What is Sei Crypto? Explained for Beginners

Sei Network’s Plan for a New Era in Decentralized Trading

Sei Network quickly made a name for itself in the busy world of Layer 1 blockchains, setting itself apart as a platform specifically built for trading activities. But what is Sei crypto, and why is it gaining so much attention? When its mainnet went live in August 2023, it became clear Sei was more than a standard blockchain, offering instead a specialized framework that gives decentralized exchanges (DEXs), NFT platforms, and emerging GameFi ventures professional-level speed and affordability. The network uses the Cosmos SDK, is open for anyone to use and contribute to, works without needing permission from a central authority, is spread across the globe, and intends to elevate what’s expected from decentralized trading systems.

The primary ambition behind Sei involves building the best possible setup for people to trade digital property. A key goal is to make decentralized apps work as fast and smoothly as today’s regular internet services, but without giving up the open, user-controlled nature of Web3.

Getting Past the Hurdles in Decentralized Trading

Sei takes aim at several long-standing problems that have made trading on many existing blockchains difficult:

• The Slow Pace of Transactions: Numerous blockchains struggle with how long it takes to confirm transactions, a major drawback in trading where even tiny delays can affect profits. Sei addresses this with its “Twin-Turbo Consensus,” a refined version of Cosmos’ Tendermint system, created to finalize blocks in less than 400 milliseconds for almost immediate transaction handling.
• Scaling Problems When Busy: As more people use blockchains, networks often get clogged, causing high fees and slow performance, a frequent issue. Sei was designed from the ground up to handle many transactions, with some reports saying it can manage thousands every second. Its ability to process different transactions at the same time greatly improves how much it can handle and how efficiently it runs.
• Ineffective Order Matching: Standard Automated Market Makers (AMMs) found on versatile blockchains often don’t use capital very well. Sei brings a fresh approach by including its own order matching system, a Central Limit Order Book (CLOB), right into its main Layer 1 code. This helps developers create more advanced and scalable DEXs.
• Clunky User Experience: Difficulties like slow operations, expensive fees, and confusing interfaces have kept mainstream users away from decentralized trading. Sei wants to offer a user experience that feels as responsive as Web2 applications, making it easier for people to get started.
• Helping Developers and Opening Doors to EVM: Sei utilizes the flexible design of the Cosmos SDK and, with its V2 update, has adopted the Ethereum Virtual Machine (EVM) through a version that can run processes in parallel. This smart decision lets Ethereum developers bring their current smart contracts and familiar development tools to Sei with few changes, while also getting Sei’s better performance. This connection also helps bridge the Cosmos and Ethereum ecosystems, which is very important.
• Stopping Front-Running: Front-running, a consistent problem where some can take advantage of transactions that are about to happen, is something Sei tries to prevent. The platform has built-in features meant to guard against these kinds of exploitative tactics.
• Connecting to More Liquidity: By using the Inter-Blockchain Communication (IBC) protocol to link with the Cosmos ecosystem and by supporting EVM, Sei can tap into larger sources of available funds.
• Solving the Exchange Trilemma: Sei clearly states its intention to overcome the “exchange trilemma,” which is the difficulty of making exchanges that are scalable, decentralized, and use capital efficiently all at once.

The latest Sei v2 update reinforces this dedication by adding elements like support for two execution environments (allowing EVM and Wasm to work together) and major improvements to how many transactions it can handle, further cementing Sei’s role as a trading specialist.

Inside Sei: What Gives It a Technical Advantage

Sei’s remarkable speed and capacity aren’t by chance; they result from a carefully constructed set of technologies.

1. Twin-Turbo Consensus: The Speed Driver

At the heart of Sei’s quickness is its Twin-Turbo consensus, an enhanced take on the popular Tendermint consensus. This system brings two key improvements:

• Smarter Block Sharing: Instead of first sending out whole blocks with all transaction details, Sei’s block creators initially share condensed block proposals. These proposals have unique codes for transactions and a pointer to the full block. This greatly lessens the amount of data sent right away, speeding up the first part of sharing. Validators can then piece together the block using transactions they already have locally, only asking for the full block if they really need it. This method is said to cut down on unneeded delays and could increase transaction capacity by over 40%.
• Proactive Block Processing: Validators on Sei don’t just wait for the usual pre-vote and pre-commit parts of consensus to finish before they start working on transactions. They optimistically begin processing transactions from a block proposal they’ve received, temporarily saving the possible new state. If that block later turns out to be invalid, these saved changes are just thrown out. Handling block proposals at the same time as consensus steps significantly shortens delays and is reported to increase capacity by about 33%.

