David Canellis

Challenger blockchains Sui, Sei and Ronin are having a moment.&nbsp;



Their native cryptocurrencies have tripled in price over the past three months, outperforming all other layer-1 assets in the top-100 by market cap.



Market leaders bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>), ether (<a href="https://blockworks.co/price/eth">ETH</a>) and binance coin (<a href="https://blockworks.co/price/bnb">BNB</a>) meanwhile gained about 30% in that time. Solana (<a href="https://blockworks.co/price/sol">SOL</a>) and avalanche (<a href="https://blockworks.co/price/avax">AVAX</a>) nearly doubled.



<a href="https://blockworks.co/price/sui">SUI</a>, <a href="https://blockworks.co/price/sei">SEI</a> and <a href="https://blockworks.co/price/ron">RON</a> are far smaller cryptocurrencies with less liquid markets (all three combined are not even one-third of AVAX’s market cap), so increased volatility is to be expected.



Still, the data suggests those networks have garnered increased usage over the past few months, at least in the case of Sui and Ronin.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16788805/embed#?secret=SQj9RZfEkg" data-secret="SQj9RZfEkg" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">The market has gravitated towards newbie layer-1s</figcaption></figure>



Sui is a delegated proof-of-stake network built by former Facebook/Meta engineers, pitched as a high-performance blockchain that can execute transactions in parallel in hopes of faster throughput.



Sui’s total value locked (<a href="https://blockworks.co/tag/tvl">TVL</a>) has exploded from $90 million to $560 million in three months.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-price-ratios">Sui, Bittensor, Celestia top small pack with rising bitcoin price ratios</a>



SUI’s rally explains only a small part of that surge — there were 73 million SUI staked in its DeFi protocols at the end of October, now there’s more than 320 million.



Peer-to-peer lending platform Scallop, liquidity protocol Navi and decentralized exchange Cetus make up most of the network’s TVL right now.



All while some more established blockchains — BNB Chain, Avalanche and Polygon PoS — have seen their TVL shrink, even as crypto broadly staged powerful comebacks over the past year.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16790056/embed#?secret=Y5Uoe2OGnO" data-secret="Y5Uoe2OGnO" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">BNB Chain’s total BNB locked has trended downward since 2021</figcaption></figure>



Ronin, on the other hand, is the <a href="https://blockworks.co/tag/evm">EVM</a> blockchain for gaming communities, built by Axie Infinite creator Sky Mavis.&nbsp;



It’s perhaps most well-known due to the unfortunate hacking of its token bridge in 2022, when more than $650 million in crypto kept in the bridge&#8217;s smart contract was <a href="https://blockworks.co/news/sky-mavis-reopening-ronin-bridge-with-enhanced-security">stolen by North Korea-linked attackers</a>.



There were around 21,000 daily active users on Ronin three months ago. Now, that figure is up to 615,000 — led by Web3 decentralized identity service CARV and games Pixel and Apeiron.&nbsp;



The daily active users metric is notoriously squirrely in crypto. It represents the number of unique addresses which make at least one transaction per day, and can be gamed with bots and other sybil tricks.&nbsp;



It’s unclear if active user metrics have been artificially boosted for any of the networks mentioned in this piece, but best to read into them with a grain of salt.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16792769/embed#?secret=Rr4Buc2YQC" data-secret="Rr4Buc2YQC" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Bitcoin and Ethereum’s daily active addresses has mostly stayed flat over the past five years</figcaption></figure>



Sei, much like the similarly-named Sui, <a href="https://blockworks.co/news/sei-blockchain-v2-developer-network">is a network pushing parallelized processing</a>. San Francisco-based Sei Labs pitches it as the fastest layer-1 for trading, specifically tailored for decentralized exchanges and the like.



Uptake appears to be slow so far, with only $14.5 million SEI locked in its DeFi platforms right now.



And while that number has more than tripled in the past three months, most of that was due to SEI’s price appreciation — 450% in three months. The actual number of SEI tokens locked has dropped by more than a third since November.&nbsp;



On-chain volume on Sei has also dropped below $1 million per day, according to DeFiLlama, down from a $3.7 million peak in January.



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Layer-1

Sui price triples in 3 months, signals changing of the guard in DeFi

Jack Kubinec

The high-throughput blockchain Sei has upgraded its devnet, a developer-focused kind of testnet, to v2. With the new version, apps developed on Ethereum can be deployed on Sei with no changes. 



