Layer-1 blockchain Sei Labs announces $50 million investment from Bitget and Foresight Ventures
Sei is building a layer-1 blockchain with a focus on trading infrastructure. Getty Images
While crypto trumpets the promise of layer-2 scaling solutions like Arbitrum and Polygon, Sei Labs is bucking the trend by building a new layer-1 blockchain slated to launch later this year.
After a funding round that valued the company at $800 million, Sei has raised an additional $50 million for its ecosystem fund, co-founder Jayendra Jog told us exclusively. Fortune. The investment comes from Bitget, a Seychelles-based crypto exchange with a focus on derivatives, and venture firm Foresight.
Jog previously worked as head of engineering at Robinhood during the Gamestop saga, where the brokerage suspended trading due to a rush of demand for the so-called “meme stock”. As a result of the company’s mismanagement, Jog decided that centralization was to blame. When he set out to build a decentralized exchange, he realized that no blockchain solution had sufficient infrastructure to support his vision, leading to the genesis of Sei – a layer-1 focused on trading.
“Internally, we only have one core mission, which is that exchanges are the most important application in crypto,” Jog said Fortuneand points to platforms from Binance to OpenSea and Uniswap.
Courtesy of Sei Labs
According to Jog, Sei’s value proposition compared to other blockchains is exchange infrastructure, with a focus on performance, which it measures in “time to finality,” or a metric to measure transaction speed, as well as the number of orders that can be processed per second. Jog said that Sei aims to have a mainnet launch around the end of June and that it currently has over 120 projects building on Sei ahead of launch, ranging from marketplaces to games to wallets.
Despite the recent popularity of layer-2 solutions built on top of existing blockchains such as Ethereum, Jog said his team decided to build a new blockchain because they believe layer-2 will not evolve quickly enough to support sufficient transaction speed.
“The fundamental problem with layer-2s is that you have some kind of computation that happens off-chain, and then you’re trying to compress data on-chain,” he said Fortune. “It’s just not scalable right now, which is why a layer-1 approach is much, much better.”
The challenge will be attracting projects to build on Sei as opposed to popular current alternatives, from Bitcoin to Ethereum to Solana. After all, the crypto industry is littered with the skeletons of failed blockchain projects.
Jog said Sei’s scaling capabilities will attract projects, pointing to the popular Ethereum-based decentralized exchange SushiSwap, which is building a perpetual exchange on Sei.
The recently announced $50 million commitment to the ecosystem fund will further attract projects to Sei, bringing the total size of the fund to $120 million, with previous contributions from Multicoin, Hudson River Trading and GSR. The fund will be used to invest in projects based on Sei, as well as to provide liquidity for trading – GSR and Hudson River Trading are both focused on market making.
Other investors in Sei include Multicoin Capital as well as two other firms focused on market making, Jump Crypto and Flow Traders.
While Sei’s focus is decentralized exchanges, one of the new financiers, Bitget, is one of the best centralized crypto exchanges. Fortune reported last week that Bitget raised $10 million from cryptocurrency VC Dragonfly, with the goal of partnering more with the firm’s broad portfolio of companies.
“I think that centralized exchanges understand that there are many opportunities to support decentralized exchanges,” Jog said, either by directly investing in projects or providing liquidity to projects through market making.
In its latest public testnet, launched less than a month ago, Sei has processed over 40 million transactions and had over 3.6 million users create wallets.