Together, these enhancements aim for a very quick transaction finality, under 400 milliseconds. Some tests have even clocked speeds near 380ms, and internal test networks might even hit a low of 300ms.

2. Foundational Elements for Performance

Developed with the Cosmos SDK, Sei’s design allows for easy modification and smooth connections with other blockchains that use IBC.

• Parallel Processing Activated: Sei is built to manage several transactions simultaneously.
  • Market-Specific Parallelism (Early Focus): At first, Sei focused on handling orders from different markets at the same time, while orders within the same market were processed one by one to ensure consistent results.
  • Optimistic Parallelism (Sei V2): The V2 update introduced a system where the chain tries to run transactions in parallel by default. If there’s a clash (like transactions trying to change the same data), only those specific conflicting transactions are redone one after another. This pushes throughput to its maximum without making developers manually define how data is accessed.
• Built-in Order Matching System: An order matching engine included at Layer 1 helps developers create DEXs with on-chain CLOBs more easily, as they don’t have to build this matching logic themselves.
• SeiDB: Streamlined State Storage: To cope with the large amounts of data and high transaction numbers typical of trading, Sei created SeiDB, a specialized database layer.
  • Two-Part Design: SeiDB uses a two-layer system: the State Commitment (SC) layer and the State Storage (SS) layer. The SC layer employs a memory-mapped IAVL tree (MemIAVL) for the current state of the chain, allowing for quick access to transaction data. The SS layer keeps historical data as simple key-value pairs, designed for efficient searching and to prevent the storage from getting too large.
  • Performance Benefits: SeiDB is intended to markedly speed up block confirmation, shrink the size of the state data, make it faster for new nodes to sync up, and generally improve how quickly data can be read and written.
• EVM Compatibility (Sei V2): The V2 update brought a parallelized EVM, which lets developers use existing Ethereum smart contracts with little or no code modification, allowing them to take advantage of Sei’s underlying speed. Sei nodes incorporate Geth to process EVM transactions.
• CosmWasm Integration: Besides EVM, Sei also works with CosmWasm, which means smart contracts can be written in languages like Rust. The V2 update aims for EVM and CosmWasm smart contracts to be able to interact.

3. Achieving High Speeds and Throughput

The transaction speeds and handling capacity Sei reports are the combined result of these technologies:

• Extremely Low Delay: The Twin-Turbo consensus, especially its optimistic block processing and smart block sharing, greatly shortens the time to final confirmation, targeting below 400ms.
• Huge Capacity: Running transactions in parallel (both market-based and optimistic methods) lets the network handle a much larger number of transactions per second (TPS). SeiDB’s efficient storage also helps process things faster. Early estimates suggested theoretical TPS numbers could reach 12,500, with some sources even citing up to 22,000 orders per second. The ambitious “Sei Giga” upgrade, part of the “Autobahn” consensus protocol plan, strives for a capacity that might eventually manage around 200,000 TPS.
• Tailored for Trading: By concentrating on trading, Sei tunes all its technology for the tough demands of this area.
• Frequent Batch Auctioning (FBA): To deter front-running, Sei uses FBA, a method that groups market orders and clears them at a single price, making it harder to unfairly benefit from transaction sequencing.

In short, Sei’s technological base is a thoughtfully designed system created to move beyond the usual blockchain limits on speed and capacity, particularly for trading applications.

What Makes Sei Different?

Sei’s intense concentration on optimizing for trading helps it stand out in the crowded Layer 1 field.

• Twin-Turbo Consensus: This system, with its intelligent block sharing and proactive block handling, offers a clear speed benefit.
• Native Order Matching Engine: Including CLOB features directly in the base layer is a key distinction, aiming for more effective and scalable trading than systems that depend on AMMs or order books built with smart contracts.
• Optimistic Parallelization & Parallelized EVM: Sei V2’s introduction of optimistic parallel processing for EVM applications boosts capacity with little extra work for developers, a notable improvement.
• Cosmos Connection & EVM Bridge: Developed using the Cosmos SDK, Sei uses IBC for communication between chains, and its parallelized EVM seeks to link the Ethereum and Cosmos worlds.
• SeiDB for Efficient Storage: The V2 upgrade delivered SeiDB, a vital improvement for managing high volumes of data and keeping storage bloat down.
• MEV Reduction: Methods like Frequent Batch Auctioning are intended to foster a more equitable trading space by making front-running less appealing.

