While many Layer 1 blockchains were built for a fairly general purpose, other networks were designed around very specific use cases.
Sei, a layer 1 blockchain designed for trading, has launched an ecosystem and a $50 million liquidity fund to support new decentralized finance (DeFi) applications on its platform, its partners exclusively said. co-founders Jeff Feng and Jay Jog at TechCrunch.
“As for the ecosystem, if you think about all of crypto, especially on-chain applications, there are only a few applications that are really suitable for the product market,” Feng said. “Everything else is super, super early despite the valuations they have. Solana is effectively like a Series C startup with a huge valuation.
With many layer 1 blockchains, a lot of the things that everyone does “is a ‘startup’, it’s a house of hackers – things that don’t scale but are huge for their ecosystem,” Feng said. “The few applications that have been adapted to the product market are like DeFi and stablecoins. We know for sure that exchanges are here to stay.
The core value proposition for Sei is focused on specializing a layer-1 blockchain, Feng said. “You can now do things that you couldn’t do in another ecosystem because we made compromises that no other L1 did.”
All Layer 1 blockchains – except Ethereum – operate like early-stage startups, Feng thinks. “For them it’s about focusing on the end user, but for us it’s about focusing on the developer.”
Crypto exchanges make the most — if not the most — money for the space, but the current Layer 1 infrastructure is holding back many exchanges, Jog said.
“Most exchanges have smart contracts above layer 1 [blockchains], so if you’re trying to improve the performance of the exchange, there’s really nothing you can do about Layer 1,” Jog said. “In our case, we added a command matching engine in Layer 1 itself, which dramatically improves performance and trading experience.”
So far, Sei’s ecosystem has more than 50 teams, mostly from blockchains like Solana, NEAR, Polkadot, and the defunct Terra, Feng shared.
“These are teams that have already raised VC funds and launched their applications, but felt that their current layer 1 ecosystems lacked what allowed them to really scale and provide the best user experience, that’s why they came to see us,” Feng said. . “All these teams came without any prompting.”
So far, Sei has not spent any money on grants for the ecosystem, Feng noted. But the new fund will help develop its ecosystem and encourage “good founders” to come and create applications on its blockchain.
“It’s a generational time to build,” Feng said. “When you think about crypto from a risk and reward perspective. If you look back to 2017 or 2018, it was really risky. There were no real applications or a lot of capital, it was a much bigger swing in the dark.
But this time around, Feng thinks crypto is “super risk-free” from an adoption and capital perspective, but it’s still early enough for new projects or startups in the space to have a significant opportunity. to make a breach. “Even during this time, with so much uncertainty, it’s the clearest time to start creating exciting new apps.”
In the long term, the commerce-focused blockchain hopes to build better infrastructure for exchanges and, therefore, better infrastructure for DeFi over time, Feng said.
“At the end of the day, we want to build the right infrastructure that gives developers the edge.”
