Why Sei Network is best for Defi Trading?

Prateek Tripathi
6 min readAug 13, 2023

Introduction

In the fast-paced world of decentralized finance (DeFi), speed and efficiency are paramount. That’s where Sei Network

comes in. Sei is an open-source Layer 1 blockchain that has emerged as the fastest blockchain on the market,

specifically designed to revolutionize the way we trade digital assets. In this article, we will explore the key features

and innovations of Sei Network and why it is considered the go-to platform for DeFi trading.

The Need for Speed: Sei’s Lightning-Fast Blockchain

Photo by Brandon Sehl on Unsplash

At the heart of Sei Network’s lightning-fast speed is its innovative Twin Turbo consensus mechanism. This mechanism

combines intelligent block propagation and optimistic block processing, resulting in unparalleled performance. With a

lower bound time to finality of just 300ms, Sei is setting new standards for blockchain speed.

Intelligent block propagation allows Sei to optimize throughput by speeding up where it can and slowing down where

necessary. Block proposers send compressed block proposals containing only transaction hashes, significantly reducing

the time and bandwidth required for block processing. Validators receiving these compressed proposals can reconstruct

the original block using transactions from their mempool, resulting in a 40% increase in overall throughput.

Optimistic block processing takes Sei’s speed to the next level. By skipping pre-voting and pre-commit steps, validators

can directly call the block finalization function, significantly speeding up block validation and voting. This approach

allows Sei to process block proposals concurrently, resulting in a 33% increase in throughput. Block times of around

300ms are achieved, enabling Sei to process up to 22,000 orders per second while maintaining 500ms finality.

Market-Based Parallelization for Enhanced Throughput

Photo by Maxim Hopman on Unsplash

Sei takes parallelization to the next level with its market-based parallelization approach. Unlike other high-performance

ecosystems, Sei’s parallelization is specialized and tailored specifically for trading functionality. By processing orders

from independent markets simultaneously and orders within the same market sequentially, Sei achieves throughput

levels that are 5-10 times greater than its competitors. This means faster block times, lower latency, and higher

throughput, ensuring seamless trading experiences for users.

Native Order-Matching Engine and Frontrunning Prevention

Sei Network offers a native order-matching engine built into the Layer 1 blockchain itself. This allows exchange apps

built on Sei to scale effectively, providing traders with a seamless and efficient trading experience. Additionally, Sei has

implemented a frontrunning prevention mechanism to combat the widespread issue of malicious frontrunning seen in

other ecosystems. These built-in features ensure fair and secure trading on the Sei Network.

The Power of Sei: Optimized Infrastructure for Trading Apps

Unparalleled Speed and Efficiency for All Trading Apps

Sei Network’s infrastructure is optimized to provide unparalleled speed and efficiency for all types of trading apps.

Whether it’s a decentralized finance (DeFi) decentralized exchange (DEX), a non-fungible token (NFT) marketplace, or a

gaming DEX, Sei claims to outperform any other Layer 1 blockchain. With its cutting-edge solution, Sei aims to solve

the scalability problem for DEXs and be the premier choice for exchanges seeking infrastructure tailored for their

trading needs.

The Core Thesis: Exchanges as the Fundamental Use Case of Blockchains

Sei’s core thesis is that the fundamental use case of blockchains is the ability to exchange digital assets. The success of

most prominent Web3 apps is rooted in asset exchange, even if they are not explicitly marketed as exchanges. From

DEXs like Uniswap and Sushi to gaming platforms like Axie Infinity and StepN, the exchange of assets drives the value

and user experience of these applications. By focusing on optimizing its infrastructure for exchanges, Sei aims to unlock

the next stage of growth for Web3 adoption.

The Exchange Trilemma: Solving the Scalability Challenge

Exchanges face a major scalability challenge known as the Exchange Trilemma. They cannot achieve decentralization,

scalability, and capital efficiency simultaneously. Sei Network addresses this challenge by optimizing every layer of the

stack to offer the best infrastructure for trading apps. With Sei, exchanges no longer have to compromise on

decentralization. They can provide the same user experience as any Web2 app while maintaining the trustless,

permissionless nature of blockchain transactions.

The Growing Importance of Exchanges in Web3

Photo by Jack B on Unsplash

As Web3 continues to grow, the role of exchanges will only increase in importance. The proliferation of digital assets

and the 24/7 nature of their prices create a greater need for efficient and scalable exchange infrastructure.

Furthermore, the higher regulatory pressure on centralized exchanges (CEXs) is expected to drive even more volume

and activity on-chain. This presents a significant opportunity for DEXs to scale and adapt to the growing wave of

adoption.

Sei Network is at the forefront of this evolution, providing the necessary infrastructure for the next phase of

Web3 growth.

Sei Network’s Impact on DeFi Trading

Sei Network’s focus on optimizing every layer of the stack for trading apps brings significant benefits to both

developers and users. Developers can leverage Sei’s infrastructure to build decentralized exchanges with a central limit

order book (CLOB) system, similar to traditional centralized trading platforms like Binance and Coinbase. This system

offers cost-effectiveness, decentralization, and transparency. Moreover, Sei’s infrastructure supports automated market

maker (AMM) systems commonly used in DeFi applications, providing developers with flexibility in building various

trading functionalities.

For users, Sei Network offers a seamless and efficient trading experience. The lightning-fast speed and high throughput

ensure quick order execution and minimal latency. The built-in order-matching engine and frontrunning prevention

mechanism provide fair and secure trading. Additionally, Sei’s order batching feature simplifies the process of updating

multiple orders across different exchanges, improving efficiency and reducing costs for market makers.

The Sei Token and its Listing on Binance

The native cryptocurrency of Sei Network, the SEI token, plays a crucial role in the ecosystem. It serves as a medium of

exchange within the network and facilitates the seamless operation of trading apps. To further enhance its utility and

accessibility, Binance, one of the leading cryptocurrency exchanges, has announced the listing of the SEI token on its

platform. This listing is expected to increase the liquidity and visibility of the SEI token, attracting more traders and

investors to the Sei Network ecosystem.

Sei Network’s Vision for the Future

Sei Network is not resting on its laurels. The development team behind Sei, known as Sei Labs, is continuously working

to improve and expand the capabilities of the network. They envision Sei as the go-to platform for all types of trading

apps, not just in the DeFi space but also in gaming, NFTs, and other emerging sectors. By providing optimized

infrastructure, Sei aims to empower developers to build innovative and user-friendly trading applications that drive the

next wave of Web3 adoption.

Conclusion

Sei Network is revolutionizing the world of DeFi trading with its lightning-fast Layer 1 blockchain. With its Twin Turbo

consensus mechanism, market-based parallelization, and native order-matching engine, Sei offers unparalleled speed

and efficiency for all types of trading apps. By focusing on optimizing its infrastructure for exchanges, Sei aims to solve

the scalability problem faced by DEXs and provide the best-in-class trading experience. With the recent listing of the

SEI token on Binance, Sei Network is poised for even greater growth and adoption. As Web3 continues to evolve, Sei

Network is at the forefront, driving the transformation of the trading landscape and unlocking new possibilities for

decentralized finance.

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Prateek Tripathi

Introducing Prateek Tripathi, a tech-savvy individual with a passion for all things crypto, blockchain, and coding.