Compared to Others:

• Solana: While Solana is known for handling many transactions, Sei strives to improve performance even more with its Twin-Turbo consensus and parallelized EVM, potentially offering quicker processing and EVM support, along with its unique built-in order matching.
• Aptos and Sui: These chains also highlight parallel processing. Sei sets itself apart with optimizations for trading like its native order matcher, its distinct consensus mechanism for low latency, and how it integrates EVM within the Cosmos environment.
• Injective: Also a Cosmos SDK chain centered on DeFi and order books, Injective has different specific consensus methods, a wider parallelized EVM approach (not just for CosmWasm), and its own techniques for reducing MEV.

Sei’s approach relies on deep specialization, bringing together fast consensus, built-in order book features, and strong parallel processing across various virtual machine setups.

The People and Progress of Sei

Sei was started in 2022 by Jayendra Jog, who previously worked as a software engineer at Robinhood, and Jeff Feng, who has experience from Yelp, Goldman Sachs, and Coatue Management. Sei Labs, the main team, includes people from major tech and finance companies like Google, Goldman Sachs, Nvidia, and Airbnb.

Important Dates:

• 2022: Sei was founded.
• August 16, 2023: The public mainnet became active, along with an airdrop.
• February 13, 2024 (or possibly earlier for devnet): The public development network for V2 features opened. (Some information might point to earlier V1 devnet stages.)
• May 2024: The Sei V2 upgrade began rolling out, bringing the parallelized EVM, optimistic parallelization, and SeiDB. This upgrade was crucial, intended to greatly enhance performance and make things easier for developers.
• Ongoing – Giga Upgrade: This future update plans to massively increase Sei’s transaction handling capacity, possibly by 50 times, with elements like a rebuilt EVM client and asynchronous execution.

Funding the Dream: Investment Rounds

Sei has attracted considerable financial support:

• August 2022 (Seed): $5 million, with Multicoin Capital leading, and participation from Coinbase Ventures, Delphi Digital, and others.
• April 2023 (Series A/Strategic): $30 million from investors like Jump Capital, Distributed Global, and Circle, which reportedly valued the project at $800 million.
• The Sei Foundation also created an ecosystem fund of over $100 million to support project growth, including a $10 million Creator Fund with Gitcoin. Some reports mention a total of $35 million raised through various rounds.

SEI Token: Powering the Ecosystem

The SEI token is essential for the network’s functions, security, and decision-making.

• Uses:
  • Network Charges: Used to pay for transactions on the Sei blockchain.
  • Staking (DPoS): Helps secure the network when users delegate SEI to validators or operate a validator node, earning rewards for doing so.
  • Governance: Allows token holders to participate in votes on protocol changes and ecosystem growth.
  • Native Collateral: Can be used as liquidity or backing for decentralized applications on Sei.
  • Validator Incentives: Users can tip validators to get their transactions processed faster.
  • Trading Costs: Covers fees on exchanges built on Sei.
• Token Details:
  • Total Amount: There will only ever be 10 billion SEI tokens.
  • How It’s Shared: Ecosystem Reserve (48%), Team (20%), Private Sale Investors (20%), Foundation (9%), Binance Launchpool (3%).
  • Currently Available: Around May 2025, about 2.86 billion SEI tokens are actively circulating. The rest are scheduled for release over time.
  • Inflation/Deflation: New tokens are created through staking rewards; the fixed total supply and possible future token burns could create deflationary effects.

The SEI token plays a key role in network safety via its DPoS system and gives the community power in governance, helping the platform develop according to what its users and backers want.

A Growing and Active Ecosystem

Sei’s concentration on trading and high speed, boosted by the V2 upgrade’s EVM support, is helping a quickly growing ecosystem take shape.

• DeFi Center: Projects like the DEXs Astroport and Dragonswap, plus liquid staking services such as Silo Stake and Kryptonite Finance, are becoming more popular. The total amount of money locked (TVL) on Sei has increased noticeably, recently sitting around $33.37 million in late May 2025, showing more capital is coming in.
• NFTs and Gaming: Marketplaces like Pallet Exchange are up and running. The network’s ability to handle many transactions is drawing play-to-earn (P2E) games.
• Infrastructure & Tools: There’s strong support with wallets like Compass Wallet and Fin Wallet, EVM-friendly choices like MetaMask, data services, and bridges such as Axelar Network.
• Developer Engagement: The Sei V2 upgrade has acted as a spark, attracting developers who want Solana-like speed combined with Ethereum’s developer environment. As of May 2025, reports indicated 14 developers were actively building.

