SEI Is Up Over 1,500% – Why is the ‘World’s Fastest Blockchain’ Surging?

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Sei is a sector-specific L1 blockchain that is specialized for cryptocurrency trading. It claims to be the “fastest blockchain in the industry.” Since its debut in August 2023, the SEI token has gained as much as 1,500% to hit an all-time high of over $1 in January 2024.

The SEI token is on a tear, having surged as much as over 1,500% since its August 2023 debut.

The native cryptocurrency of a Layer One (L1) blockchain called Sei has already made it to the top 50 largest cryptocurrencies by market cap within six months of its mainnet launch.

Sei is a proof-of-stake (PoS) blockchain that launched its mainnet in August 2023. Its native token, SEI, was airdropped to active users across Ethereum, Solana, Arbitrum (ARB), Polygon (MATIC), Binance Chain (BNB), and Osmosis (OSMO) in the same month.

According to Sei’s website, the blockchain boasts transactional finality of 380 milliseconds compared to L1 rivals Ethereum’s (ETH) 6 minutes and Solana’s (SOL) 2.5 seconds — hence, it claims to be “the world’s fastest blockchain”.

READ MORE: What is SEI?

Why is the SEI Token Surging?

Since debuting in August 2023, the SEI token has surged by more than 1,550%, Binance data showed on 10 January 2024. The token opened at $0.0645 on 15 August 2023 and hit an all-time high of $1.06 by 3 January 2024.

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The main reasons for SEI price appreciation are as follows:

1. SEI announces EVM-compatibility upgrade

On 29 November 2023, Sei announced that its v2 upgrade would introduce Ethereum virtual machine (EVM) smart contract support on the nascent blockchain network. At the time of writing, Sei only supports Cosmos-native Cosmwasm smart contracts that are written in the Rust programming language.

The introduction of EVM smart contracts – which are written in the Solidity programming language – will not only attract developers from the world’s biggest smart contract platform, Ethereum. Still, it will also bring in end-users that use popular EVM-compatible wallets such as MetaMask.

According to Sei, its v2 upgrade will allow backwards compatibility of EVM smart contracts, enabling developers to easily deploy their smart contracts from Ethereum and other compatible blockchains without making any changes.

The announcement helped SEI surge over 22% to a then all-time high of $0.34 in late November 2023. Sei’s v2 upgrade is set to be deployed in the first half of 2024.

2. Memecoin frenzy

Most of 2023’s crypto market gains were driven mainly by memecoin rallies. Memecoin trading activity spiked across several blockchains, including Bitcoin, Ethereum, and Solana. Even a newcomer like Sei saw its share of memecoin trading in December 2023, which resulted in increased demand for its native token SEI during the period.

Investor interest in a Sei-based memecoin named SEIYAN was a major catalyst in SEI’s token price surge. SEIYAN, which calls itself the “brand coin” of the Sei blockchain, surged by over 127,000% in the last 11 days of December 2023. Speculative investors rushed to buy SEI tokens, used to pay for gas fees to obtain SEIYAN tokens on decentralized exchanges, causing the price of the native token to rise parallelly.

3. Speculative investors

The Sei blockchain is a popular crypto project that aims to champion DEX trading, which has enormous potential to eat away the market share of centralized exchanges (CEX). Naturally, any promising crypto project sees its fair share of market speculation, and the Sei blockchain is no different. 

We have seen similar investor speculation occurring without any ground-breaking technology breakthrough or increased mass adoption in other promising crypto projects like artificial intelligence-focused Bittensor (TAO) and real-world asset tokenization-focused Stobox (STBU) as well. Forward-looking crypto investors love to make any early bet, which looks to be the case for Sei, Bittensor, and Stobox.

SEI Tokenomics:

  • The total supply of SEI is capped at 10 billion tokens.
  • The current circulating supply of SEI stood at 2.3 billion tokens as of 10 January 2024.
  • 51% of SEI’s total supply is allocated as “Ecosystem reserve,” which will be used for staking rewards, grants, incentives, community programs and airdrops.
  • 9% of the total supply is allocated to the Sei Foundation treasury.
  • 20% of the total supply is reserved for the development team.
  • 3% of the total supply was allocated for launchpool.
  • 20% of the total supply was distributed to private sale investors.
  • SEI was the 49th largest crypto by market cap at $1.55 billion as of 10 January 2024.
  • The estimated SEI staking yield stood at 4.6% APR as of 10 January 2024.

SEI utility:

  • SEI tokens are used to pay for gas fees on the Sei blockchain.
  • SEI holders can stake their tokens to become network validators.
  • SEI holders can delegate their tokens with validators for staking and earn a yield on their staking deposits.
  • SEI tokens are used as collateral on various decentralized applications (DApps) built on the Sei blockchain.
  • SEI tokens can be used to tip validators to get transaction priority.

The Bottom Line

The Sei blockchain is an interesting project to keep an eye on. Sei’s laser focus on becoming an L1 for crypto trading applications will undoubtedly help it distinguish itself from rival blockchains.

Sei has proclaimed to be faster than established rivals such as Ethereum and Solana. However, only time will tell whether the Sei blockchain can take the load of thousands of DApps and millions of users.

This article should not be considered investment advice and is for information purposes only.

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Mensholong Lepcha
Crypto & Blockchain Writer
Mensholong Lepcha
Crypto & Blockchain Writer

Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to Capital.com, StockTwits, XBO, and other publications. He started his writing career at Reuters in 2017, covering global equity markets. In his free time, Mensholong loves watching football, finding new music, and buying BTC and ETH for his crypto portfolio.