jog, Co-Founder of Sei Network to talk about the Sei network, how it differs from other chains, it’s roadmap and more.
Read our notes below to learn more.
Jay’s Background
Software Engineer at Robinhood for 3.5 years.
Wanted to build something similar to Robinhood onchain that would also be trustless and permissionless.
Existing L1s and L2s infrastructure had no composability and had congestion issues.
Sei Network
Sector specific Layer 1 blockchain.
Built with Cosmos and Tendermint.
Completely customisable and extremely modular which allows a quick start and ability to replace certain parts after.
Optimistic processing which allows a 33% improvement in throughput and 25% improvement in latency.
Native order matching engine.
Helps exchanges to scale, prevents front running to a degree and helps with improving UX for market makers.
Onchain orderbook advantages:
Anything offchain requires assumptions of trust around censorship, ordering txns, etc.
Even a decentralized oracle on dYdX will lead to greater opportunities for MEV (Maximal Extractable Value).
Offchain not able to have composable atomic transactions which is one of the biggest differentiators between DeFi and TradFi.
Changes to how block propagation and processing works substantially improves performance.
Only Cosmos chain to make use of market-based parallelization.
Able to achieve around 22k orders per second that can be processed within 450 millisecond block time.
MEV
Able to mostly prevent order book related MEV by using frequent batch auction
Built-in to the chain itself in the native order matching engine.
Every single market order at the end of a block will be aggregated and executed at the same uniform clearing price
Results in price fairness and ordering within the block no longer matters.
Unable to prevent multi-block MEVs and thinks it’s impossible to completely solve MEV issues.
Better to have MEV redistribution strategy by using flashbots that are built into the chain itself.
Searchers that identify liquidation or arbitrage opportunities can submit bids to an off-chain node and an auction will happen.
Exchanges
Exchanges are the killer app in crypto and have high throughput and latency requirements.
NFTs and games are just tokens and as a result exchanges are basically required for every single application in crypto to work yet they are the most underserved applications.
Sei is optimizing every layer of the stack to give exchanges the best performance.
Permissions
Smaller Validator set than ETH, 20-50 validators.
Will decentralize further in the future as it’s not as important in the start.
Only DeFi applications are allowed to launch on Sei for now and a governance proposal is required for devs to deploy smart contracts.
Building In The Bear
No distraction to the team from bull market hype.
No mercenary founders that are trying to take advantage of market dynamics.
Bear market provides a more mission-driven boundary.
Sector Specific Chain vs Appchain
2 extremes in Layer 1s right now. App specific chain (dYdX, Osmosis, etc.) and general purpose chain (ETH, Solana, etc.).
General purpose chains have benefit of social coordination; an ecosystem of projects building together.
App specific chains benefit from customizability of the stack layers.
Sei is the middleground, which benefits from both social coordination and customizability.
Similar to Web2, blockchain is like a distributed database; started off very general purpose, become more decentralized.
Other Uses of Sei
Nitro - optimistic rollup with the SVM (Solana Virtual Machine) building on top of Sei.
Solana teams interested in coming to Cosmos execution but don’t want to rewrite smart contracts, can use Sei for data availability and settlement.
Future of Chains
Solana and ETH will be fine due to their ecosystem strength and popularity.
A lot of the more general purpose chains will diminish over time.
Thematic Rollups
Many roll-ups will not be able to handle the skill necessary for ETH applications.
Not atomically compostable with each other.
In the longer term the settlement layer is what matters.
Sei’s Roadmap
Implementing UXD stablecoin from Solana.
Completing the codes and finalizing audits in the next 3 months.
Incentivized testnets with 1% of the Sei token supply as reward.
There will be an airdrop happening with more details to be released.