Sei is hoping to lure developers with an execution environment it says offers the “best of Ethereum and Solana.”



Sei’s Ethereum-Solana hybrid analogy is based on its use of parallelized processing. In brief, parallelized blockchains process multiple transactions simultaneously rather than one at a time. <a href="https://blockworks.co/tag/solana">Solana</a>’s version of smart contracts <a href="https://solana.com/docs/core/programs">make</a> use of parallel processing. <a href="https://blockworks.co/tag/ethereum">Ethereum</a> smart contracts do not.&nbsp;



<a href="https://blockworks.co/tag/sei-network">Sei</a> is one among multiple studios courting developers with the promise of a parallelized Ethereum Virtual Machine (<a href="https://blockworks.co/tag/evm">EVM</a>) — and perhaps a more scalable version of Ethereum’s execution environment.&nbsp;



Sei <a href="https://blockworks.co/news/sei-airdrop-farmers">went live alongside an airdrop of its token</a> in August. Sei Labs, the team developing the blockchain, told Blockworks in January that its next version would involve a move to the EVM. Before the upgrade, Sei ran on the Cosmos ecosystem’s CosmWasm smart contract platform, meaning Ethereum apps couldn’t run on Sei.&nbsp;



At the time, Blockworks noted that other outfits, including Neon and Monad, were working on parallelized EVMs as well.&nbsp;



Read more: <a href="https://blockworks.co/news/parallelized-evms-gaining-popularity">Parallelized EVMs are gaining popularity, but they won’t scale blockchains alone</a>



Sei is now backwards compatible with Ethereum smart contracts, meaning developers can deploy onto the newer chain without changing their code.&nbsp;



“While for some developers the current offering of EVM blockchains and <a href="https://blockworks.co/tag/rollups">rollups</a> is sufficient, the majority face bottlenecks as they attempt to scale their application,” Sei Labs co-founder Jay Jog said in a press release.&nbsp;



In a blog post accompanying the upgrade, Sei said its parallelized EVM would be able to handle thousands of transactions per second (TPS).&nbsp;



For context, Ethereum has handled 62 TPS at its best, while the popular Ethereum scaling solution Arbitrum hit a peak of 380 TPS, according to a <a href="https://chainspect.app/dashboard?range=7d&amp;sort=maxTps&amp;order=desc">dashboard</a> compiled by Chainspect. Solana’s highest TPS was roughly 1,600 TPS.&nbsp;



The public devnet is aimed at developers building with Sei — and functions like a testnet from a user’s perspective. Sei hopes to go to mainnet sometime in the first half of 2024, a spokesperson for the team said. 



Sei has <a href="https://flipsidecrypto.xyz/saeedmzn/new-users-on-sei-new-users-on-sei-xCbORs?tabIndex=1">tacked</a> on over 200,000 new users in the past month, according to a Flipside dashboard. Of these new users, a large majority appear to be <a href="https://flipsidecrypto.xyz/saeedmzn/new-users-on-sei-new-users-on-sei-xCbORs?tabIndex=1">trading</a> NFTs.



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Developers

Ethereum devs can now deploy apps on Sei’s parallelized EVM

Andrew Thurman

The latest buzzy layer-one network to launch has run into turbulence in its first few days amid widespread complaints that its airdrops to early users and testers were overly stingy.&nbsp;



Sei Network, a trading-focused layer-1, announced the launch of its “mainnet beta” stage on Tuesday. The latest base layer to jockey for attention possesses significant backing, having raised $120 million from investors such as Coinbase, Multicoin and GSR. In a recent press <a href="https://www.bloomberg.com/press-releases/2023-04-12/foresight-ventures-brings-sei-ecosystem-fund-to-120-million-catalyzing-web3-growth-and-innovation">release</a>, the team boasted former executives from Goldman Sachs, Robinhood, Google and Nvidia.



Despite the prestige, the network has so far faced a rocky start fueled in part by disgruntled airdrop farmers.&nbsp;



Airdrops are a common method for new networks to distribute governance tokens to key stakeholders who perform certain useful actions, such as bridging funds to a network, testing dapps, or participating in a testnet. Airdrop farmers, in turn, refer to users who perform those actions aggressively or with multiple wallets in order to reap a disproportionate reward. 



