Sei Labsa startup co-founded by a former Robinhood engineer and a former VC from Coatue, has launched a new open source project that offers a new and exciting approach to making Ethereum faster and less expensive for developers.
On Wednesday, Sei released The Parallel Stack, a public good project — meaning free for any crypto developer to use. It aims to improve the transactions-per-second (TPS) performance of layer-2 blockchains based on the Ethereum Virtual Machine (EVM) through the tried-and-true computer science concept of parallel processing, TechCrunch has learned exclusively.
Sei Labs is a company that the crypto community is already watching after it raised $30 million, at an $800 million valuation, about a year ago to build its own ultra-fast, open-source, layer-1 blockchain specifically focused on crypto transactions .
But now Sei has turned her attention to helping improve Ethereum, a much larger, more established blockchain, the largest in total value locked, according CoinMarketCap — aka the value of all digital assets on the network.
By default, EVMs process transactions sequentially, one after the other, a slow and inefficient method that does not scale well.
“The biggest limitation of EVM is the lack of performance,” Jay Jog, co-founder of Sei Labs, formerly Robinhood, told TechCrunch. Ethereum’s throughput cannot exceed 50 TPS, which limits the growth of its ecosystem and results in high so-called gas fees, the fees charged for transactions on Ethereum blockchains. These fees make Ethereum unaffordable for “99.9% of normal users,” Jog added.
In addition to The Parallel Stack, Sei Labs is also working on upgrading its blockchain to Sei V2a parallelized EVM, which processes multiple transactions simultaneously and would make it accessible to a “global base of EVM developers,” according to a November 2023 blog post. “We’ve been working on scaling EVM for a long time, and we’re doing it in parallel” , Jog said.
Obviously, the higher the transactions per second, the faster, more efficient and more scalable a network is. For reference, the Bitcoin blockchain, by default, averages 5 TPS, while Ethereum averages 20-30 TPS. Solana’s is about 2,500 TPS, and some of the newer, Ethereum-focused layer-2 blockchains like Polygon and Arbitrum can 65,000 and 40,000 TPS, respectively.
Parallel Stack can do about 5,000 TPS, but aims to reach 10,000 TPS by the end of the year, Jog said.
Sei, of course, isn’t the only one working to make Ethereum faster and cheaper. Optimism’s OP Stack, an “EVM-equivalent” layer 2 blockchain, averages 2,000 TPS. But they use different design philosophies, and Sei’s focus is on higher performance through parallel processing, said Jeff Feng, co-founder of Sei Labs, previously an investor in Coatue.
“It’s like a stove. you can cook two things at once, as opposed to one dish after another,” Feng said. “Historically, if you wanted this kind of TPS, you had to rely on Solana and learn a whole new development framework.”
But if Sei is building its own layer-1 blockchain, not derived from Ethereum, why should it work to solve Ethereum’s problem? Because Ethereum is where most developers are, and scaling is a problem they think they can tackle as well. And if Sei can offer them a way to adopt parallel processing to improve their Ethereum work, they could also learn the fundamentals of the Sei ecosystem along the way.
Furthermore, they do not see the two blockchains as competitors. “Our aim is to scale EVM. There has been significant interest in having parallel EVMs and this is a natural next step: democratizing access to make it as plug and play as possible,” said Jog.
So perhaps it makes sense that Sei is evolving into the EVM space, to reach the majority of blockchain developers.
“It was almost a no-brainer, but it clearly unlocks a level of performance and performance that allows much larger applications to successfully build and persist on Ethereum,” Feng said. “With parallelization, it will move the industry forward.”
But why should they freely share their work as open source projects? Sei’s framework isn’t the first to do so, but it’s true to the ethos many crypto projects have of providing open source for anyone to build.
“I was at Robinhood when the GameStop saga happened. a small number of people were making decisions and we didn’t know anything until the news broke,” Jog said. The lack of internal transparency made him want to create a decentralized chain that is open source so that anyone can access it and is not limited to a group of people.
Jog and Feng expect that the initial enthusiasm for The Parallel Stack will come from existing Ethereum-focused applications that are experiencing bandwidth issues and are looking for higher TPS options.
