It can often take years for new blockchains to set up working relationships with large companies. But just two months after its mainnet launch, Sei Labs has tapped Plaid to provide identity verification and compliance screening services.
The linkup could be a significant boost for Sei, as Plaid could help bolster user onboarding and make the blockchain more competitive with with the likes of Aptos and Solana, which also aspire to be the fastest blockchain network.
Through the new agreement, Sei will leverage Plaid’s Know-Your-Customer (KYC) solutions. Plaid’s technologies will help Sei verify users’ identities and screen them against anti-money laundering watchlists.
Significantly, the collaboration could see Sei benefit from Plaid’s broad connectivity across the global landscape of financial services. A giant of open banking, the FinTech’s API infrastructure connects to over 12,000 banks around the world, and powers payments and account information services for major players across the financial sector and beyond.
By utilizing Plaid’s services, Sei could also gain an important edge over rival platfroms, including Aptos and Solana, with which it competes to be the fastest blockchain.
From its inception , Sei has made speed a top priority. The platform was designed specifically with trading and exchanges in mind.
According to the project’s White Paper , trading apps make up the majority of Web3 applications today. From crypto exchanges to NFT-based games, Sui’s developers have argued that the most widely adopted blockchain use cases entail some type of token trading.
However, they noted that “challenges such as reliability scalability and speed hinder trading applications from delivering the seamless user experience necessary for achieving mass adoption.”
Stepping up to meet the needs of trading apps, Sei’s developers believe they went about building the fastest Layer 1 blockchain on the market, making a direct challenge to the claims of established platforms such as Solana and Aptos.
Back when it launched in 2017, Solana also promised to deliver significantly higher speeds than existing blockchains. In the years since, the network has consistently been one of the fastest in the game, putting older rivals like Ethereum to shame, even if it has occasionally struggled with uptime.
Five years later, in October 2022, the Aptos Mainnet debuted with a theoretical maximum throughput of 120,000 transactions per second (TPS), once again boasting faster, more efficient transactions than alternatives.
Two metrics are typically used to measure the speed of different blockchains.
Transactions per second (TPS) measures how many transactions a chain can execute in a second and currently ranges from around 25 TPS for Ethereum to a few hundred for the fastest networks. For example, in a 2023 study by Dartmouth Blockchain, Skale recorded the highest TPS at 397.7. Coming in a close second place Solana was found to process transactions at a rate of 375.3 TPS.
However, TPS only tells half the story.
Because the time to register a transaction differs from the time it takes to finalize, another important metric is time to finality (TTF).
Especially for older blockchains, TTF can lag significantly behind TPS. For example, although Ethereum can register multiple transactions in a single second, it can often take 15 minutes or more for these transactions to finalize.
In trading environments where a fraction of a second can make or break a deal, and for users who need to move assets across multiple addresses in a short space of time, delayed finalization just isn’t good enough.
For Sei’s developers, focusing on TPS without paying attention to finality is pointless. For FinTechs like Plaid, building on blockchains is useless if they can’t keep up with the near-instantaneous transaction times of modern interbank payment rails.
Sei claims to fastest time to finality in the industry with a lower bound of 300ms. That means that someone can initiate a payment and expect funds to arrive at their destination ready to be spent less than a third of a second later.
In contrast, research by Messari found that Solana had a median TTF of 1–2 seconds, but at during periods of high congestion, this can surge to between 60 and 90 seconds. Meanwhile, Aptos’ average TTF was recorded at 900ms.
Having strategically teamed up with an important FinTech partner to help boost its mainstream adoption, the next step for Sei will be growing its ecosystem, encouraging more developers to build on the blockchain and attracting new users.
Although the new blockchain may already compete with the best in terms of transaction processing speeds, its small user base belies its young age.
The true test for the network will be whether it can maintain its high TTF rate once transaction volumes start to grow.