Many of those users are now taking to social media to express <a href="https://twitter.com/Auri_0x/status/1692143804957052934">dissatisfaction</a> with the terms of the airdrop. 



Read more: <a href="https://blockworks.co/news/sei-mainnet-beta-trading">Optimized for trading, Sei launches mainnet beta</a>



The trouble began shortly after the launch of the network. In a blog <a href="https://blog.sei.io/the-sei-airdrop/">post</a> on Tuesday, company representatives implied that airdrop claims would be open at the launch of the network. However, in a follow-up Tweet from an official account, it was revealed that tokens would be claimable after an indeterminate “<a href="https://twitter.com/SeiNetwork/status/1691428585054044161">warmup</a>” period, leading to widespread <a href="https://twitter.com/rektfencer/status/1691431123308453888">complaints</a>.&nbsp;



Once claims did go live on Thursday, users began to complain about the paltry sums distributed, enough so that the hashtag “SeiScam” was trending for certain <a href="https://twitter.com/DrNickA/status/1692054730464170455">users</a>.&nbsp;



According to airdrop expert <a href="https://twitter.com/CC2Ventures">CC2</a>, the core of the complaints centered on which parties the Sei Foundation chose to focus on for rewards.&nbsp;



“Testnet users that diligently filled out their &#8216;incentivized testnet&#8217; forms on a daily basis for weeks got rewarded with $5 worth of SEI and referrals haven&#8217;t been honored,” they wrote in an interview with Blockworks. “Instead, you can bridge $10k in and apparently get over 5k SEI tokens, once again rewarding whale behavior.”



While some early testnet participants reported scant rewards, Sei continues to incentivize users to deposit funds via bridges to the network on an ongoing basis. Today, the Sei Foundation said that it raised the cap for this ongoing program from a half million <a href="https://twitter.com/Sei_FND/status/1692070808783368592">wallets</a> to 1.5 million due to “fervent demand.”



The popularity of this farming strategy is such that research firm ASXN noticed a price spike for assets that easily bridge over Cosmos, on which Sei is built:&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Assets bridgeable to the <a href="https://twitter.com/SeiNetwork?ref_src=twsrc%5Etfw">@SeiNetwork</a> are jumping higher as participants try to capture the $1k in SEI airdrop for bridging in &gt; $10k of assets. <a href="https://t.co/YNmlJYgLMa">pic.twitter.com/YNmlJYgLMa</a>&mdash; ASXN (@asxn_r) <a href="https://twitter.com/asxn_r/status/1692170157593100583?ref_src=twsrc%5Etfw">August 17, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



However, many users report being unable to bridge funds back off the chain after having claimed their airdrop. The Sei Foundation reported earlier today that the Wormhole bridge had <a href="https://twitter.com/Sei_FND/status/1692064191773802763">reached</a> its “daily limit.”



Sei is down 6.8% on the day to $0.179.



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airdrop

Farmers complain of barren fields after Sei airdrop

Bessie Liu

Following a testnet phase that featured 7.5 million unique wallets and over 400 million transactions, Sei Labs, the team behind the Sei Blockchain, has launched the network&#8217;s mainnet.



According to the project’s documentation, this blockchain is specifically designed for seamless trading and the efficient exchange of digital assets.



Sei has one fundamental core belief, Jeff Feng, the co-founder of Sei Labs told Blockworks in an interview.&nbsp;



“We believe that the fundamental use case of blockchains is the ability to exchange digital assets,” Feng said.&nbsp;



Unlike its competitors such as <a href="https://blockworks.co/tag/solana">Solana</a>, <a href="https://blockworks.co/tag/sui">Sui</a> or <a href="https://blockworks.co/tag/aptos">Aptos</a>, Feng claims that Sei is one of the fastest chains to finality — noting that it can process up to 20,000 transactions in under 500 milliseconds. By comparison, it says Solana can process up to 10,000 transactions every 2.5 seconds.&nbsp;



This is because Sei’s consensus mechanism uses a “single slot finality,” — which means that it takes fewer blocks to reach consensus. The downside is that if validators disagree on a block, the network may temporarily shut down. 



Read more: <a href="https://blockworks.co/news/consensus-mechanisms-guide">The beginner’s guide to consensus mechanisms</a>



Developers initially constructed Sei with the Cosmos software development kit (SDK), but Feng says that they have since entirely rebuilt it from top to bottom.



