Sei Network is breaking new ground in the blockchain sector in H1 2024. It is the first IBC chain to support both CosmWasm and Solidity contracts, a significant leap in cross-chain technology. Sei also stands out as the first IBC chain with full native <> EVM interoperability, allowing for seamless token transfers that can be instantly used by EVM clients. This report delves into Sei Network's developments in H1 2024, examining how its innovative solutions are shaping the future of decentralized finance.
What is a Sei Network?
Sei is the pioneering parallelized EVM blockchain, combining the strengths of Solana and Ethereum to create a hyper-optimized execution layer. By leveraging the EVM, Sei benefits from existing tooling and community support while harnessing Solana's scalability. Built to address the limitations of existing blockchains, Sei employs innovative technologies to provide a robust and scalable environment for developers and users.
What is a $SEI token?
The native cryptocurrency of the Sei network is the $SEI token, serving multiple purposes within the ecosystem:
- Transaction Fees: $SEI is used to pay for transaction fees, ensuring smooth and efficient operations.
- Governance: Token holders can participate in network governance, influencing decisions on upgrades, policies, and other crucial aspects.
- Staking Rewards: Holders who stake $SEI earn rewards, incentivizing participation and securing the network. Click here to start staking with Everstake.
Sei staking involves locking $SEI tokens to support the network's operations and security. In return, stakers receive rewards in the form of additional $SEI tokens.
Active Users and Transactions
At the beginning of 2024, Sei experienced an influx of 21,700 new users, bringing the total to 174,200 active users. By February 11, the user base reached a milestone of 950,300 users, driven by the announcement of Sei v2 and heightened anticipation surrounding its v2 testnet launch.
Image 1 (Source: https://app.artemis.xyz/project/sei)
A significant increase in transactions was observed during this period. Another notable spike occurred from late May to early June, with daily transactions reaching 5 million as Sei v2 entered the launch phase. Additionally, the launch of Spell Wallet onboarded more than 300,000 wallets during this period.
Image 2 (Source: https://app.artemis.xyz/project/sei)
In Q1 2024, NFTs emerged as the dominant force in the Sei ecosystem, measured by monthly active addresses. The NFT sector stands out as one of the most active on the network.
Total Stake Growth
From the beginning of 2024 until March, the total stake on Sei grew actively. However, in March, a negative spike marked a significant downturn in the total stake, attributed to factors such as market corrections, changes in investor sentiment, or economic indicators.
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Stake Distribution Between Validators
The distribution of stakes among the top 15 validators in the active set appears quite proportional. In March, new validators like OpenZeppelin, PeckShield, Vertex by Sec3, and Zellic entered the top ranks. During this period, the Sei Foundation rebalanced its delegations, significantly altering the composition of the top validators.
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Delegators Distribution Between Validators
From the beginning of the year until mid-March, growth was observed across various metrics, including the number of delegators. The Rhino validator had the largest number of delegators, totaling 15,546, followed by Kingnodes with 4,820, sei0 with 4,091, and Everstake with 3,767.
However, sei0's number of delegators significantly declined in March, dropping from 11,247 to 4,244.
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Staked Ratio and APR
The staked ratio, expressed as a percentage, indicates how much of the total coin supply is currently being staked. A higher staked ratio generally reflects greater participation and confidence in the network's security and operation. APR (Annual Percentage Rate) refers to the annualized rate of return that stakers can earn.
The staked ratio remained relatively stable until mid-March. However, by the end of the month, it had declined from 61.12% to 59.12%.
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Sei v2: The First Parallelized EVM Blockchain
At the end of May, Sei Network entered the Phase 2 (Alpha Launch) of Sei v2 upgrade. Validators have upgraded their software, bringing Sei v2 to Mainnet. The transition to the v2 is divided into three phases:
Image 7, Source: Blog SEI
Sei v2 leverages the proven advantages of Sei and extends them to a global base of EVM developers. This enables Sei to harness the best of both Solana and Ethereum, offering a hyper-optimized execution layer that benefits from EVM tooling and community support.
This upgrade will enhance Sei's functionality in several key areas:
- Backwards Compatibility of EVM Smart Contracts: Developers can deploy audited smart contracts from EVM-compatible blockchains without any code changes.
- Reusability of Familiar Applications and Tooling: Widely used tools such as Metamask will be fully supported, simplifying the transition for users and developers.
- Optimistic Parallelization: The chain will support parallelization without requiring developers to define dependencies, improving efficiency and scalability.
- SeiDB: Improvements to the storage layer will prevent state bloat, enhance state read/write performance, and make it easier for new nodes to sync and catch up.
- Interoperability: The upgrade will enable seamless composability between the EVM and other execution environments supported on Sei, enhancing the network's versatility.
More about the Sei v2 you can read in the Sei blog.
Sei's Parallel Stack
Sei Labs introduced The Parallel Stack, a revolutionary initiative setting a new standard for high-performance Layer 2 solutions and rollups. The Parallel Stack aims to scale the EVM and represents a significant step forward.
Image 8, Source: Sei blog
At its core, The Parallel Stack is an open-source framework designed to create Layer 2s and rollups that leverage parallel processing. Building on the success of Sei v2, this innovative architecture aims to enhance the Ethereum ecosystem by addressing performance bottlenecks faced by current Layer 2 blockchains.
- Reduced Transaction Fees: Utilizing advancements in modern hardware, The Parallel Stack can significantly reduce transaction fees.
- Improved User Experience: Enhances the user experience for all Layer 2 rollups and applications built with this framework.
- Open-Source Framework: Provides a robust foundation for Ethereum developers, offering unparalleled customization.
- Strong Security Features: Maintains strong security features.
- Validator Set Option: Projects can opt to use Sei’s validator set for sequencing their Parallel chain.
This comprehensive overview highlights Sei's progress and innovations in the first half of 2024, setting the stage for continued growth and development in the blockchain ecosystem.
