$SEI Gains 14% as Sei Network Proposes SIP-3 to Become Fully EVM-Compatible

Sei Labs has put forth a major proposal, SIP-3, to turn the Sei network into an EVM (Ethereum Virtual Machine) only chain. The Sei Network team, via a post on X, stated this move intensifies its focus on performance, simplicity, and developer usability, which involves deprecating its legacy Cosmos architecture.

SIP-3: A proposal from @Sei_Labs to streamline Sei’s architecture to an EVM-only model has been submitted through the Sei Improvement Proposal process.

This proposal aims to enhance developer experience, simplify infrastructure, and fully leverage Sei’s parallelized EVM… pic.twitter.com/nxQ9cGYXj2

— Sei 🔴 (@SeiNetwork) May 7, 2025

Sei’s Proposed EVM-Only Bet: Rationale and Impact

Jayendra Jog, co-founder of Sei Labs, detailed the strategy behind SIP-3 in a separate X post. He emphasized that dominant EVM activity already drives nearly all current usage on Sei, prompting the proposal for a full transition to an EVM-centric framework.

The proposed changes under SIP-3 would deprecate CosmWasm and native Cosmos transactions, streamlining Sei to operate solely using EVM-based infrastructure.

While core functions like staking, governance, and validator operations would still use internal Sei addresses, all public-facing infrastructure, including wallets, dApps, and user transactions, would become purely EVM-native. Sei Labs believes this shift drastically reduces the load on developers and infrastructure providers. It simplifies wallet management for users and removes the need for dual address handling, thus reducing friction.

This simplification, however, also brings disruption, requiring developers to port existing CosmWasm applications to EVM and users to migrate assets to EVM-compatible platforms.

SEI Token Technical Analysis: Bullish Signs Emerge?

SEI is currently trading at $0.2315, with a daily gain of +14%. Previously, the RSI (Relative Strength Index) was hovering around 58.60, nearing the overbought threshold but still indicating room for upward movement before hitting exhaustion. A break above 60 could suggest the continuation of bullish momentum.

Based on recent price action and Fibonacci retracement levels from TradingView, immediate resistance for SEI appears at the 0.236 Fib level ($0.2206) and 0.382 ($0.2286). A clean break above these zones would signal further upside.

Source: TradingView

Mid-term bullish targets include the 0.618 extension at $0.2440, which aligns with both historical supply zones and technical confluence. Further targets lie at 2.618 ($0.2791), 3.618 ($0.3142), and 4.236 ($0.3359).

On the other hand, downside support is found at $0.1891, the recent local low and also the origin of the Fibonacci retracement.

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