“Sei has nothing to do with Cosmos,” Feng said. “Our engineering team has spent over the last two years building around or removing a lot of the trade-offs to continue to uplevel and improve the infrastructure.”



Though this is the case, Feng acknowledges that the Sei network has benefited from starting its design with <a href="https://blockworks.co/tag/tendermint">Tendermint</a> and the Cosmos SDK.&nbsp;



“There haven’t been any security drawbacks that have ever happened with Cosmos or any underlying technology that Sei started with,” he said.



The Sei network will feature 30 to 40 validators during its mainnet launch, and only one or two of these will be managed by Sei Labs. With the vast majority of <a href="https://blockworks.co/tag/validator">validators</a> being independent, Feng asserts that this design reduces the network’s vulnerability to a 51% attack.



So far, over 250 teams have confirmed they will deploy on mainnet, and around 20 teams will be ready from day one. Notably, <a href="https://blockworks.co/tag/sushiswap">SushiSwap</a> will also be deploying on SEI; an achievement that Feng says he is proud of. 



“SushiSwap historically has only copied and pasted their automated market maker (<a href="https://blockworks.co/tag/amm">AMM</a>) to 15 different <a href="https://blockworks.co/tag/evm">EVM</a> parallel chains; SEI is the only chain where they are writing brand new contracts in a completely different smart contract language for a completely new application,” Feng said.



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Cosmos

Optimized for trading, Sei launches mainnet beta

James Cirrone

Fundraising for crypto startups came in at about $88.5 million this week, with 13 different companies raising money — a precipitous decline from last week’s $251 million.&nbsp;



Sei Labs, the company behind layer-1 blockchain Sei, raised $30 million in its two strategic fundraising rounds. A long list of companies invested, including but not limited to Jump Crypto, Distributed Global, Multicoin Capital and Asymmetric.



The capital raise will fund Sei Labs’ expansion into the Asia-Pacific region, according to a press release.



Sei Labs had its start in August 2022 when <a href="https://blockworks.co/news/in-nod-to-multichain-future-startup-layer-1-eyes-solana-scaling-solution">it raised $5 million</a> from Multicoin Capital, Delphi Digital and Coinbase Ventures, and with its latest fundraise, it’s grown to a $800 million valuation. The startup was founded by former Goldman Sachs alum Jeff Feng and ex-Robinhood software engineer Jayendra Jog.&nbsp;



<h2 class="wp-block-heading">A focus on marketing solutions and wallet security</h2>



Absolute Labs, a marketing platform built for Web3 and DeFi clients, announced an $8 million seed funding round with investors Aglaé Ventures, MoonPay, Near Foundation and Samsung Next, among others.&nbsp;



Founder and CEO Samir Addamine told Blockworks there are inherent privacy lapses with Web2 marketing. Cookies, emails and demographic data are all used by Web2 marketers, Addamine said, adding that he hopes to reverse that trend with his company’s new wallet relationship management platform.



Addamine also said he wants the WRM platform, which took 12 months to develop, to be the marketing solution up and coming Web3 companies turn to, as well as established Web2 companies.



“Metaverse, NFT publishers, marketplaces, DeFi and CeFi&nbsp; are all in need of marketing products,” Addamine said. “In a bear market, you want to get closer to your customers…you want to be able to communicate with them. And we built a whole platform to do that from acquisition, conversion to loyalty, what we call retention.”



Shifting over to wallet security, Wallet Guard raised $1 million in its pre-seed round concluded in December, Probably Nothing co-founder Aaron Ahmadi told Blockworks.&nbsp;



Wallet Guard is a browser extension that links up with a user&#8217;s self custody wallet and preemptively issues warnings when they fall victim to phishing attempts.



That is essentially what happened to Kevin Rose, when <a href="https://blockworks.co/news/lessons-from-proof-founder-kevin-roses-1-4m-nft-phishing-experience">he lost 40 NFTs</a> worth up to $1.4 million in January.



Wallet Guard founder Ohm Shah told Blockworks he wants to prevent exploits like this. “Providing multiple layers of defense is really what&#8217;s needed for end users in Web3, since it&#8217;s kind of the wild, wild west, and nobody really knows unless you have a deep technical expertise.”



According to Wallet Guard’s investor announcement, the tool has detected 13,000 scams and has saved about $3 million in assets as of March 2023.



