Sei Community Unpacked: Testing the New Layer 1 Forward of Its Token Airdrop

Key Takeaways

  • Sei Community is an upcoming DeFi-focused Layer-1 blockchain constructed on Cosmos.
  • It hopes to turn out to be a “decentralized Nasdaq” by providing quick transaction execution speeds of 300 to 400 milliseconds.
  • Testnet customers will obtain SEI tokens for his or her contributions to the community when it goes reside on mainnet.

Sei Community is a DeFi-focused Layer 1 blockchain constructed on Cosmos. It should embody primary primitives corresponding to an order-matching engine and a unified liquidity mannequin, enabling sooner and simpler utility improvement than on general-purpose blockchains like Ethereum. The undertaking is backed by business heavyweights like Multicoin Capital, Coinbase Ventures, Delphi Digital, and GSR Ventures.

A New DeFi-Centered Layer 1

A brand new Layer 1 is coming to Cosmos, and there’s nonetheless time to check it earlier than its mainnet launch.

Sei’s workforce says it desires to develop a “decentralized Nasdaq.” The concept is to allow the creation of economic functions that may use the platform’s native order book-based decentralized trade.

This isn’t the primary time crypto tasks have experimented with a network-wide order-book trade. Solana had an analogous plan with its flagship DeFi protocol, Serum. The Solana-based order guide trade gives liquidity and token swaps for different DeFi functions within the Solana ecosystem. Initiatives like Mango Markets, Zeta, Solend, and Raydium use Serum as the bottom layer for operating functions on Solana.

Solana’s DeFi ecosystem topped $10 billion in whole worth locked in late 2021, however its utilization has plummeted because of the continuing crypto winter, frequent outages and hacks, and the collapse of the Solana-affiliated FTX trade. 

The overall worth locked on Serum dropped significantly in 2022 (Supply: Defi Llama)

Nevertheless, Sei Community will differ from Solana in a number of methods.

First, it should completely facilitate DeFi transactions, that means different functions in niches like NFTs and gaming gained’t clog the community. Second, as an alternative of utilizing a brand new consensus mechanism to enhance throughput, Sei’s workforce makes use of the tried and examined Cosmos Software program Growth Package, which ought to lead to extra stability and fewer downtime than Solana. 

Sei’s Semi-Decentralization

To attain the transaction speeds required to run a decentralized equal of New York’s quantity two inventory trade, Sei wants to supply swift execution instances within the order of microseconds (1 second = 10^6 µs). This requires some trade-offs in decentralization. Most notably, Sei will run a restricted variety of validators. It plans to launch with simply 50 validators on mainnet, making it one of many world’s most centralized blockchains. For comparability, BNB Chain, a Binance-run community broadly criticized for its lack of decentralization, has 41 validators.

Nevertheless, Sei would be the quickest Cosmos SDK chain if it achieves its goal of 300 to 400-millisecond transactions. The workforce has tweaked the fundamental Cosmos SDK design, which normally gives execution speeds of two to a few seconds, by implementing optimistic block manufacturing and parallel order execution.

Furthermore, ecosystem improvement on Sei won’t be permissionless like on Ethereum as a result of functions that need to construct on it must be permitted by governance. This might inhibit modern tasks within the vein of OlympusDAO from showing on Sei. Nevertheless, it should allow a extra optimized setting for the ecosystem’s managers. It’s anticipated that the founding workforce will completely make governance selections when it launches however will ultimately transition to a decentralized course of by handing off decision-making to SEI token holders.

Methods to Earn From Sei Community

The Sei Community mainnet launch is deliberate for the top of 2022. Nevertheless, as is typical of improvement schedules, the launch might be topic to delays. The workforce has already begun group improvement initiatives by operating an incentivized testnet since July 2022. The Sei workforce has acknowledged that testnet contributors will obtain 1% of the overall provide of SEI tokens.

The early testnet missions, corresponding to organising a Sei validator node, have in depth {hardware} necessities corresponding to 32GB RAM. Nevertheless, a number of the newer missions, corresponding to testing Sei’s first futures buying and selling platform, are extra accessible. You will discover our testnet information for getting concerned within the anticipated SEI token airdrop by way of SIMETRI.

In conclusion, Sei Community is a promising undertaking with respectable backing and technological design. Whereas there are some centralizing elements, these are compromises to make sure stability, pace, and excessive throughput. It stays to be seen whether or not Sei will reside as much as its expectations by way of efficiency as soon as it launches. Regardless, Sei’s greatest problem could develop into growing an lively DeFi ecosystem exterior Ethereum amid a grueling bear market.

Disclosure: On the time of writing, the writer of this piece owned BTC, ETH, and several other different crypto property. 

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