Sei, the layer-1 blockchain that launched in August, announced a strategic investment from Circle, the issuer of the USD Coin, as well as a bridged integration of the popular stablecoin onto its blockchain.
Stablecoins remain an integral part of the plumbing for blockchains, allowing users to have a dollar-equivalent crypto token that operates across applications like exchanges and NFT marketplaces. USDC has been expanding its roster of blockchains, with a push to add new offerings including NEAR and Optimism in August. Sei represents the latest addition.
One of Sei’s founders is Jayendra Jog, a former engineering lead at Robinhood. He told Fortune in April that he got the idea for the blockchain after Robinhood’s infamous mismanagement of 2021’s “meme stock” craze, during which the platform was forced to suspend trading.
Jog set out to create a decentralized exchange that he hoped would solve the intermediary issues that plagued Robinhood. After realizing that none of the available blockchains on the market, such as Ethereum, could handle the trading speeds that he wanted, Jog began to develop Sei with Jeff Feng, a former venture investor at Coatue.
Sei raised $30 million in April at a valuation of $800 million, with investors including Jump Crypto and Multicoin Capital. It announced an additional $50 million raise later that month from Bitget, a Seychelles-based crypto exchange focused on derivatives, as well as the venture firm Foresight.
The layer-1 officially launched in August, although early users complained about delays in airdrop of the blockchain’s native token, where early adopters would receive a set amount of the cryptocurrency, also called Sei. The market cap for the token is currently around $310 million.
The investment from Circle's venture arm, Circle Ventures, will allow Sei to integrate USDC with its growing suite of applications, such as the popular decentralized exchange Sushiswap.
The Circle Ventures investment in SEI facilitates the use of bridged USDC on SEI through native issuance on Noble, a separate blockchain, said a Circle spokesperson.
"As crypto matures, stablecoins will become more and more relevant to the overall growth of the industry," Samy Karim, director of the Sei Foundation, a nonprofit that supports the blockchain ecosystem, said in a statement shared with Fortune.
The play represents an expansion push by both Sei and Circle. There's a growing list of layer-1 blockchains, many with similar value propositions, including Sui, which launched in May 2023 with a similar promise of speed. Circle's USDC, meanwhile, has been rapidly losing market share to its chief rival, Tether. By launching on new blockchains, Circle is aiming to increase the user base that will turn to its token.
“We look forward to working closely with the Sei team on integrating USDC for developers and users for high-speed and cost-efficient transactions on the network," Wyatt Lonergan, a principal at Circle Ventures, said in a statement shared with Fortune.
Update 11/16/2023: Clarifies how USDC on Sei will function.
