Sei — the leader of decentralized exchanges.
Sei and Solana comparison.
Sei breaks stereotypes.
In terms of liquidity, decentralized finance is still tiny compared to traditional asset classes. Decentralized finance is still in its nascent stages, the infrastructure and tooling for composability across ecosystems is getting built out.
said Dan Edlebeck, co-founder of Sei Network.
At this point, DeFi has many barriers to entry into the crypto world, including psychological factors in the transition to new financial platforms, but one of the main drawbacks has been the lack of interoperability and liquidity in decentralized finance.
Before diving into the deep waters of Sei technology, we need to understand the basic principles behind the project, let’s be clear about what problems blockchain solves:
- General-purpose circuits like Bitcoin, and Ethereum — are not optimized for specialized options by decentralized exchanges. This holds back their development.
- You can’t build an exchange on a general-purpose chain using the order book model because it’s too congested.
- - General purpose L1s are too slow and cannot offer the trading tools that centralized exchanges offer.
Sei is an L1 blockchain optimized for trading. It was created with the sole purpose of becoming the foundation for new decentralized exchanges (DEX) in DeFi, NFT and gaming industries. It is built using the Cosmos SDK technology, which allows it to be industry and trade-oriented. However, unlike the Cosmos ecosystem, which builds a blockchain for just one application, Sei is a blockchain for a wide range of applications that are in one sector — DEX applications. It aims to achieve its ambitious goals through improvements in three main areas: performance, security, and interoperability.
Sei promises lightning-fast transaction completion times of 600 ms and a maximum of 22,000 orders per second, such performance is staggering. The blockchain’s fast throughput is vital to its own order-matching mechanism model, as it will replace the traditional AMM trading model. Such order execution capabilities would put Sei on par with centralized exchanges (CEX), and would later impose strong competition on them. For the current DEX in the market — Sei is the best project.
In terms of security, Sei relies on the Tendermint Core consensus mechanism that supports the Cosmos ecosystem. Sei promises to prevent one of the biggest problems — MEVs and front-running. This will allow applications on Sei to use their validators and provide a guarantee of seamless trading for customers.
Sei is also partnering with several protocols to ensure maximum compatibility. Blockchain compatibility, or cross-chain interoperability, is the ability to see and exchange information across multiple blockchains.
Let’s compare Sei’s technology with Solana
Sei is not the first crypto project experimenting with a networked order exchange.
Solana had a similar experience with its flagship DeFi protocol, Serum. Solana’s DeFi ecosystem had a total value of over $10 billion, but its popularity has plummeted due to a set of problems: frequent outages and hacks, the collapse of the Solana-affiliated FTX exchange, and the ongoing crypto-winter.
Sei Network will solve the problems that Solana had, I will highlight a few distinctive parameters relative to Solana.
- Sei will exclusively support DeFi transactions, which means that other applications in niches like NFT and gaming won’t clog up the network. Second, instead of using a new consensus mechanism to increase throughput, the Sei team
- Sei uses the tried and tested Cosmos Software Development Kit, which should result in more stability and less downtime than Solana. The aforementioned advantages will allow Sei to be a leader in this area.
- The Sei team says it wants to create a “decentralized Nasdaq.” The idea is to create financial applications that can use a decentralized order-book-based exchange built into the platform.
Sei’s thorny path to the pinnacle of leadership in decentralized exchanges.
Most decentralized exchanges solve the aforementioned problems by deploying an automated market maker (AMM) with which users can trade. However, since CEXs still occupy more than 90% of the trading volume, this solution has not impressed the market. All this allows Sei to enter the market with its “decentralized NASDAQ value.
Sei promises that its technological mechanisms are competitive and will be better, (CLOB) Centralized Limit Order Book, this will be achieved through a decentralized order book model. the idea is to provide high-frequency trading, with off-chain speed while maintaining security on the chain. All of these factors are supported by the non-obvious fact of developers moving to Cei from competitors.
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