Everything you ever wanted to know about $SEI

TLDR;

- Token utility & value accrual mechanism
- SEI distribution, unlocks & supply schedule
- Investors and funding
- Best ecosystem projects
- The fastest L1 chain & first parallelized EVM
- Lots of bullish graphics and charts

What is Sei Network?

Sei is a hyper-fast L1 chain designed for DeFi trading.

It is also the first parallelized EVM chain.

This allows Sei Network to get the best of Solana and Ethereum - a hyper optimized execution layer that benefits from the tooling and mindshare around the EVM.

What makes Sei so special?

- Lightning fast block times; 380ms.
- Instant block finality.
- 12.500 transactions per second.
- Parallelized EVM.
- Smart contract capability via CosmWasm.

Sei Network History

- May 2022: Ideation & Project Formation
- Aug. 2022: Seed Investment
- Aug. 2022 - July 2023: Atlantic Testnet (1-4)
- Aug. 16, 2023: Launch of Sei Mainnet
- Nov. 2023: Strategic funding round
- May 2024: Launch of Sei V2 (parallelized EVM)

Token Overview

- Max supply: 10B
- Circulating supply: 3.5B
- Market Cap: $4.8B
- FDV: $4.6BM
- Token Price: $0.48 / ATH $1.14
- Rank: #58

$SEI Token Utility

1) Security: SEI can be staked to secure the network & earn rewards.

2) Governance: Partizipation in on-chain governance.

3) Fees: SEI is used to pay for tx fees on the Sei blockchain.

4) Collateral: SEI can be used as native asset liquidity or collateral.

Staking & Inflation

Token holders can stake their SEI to secure the network and earn staking rewards in return.

- The network has an inflation rate of 2.55%.
- A total of 5.41B SEI are staked which results in a staking APR of 4.07%.
- Sei has an active set of 39 validators.

SEI Token Distribution

- Staking Rewards & Ecosystem Reserve: 48% (grants, incentives & airdrop)
- Investors: 20%
- Team: 20%
- Foundation Treasury: 9%
- Binance Launchpool: 3%

Investors and Funding

Seed Round: Lead by Multicoin Capital
- Money Raised: $5M
- Price per token: 0.005 (ROI: 96x)
- Tokens sold: 1B
- Date: Aug. 2022

Strategic Round:
- Money Raised: $30M
- Price per token: 0.08 (ROI: 6x)
- Tokens sold: 375M
- Date: April 2023

Strategic Investment by Circle Ventures

- Money Raised: unknown
- Price per token: unknown
- Tokens sold: unknown
- Date: November 2023
- Purpose: unlocking novel use cases for Circle's USDC in the Sei ecosystem.

Total Funds Raised: $35M + Circle Investment

Sei Ecosystem Fund

- Money raised: $50M
- Date: April 12, 2023
- Investors: Bitget & Foresight Ventures

Total Ecosystem funds raised: $120M

The goal of this fund is to provide financial support, resources, and guidance to projects building on the Sei. An emphasis was placed on DeFi, gaming, and NFT projects.

Token Unlocks

35.2% of the total supply is unlocked as of September, 2024.

Like most other token vesting schedules, there is a 1 year lockup period for VCs and team members.

The good thing though about SEI token unlocks is that there is no big cliff unlock after year 1.

Instead of unlocking a big chunk of the supply after one year, like it is the case for Celestia, SEI tokens going to investors and team members will unlock linearly over the next three years, until Aug. 2027.

Right now:

- 0.07% of the total $SEI supply is released daily.
- which equals 7.19M $SEI per day.
-or a potential daily sell pressure of 3.32M at current price levels.

Vesting Schedule - Timeline

a) Unlocks for the Ecosystem Reserve and Foundation funds will end on Aug. 2025.

b) VC and team tokens will continue to unlock linearly until Aug. 2027. (1.82M vs. 1.38M per day)

c) A second team reserve (5-6 years) will unlock from Aug. 2027 - Aug. 2029.

On August 15th, daily-linear unlocks to VCs and team members have begun.