<h2 class="wp-block-heading">Other notable funding rounds this week&nbsp;</h2>



<ul class="wp-block-list">
<li>Digital art marketplace HUG <a href="https://www.prnewswire.com/news-releases/social-marketplace-hug-raises-5m-seed-round-led-by-digital-okx-ventures-to-build-creator-first-commerce-for-artists-301794884.html">raised $5 million</a> in a seed round including OKX Ventures and DIGITAL as investors.</li>



<li>CAT Labs, a startup focused on unveiling crypto-enabled crime through forensic tools, <a href="https://twitter.com/CatCryptoLabs/status/1646138486037020672">pulled in $4.3 million</a> in a pre-seed round from Castle Island Ventures, Brevan Howard Digital, CMT Digital and RW3 Ventures.</li>



<li>NFT market maker Protecc Labs <a href="https://twitter.com/proteccxyz/status/1646876544847978500?s=46&amp;t=_qzlqhAl3bGz_TLGa29tRg">announced a $1.5 million seed</a> round led by Dialectic.</li>
</ul>



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Funding

Crypto Funding Slows: Sei Labs Is Standout Firm in $88.5M Week

After securing a total of $70 million in ecosystem funding in just eight months since its inception, Cosmos based DeFi Layer 1 blockchain — Sei — is looking to expand into Asia in the year ahead.



When the network first launched, the projects which joined Sei were mostly ones who were bullish on the core technology, co-founder Jayendra Jog told Blockworks. But, since the Terra implosion and the collapse of FTX, Sei began seeing an influx of teams coming from different ecosystems.



Now, with over 100 projects developing on the blockchain, Jog wants to expand the presence of his network into Asian markets, citing the region’s technological advancements and high rate of crypto usage, as well as the presence of exceptional developers.



“Crypto is already very big in Asian markets overall — South Korea, for example, has a ridiculously high rate of people using crypto in general…there are also exceptional developers, a lot of them are building stuff in crypto more broadly, we want to help get the word out about Sei, so they can build the best possible products for their users on top of this infrastructure,” he said.



The company has taken several steps towards this goal, including partnering with Graviton, a Web3 accelerator based in India, and launching a <a href="https://twitter.com/SeiNetwork/status/1611453192838979600" target="_blank" rel="noreferrer noopener">world tour</a> for the crypto community to meet in person.



<h3 class="wp-block-heading">So, What is Sei?</h3>



Sei is the brainchild of ex-Goldman banker Jeff Feng and Jog, a former Robinhood software engineer who has been involved in the cryptocurrency industry since 2017.



Jog said that he was motivated to create Sei after observing poor communication and lack of transparency at Robinhood following the GameStop stock trading frenzy in 2021.



“This is what we wanted to build a decentralized Robinhood originally, but are no longer doing that,” Jog said. “Through the process of building an exchange, we realized that the infrastructure to build exchanges is lacking, which is the problem Sei is solving.”



As Sei is not an exchange, and only an L-1 chain, it does not compete directly with projects such as Osmosis, Crescent and other dexes on the Cosmos.&nbsp;



“Sei is only building the infrastructure, and no exchange on top. The other ecosystems are building both,” Jog said. “From a technical side, Sei has a native order matching engine built into the chain itself, which helps prevent front running through frequent batch auctions, which doesn&#8217;t happen on any of those other chains.”



As Sei is taking an ecosystem building approach, teams are encouraged to build on the blockchain layer. Jog said the network is unlikely to run into CLOB-related issues as its infrastructure has been custom built for exchange.&nbsp;



“We have an in built scalable native order matching engine, which makes it very cheap for market makers to provide liquidity, allows them to batch orders (so only submit 1 transaction to update orders on multiple markets), and the fastest time to finality out there (600 ms in devnet) which leads to a better trading experience,” he said.



The Sei network is built using the Cosmos software development kit (SDK) and Tendermint core. Its testnet which was launched in May last year supports inter-blockchain communication (IBC) and has already connected with a dozen chains in Cosmos.



But as with many Cosmos-based chains, Sei is a fully sovereign layer-1 network which makes use of its own validator set, Jog said. Although it does not plan to make use of <a href="https://blockworks.co/news/cosmos-is-forging-a-new-atom-starting-with-interchain-security">the first iteration of interchain security (ICS)</a>, Jog notes that it could make use of a subsequent version ICS and mesh security.



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<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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