Sei and Sector-Specific Chains

Key Insights

• Sei has built-in features such as parallel order execution, an on-chain order book, and a native order-matching engine that will enable a new suite of financial products.
• Sector-specific chains optimize their stack for a whole vertical, which is ideal for building a community and functioning as the liquidity hub.
• Web3 activity might be showing support for the “fat app theory” as apps on a protocol end up in competition with them.

Application-specific blockchains are optimized for a single application as opposed to general-purpose blockchains, which try to provide for multiple uses. Sei, a DeFi-focused Cosmos chain, calls itself a sector-specific chain and lies in the middle of this spectrum. These chains target a sector of apps, such as DeFi or gaming, combining specialized features with general-purpose functionality.

App Chains and Dedicated Blockspace

App chains might be positioned to have better economies than general-purpose chains. The "fat protocol thesis" posits that most value generated by application-level activity on a blockchain should flow to the underlying protocol. This thesis emerged from observations of infrastructure and application cycles in the Web2 era.