Sei Network Code Review

Review Date: 24/01/2023

Sei Network is a sector-specific Layer 1 blockchain designed for trading and DeFi. It is built using the Cosmos SDK and Tendermint Core, with added Twin-Turbo consensus and multiple levels of parallelization to reduce latency and improve throughput.

Sei Network has a native price oracle run by validators, to support asset exchange rate pricing. The Sei network also features a highly optimized order placement and matching engine, called the “matching engine”, allowing decentralized exchanges to deploy their own Central Limit Order Books (CLOBs). Sei Network uses Frequent Batch Auctioning to aggregate all market orders and execute them at the same uniform clearing price

The matching engine is asset agnostic and does not require tokens to be traded, allowing decentralized exchanges to decide how to represent assets. The network also supports hooks, allowing contracts to register hooks that are invoked every block for operations like flashloan payback and trade settlements.

Sei Network is a highly optimized and secure network with a talented development team. Its project score is expected to increase to 87% after its mainnet launch.

Notes to Take:

  • Sei Network is a Layer 1 blockchain specialized for trading, aimed to give exchanges an advantage

  • Sei Network built using Cosmos SDK and Tendermint Core, with optimizations for exchanges

  • Makes use of Twin-Turbo consensus and parallelization to reduce latency and improve throughput

  • Has a native price oracle, with penalties for non-participation and bad data

  • Has a native order matching engine for decentralized exchanges to deploy their own CLOBs

  • Supports various order types (Limit, Market, Fill-or-kill, Stop-loss, Cancel)

  • Lifecycle of an order: transactions are sent to the dex module and aggregated, then processed by the market smart contract and matching engine

  • Allows contracts to register hooks and supports frequent batch auctioning and transaction order bundling

  • Asset agnostic order book, with trading fees to be determined by governance in the future

  • Anticipates projects will build decentralized exchange middleware on top of the matching engine.

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