More Than Just Trading: A Variety of Uses

While trading is its main strength, Sei’s design can handle a wider array of applications:

• Sophisticated DeFi: Platforms for financial derivatives, perpetual contracts, synthetic assets, and pooling liquidity across different chains.
• GameFi: Smooth trading of in-game items and high-performance economies within games.
• NFTs: Effective marketplaces and a range of applications centered around NFTs.
• Tokenizing Real-World Assets (RWA): An infrastructure built for institutional-level asset trading, with a specific focus on this expanding area.
• Social Platforms & DeSci: Supporting social networks on the blockchain and looking into new uses in Decentralized Science, like secure on-chain data handling.

Watching the Market: SEI Token’s Journey

Around late May 2025, the SEI token was valued at approximately $0.53. Its total market value is about $1.53 billion, with around $65.7 million traded in a 24-hour period. The token hit its peak price of $1.14 in March 2024 and its lowest point of $0.095 in October 2023. Like any cryptocurrency, SEI’s value is shaped by general market feelings, ecosystem development, tech advancements, and what competitors are doing.

Adoption Growing: Important Network Numbers

Sei has seen considerable growth in how much people are using it:

• Active Users: Recent figures from May 2025 show roughly 38,000 daily active addresses.
• Transaction Numbers: The network handles about 533,000 transactions each day.
• These numbers highlight an expanding group of users engaging with the Sei ecosystem.

Strategic Partnerships Driving Expansion

Sei consistently forms partnerships in DeFi, infrastructure, and security to improve its features and draw in users. Working with oracle services like BandProtocol and Pyth, cross-chain communication tools like Axelar and Wormhole, and infrastructure companies like Alchemy is very important. Programs such as MEXC Global’s $20 million ecosystem fund and the Sei Foundation’s Creator Fund with Gitcoin also help encourage development.

The Competitive Field

Sei finds itself in a very competitive L1 market:

• Solana (SOL): Known for high capacity, but Sei aims to provide similar or better speed along with EVM support and specific trading enhancements.
• Aptos (APT) & Sui (SUI): These also emphasize scalability and use the Move language. Sei stands out with its trading-focused design and Twin-Turbo consensus.
• Injective (INJ): Another Cosmos-based DeFi chain, Sei differentiates itself through its distinct consensus mechanism and more comprehensive parallelized EVM strategy.

Sei’s advantage comes from its sharp focus on trading, its built-in order-matching system, protection against front-running, and quick transaction finality.

How Sei Could Transform DeFi

Sei’s high-performance setup has the potential to greatly change DeFi by allowing for more effective DEXs, new types of financial tools, better use of capital, and scalable lending and borrowing systems. Its EVM compatibility and connection to Cosmos further increase its ability to attract funds and developers, establishing new benchmarks for performance.

What’s Next: V2 and the “Giga” Plan

The complete deployment and fine-tuning of Sei v2, featuring its parallelized EVM, improved performance (aiming for 390-500ms finality and high TPS), and SeiDB for better storage, is a top current goal. Further down the line, the “Giga” roadmap lays out a bold strategy to scale Sei’s performance to “Web2 levels,” possibly reaching up to 250,000 TPS through a redesigned EVM, new consensus methods, and increased storage. Key aims include widespread adoption, ongoing specialization in DeFi, and expanding the ecosystem, with a particular eye on Real-World Assets (RWAs) and Decentralized Science (DeSci).

Understanding the Risks and Practicalities

Sei, similar to any new venture, encounters difficulties: technical challenges in solving the “Exchange Trilemma,” strong competition from other L1s, market ups and downs affecting its token, and the constant requirement for strong security against potential attacks. The changing rules for digital assets also present an area that needs careful attention.

Security: A Comprehensive Strategy

Sei makes security a high priority through thorough checks by companies like CertiK and Zellic, continuous collaborations with security experts such as ExVul, and an active bug bounty program with Immunefi to encourage people to find and report weaknesses. Its PoS consensus, based on Tendermint Core, offers a solid security base.

Governance: Led by the Community

Decision-making on Sei happens through SEI token holders, who can cast votes on proposals, including those put forward via the Sei Improvement Proposal (SIP) system. This DPoS approach aims for decentralized choices, although Sei Labs and the Sei Foundation still play a large role in steering development.

Community Talk: EVM Focus Stirs Debate

Recent conversations have revolved around ideas like SIP-3, which proposes a possible move to an EVM-only setup to make the network simpler and boost performance, considering EVM transactions have become dominant after V2. This shows an engaged governance system that reacts to how the network is being used, generally met with measured optimism from a community keen on performance and ease of use for developers.

Sei’s path is marked by bold engineering and a clear strategy, with the goal of changing what trading can be in the decentralized age. As it deals with market complexities and keeps innovating, its effect on the wider crypto world will be keenly observed.