SEI plunges from ATH as network puts Ethereum first in new upgrade
- SEI’s price dropped from $0.29 to $0.23 within 24 hours.
- The EVM integration would increase throughput and reduce transaction costs.
Unfortunately for the Sei [SEI] token, the project’s decision to disclose its v2 plans caused havoc for the price action.
Prior to Sei Network’s announcement, the value of SEI surged by double-digits and tapped a new All-Time High (ATH) of $0.29.
But moments after the revelation, the price fell by 16.86% while trading at $0.23 at press time. This move looked like a typical “buy the rumor, sell the news event.”
This strategy happens when traders accumulate a token in anticipation of a major development, pushing the price up in return.
However, when the development gets to the public domain, the participants involved sell the token for profits.
The EVM is the “SenSEI”
On the 29th of November, Sei Network announced via its blog that it would soon become the first parallelized Ethereum Virtual Machine (EVM) blockchain.
The EVM is the computational engine for Ethereum [ETH] that enables smart contract functionality.
Sei works using the Cosmos Software Development Kit (SDK) as an open-source framework to construct new blockchains within the Cosmos ecosystem. So, the EVM development does not mean that Sie is migrating.
Rather, it would be an additional function for the project when it is implemented.
According to Sei, the EVM compatibility would enable users to interact with Solana [SOL] and the Ethereum network seamlessly.
The statement also mentioned that the Sei v2 might lead to an increase in the number of transactions per second. Regarding this, Sei noted that:
“From a performance perspective, Sei V2 will offer 28,300 batched transactions per second of throughput, while offering 390 ms block times and 390 ms finality. This allows Sei to support many more users and far more interactive experiences than existing blockchains.”
TVL drops after the disclosure
Should the proposal go live, it could bring about an influx of users on the Sei blockchain. Also, the potential increase in network growth could positively affect the SEI price.
However, SEI’s price was not the only figure affected by the recent declaration.
The Total Value Locked (TVL) also took a hit. At press time, TVL was down to $3.26 million.
This drawdown was because protocols like SeaSwap and Fuzio experienced a decrease in the liquidity locked in them.
The decrease in the TVL suggests that market participants doubt that Sie would provide the yield desired if assets are locked in the protocol. But 30 days back, that was not the case.
How much are 1,10,100 SEIs worth today?
However, there is a chance that the mood sentiment toward the project may change.
One reason for this assumption is the higher throughput and cheaper transaction costs the network may soon start to offer.