Sei Labs, a startup founded by a former engineer from Robinhood and a former VC from Coatue, has introduced a new open-source project that presents an innovative and thrilling method to enhance the speed and cost-effectiveness of Ethereum for developers.

The launch of The Parallel Stack by Sei on Wednesday marks a significant milestone. This public good project, available for free to all crypto developers, aims to enhance the transaction processing speed (TPS) of Ethereum Virtual Machine (EVM)-based layer-2 blockchains by leveraging the concept of parallel processing from computer science.

Sei Labs has garnered attention in the crypto community following its \(30 million funding round about a year ago, valuing the company at \)800 million. Initially focused on developing a high-speed, open-source layer-1 blockchain tailored for crypto trading, Sei has now shifted its focus towards enhancing Ethereum, the largest blockchain in terms of total value locked according to CoinMarketCap.

The EVM’s current method of processing transactions sequentially poses a significant bottleneck, limiting Ethereum’s throughput to 50 TPS. This limitation hinders the growth of the ecosystem and results in high gas fees, rendering Ethereum unaffordable for the majority of users. Jay Jog, Sei Labs’ co-founder and former Robinhood member, highlighted this issue, emphasizing the critical need for improved throughput.

In addition to The Parallel Stack, Sei Labs is also actively developing Sei V2, a parallelized EVM that can process multiple transactions simultaneously. This advancement aims to cater to a global community of EVM developers, as stated in a blog post from November 2023. By parallelizing the process, Sei aims to scale EVM effectively.

Enhancing the transactions per second not only improves speed and efficiency but also enhances scalability. While Bitcoin averages 5 TPS and Ethereum around 20-30 TPS, newer blockchains like Solana, Polygon, and Arbitrum boast significantly higher TPS figures. The Parallel Stack, currently capable of 5,000 TPS, is targeting 10,000 TPS by the year’s end.

Sei is not alone in its efforts to optimize Ethereum’s performance. Other projects like Optimism’s OP Stack are also working on improving TPS, albeit with different approaches. Sei’s focus on parallel processing sets it apart, aiming to boost throughput significantly.

Despite Sei developing its own blockchain, the decision to address Ethereum’s scalability issues stems from its widespread adoption among developers. By offering solutions to enhance Ethereum’s performance, Sei aims to empower developers and foster innovation within the ecosystem.

The decision to share their work as open-source projects aligns with Sei’s commitment to decentralization and transparency. By providing open access to their framework, Sei aims to democratize access and drive industry progress.

The introduction of The Parallel Stack is expected to generate interest among existing Ethereum-focused applications facing bandwidth constraints. These applications seeking higher TPS options could benefit significantly from Sei’s innovative approach.