Crypto trading-focused blockchain Sei launches $50M ecosystem fund • TechCrunch

While many layer-1 blockchains out there were built for a fairly general purpose, other networks were designed around very specific use cases.

Sei, a layer-1 blockchain designed for commerce, has launched a $50 million ecosystem and liquidity fund to support new decentralized finance (DeFi) applications on its platform, co-founders Jeff Feng and Jay Jog told TechCrunch exclusively.

“Ecosystem-wise, if you think about all of crypto, especially on-chain applications, there are only a few apps that have had actual product market adaptation,” Feng said. “Everything else is super, super early despite what valuations they have. Solana is effectively a Series C startup with tremendous value.”

With a lot of layer-1 blockchains, a lot of things each does is “startup, it’s a hacker house — things that don’t scale, but are huge for their ecosystem,” Feng said. “The few apps that have gotten product market adaptation are like DeFi and stablecoins. We know for sure that exchanges are here to stay.”

The core value proposition for Sei is focused on specializing a layer-1 blockchain, Feng said. “You can now do things you couldn’t do in any other ecosystem because we’ve made tradeoffs that no other L1s have.”

All the layer-1 blockchains – with the exception of Ethereum – act as early-stage startups, Feng believes. “For them it’s focusing on the end user, but for us it’s focusing on the developer.”

Crypto exchanges bring in some of the most — if not the most — money for the space, but the current tier-1 infrastructure is holding many exchanges back, Jog said.

“Most exchanges have smart contracts on top of layer-1 [blockchains], so if you’re trying to improve the performance of the exchange, you can’t really do anything with layer-1,” Jog said. “In our case, we added an order-matching engine in the layer-1 itself which significantly improves the performance and experience of exchanges.”

So far, Sei’s ecosystem has over 50 layers, mainly from blockchains like Solana, NEAR, Polkadot and the defunct Terra, Feng shared.

“They are teams that have already raised venture funding and launched their applications, but felt that their current tier-1 ecosystems lacked what allowed them to truly scale and provide the best user experience, which is why they came to us,” said Got it. “All these teams came over without any incentives.”

So far, Sei has not spent money on ecosystem grants, Feng noted. But the new fund will go towards expanding its ecosystem and incentivizing “good founders” to come in and build applications on the blockchain.

“It’s a generational time to build,” Feng said. “When you think about crypto from a risk-reward perspective. If you look back to 2017 or 2018, it was really risky. There wasn’t real applications or a lot of capital, it was a much bigger swing in the dark.”

But this time, Feng believes that crypto is “super risk-free” from an adoption and capital perspective, but it’s still early enough for new projects or startups in the space to have a meaningful opportunity to make an inroad. “Even during this time, with so much uncertainty – this is the clearest time to start building interesting new applications.”

In the long term, the commerce-focused blockchain hopes to build better infrastructure for exchanges and, as a result, better infrastructure for DeFi over time, Feng said.

“At the end of the day, we want to build the right infrastructure that gives developers the advantage.”