- There is no evidence in the chart that daily-linear unlocks are bearish.
- Quite the opposite, $SEI is up ~70% since then.

* $3.32M daily sell pressure vs. $500M 24h trading volume.

SEI Value Accrual

It is similar to other high-throughput L1s like Solana:

a) Fees: The more network activity & txs that occur, the higher the rewards for stakers.

b) Monetary Premium (MP): As the network grows, the underlying token $SEI will attain MP similar to $ETH and $SOL.

Protocol Revenue

In the month of September, on average *2000 $SEI per day have been accrued as protocol revenue.

The chart below is solely based on transaction fees paid in $SEI.

Developer Activity

Active contracts deployed on a chain are a good indicator of an active network of dedicated developers.

On Sei, deployed contracts are increasing day by day, indicating a very active and thriving developer community.

Daily Active Users

Daily active users showcase a very similar pattern as active contracts on Sei; they almost go hand in hand - up to the right.

It's like a virtuous cycle: more users attract new developers, developers build better products which attract new users.

Total Value Locked (TVL)

TVL on Sei: >$200

The story remains the same: TVL has been growing steadily since June 2024.

While most other DeFi projects are losing TVL, the TVL chart for Sei tells a totally different story; it's trending upwards.

Sei is the new IBC King

Over the past 7 days, Sei had the most accumulative IBC volume of all AppChains connected via IBC, dethroning Osmosis the "unrivaled" IBC Champion.

IBC volume (7d) = $92M

These $92M in IBC volume can be broken down into two parts:

1) Kava Chain: $60 IBC volume flowed between KAVA & SEI in the form $USDT.

2) Noble: $32 of IBC volume flowed between Noble and SEI in form of $USDC.

Indicating that there's a massive influx of stable coins occurring on Sei Network right now.

Sei Ecosystem

A vibrant ecosystem of super-fast and performant applications focusing on sectors like DeFi, NFTs, and gaming has formed around the Sei network.

Especially DeFi projects like to build on Sei, due to it's speed and fast finality.

For a more in depth analysis of the Sei ecosystem we recommend checking out this post.

Most used DeFi Applications on Sei

1) Yei Finance - Money Market
2) Silo Stake - Liquid staking & MEV
3) Dragon Swap - DEX
4) Jellyverse - DEX
5) Filament Finance - Perps

The following table displays the top DeFi applications on Sei according to their TVL.

Seiyans; #1 NFT collection on Sei

Seiyans NFTs is the premier and "in-official" NFT collection of Sei Nework.

- Collection size: 9000 NFTs
- Floor price: 220 $SEI
- Total volume: 6.3M $SEI
- NFTs Listed: 170
- Unique owners: 4359
- Listed on Pallet Exchange & MRKT

CEX and DEX listings

- $SEI is listed and can be traded on most major CEXs like Binance, Coinbase, Bybit, Kraken, Gate-io, MEXC Global, or

- Natively on various DEXs on Sei like Dragonswap, Jellyverse, Astroport or via IBC on Osmosis.

To sum it up: The Good

a) Hyper-fast Layer 1 chain (0.38ms blocks).
b) First parallelized EVM.
c) Instant block finality.
d) Developer and user activity are reaching new ATHs.
e) TVL is picking up, surpassing $200M.
f) Good team funding and strong ecosystem fund.

The Bad

g) There's a lot of competition in the high-throughput L1 landscape with folks like Aptos or Sui, Solana, or upcoming chains like Monad, another contender working on a parallelized EVM.
h) VC and team tokens have just begun to unlock.

Conclusion

After a challenging start, the Sei v2 chain upgrade (parallelized EVM) marked a turning point for Sei. The network is now buzzing with activity and gaining momentum. Developer activity, active users, and TVL growth are off the charts.

If Sei can maintain this momentum, it stands a strong chance of emerging as a top alternative L1 this cycle, competing for market share with the big guys like Ethereum and Solana.

Thanks for reading folks, we hope you've found this tokenomics guide helpful and could learn something new.

Disclaimer

This article is intended to educate readers about certain topics and should not be considered financial advice in any way.