I'm not sure if I understand what you mean when you first mention "water seal".

If you mean a water based product I don't know if any of those will be suitable for a Tegu. From my experience with Tegus (granted, many years ago) they do well in cages with a lot of substrate and with slight humidities.

Polycrylic as mentioned earlier is an excellent product but it does not do well in the presence of moderate humidities nor does it withstand scratching well.

I finished a plywood Bearded Dragon cage with 4 coats of polycrlic and it has held up well. However, the bottom has taken a beating from the sand substrate.

If this is going to be the final cage for the Tegu I'd use something more durable like an epoxy or polyester fiberglass resin.

On the expensive end there is Envirotex and the various other names it's packaged under. Super easy to use and no toxic fumes that will leave you with a three day hangover. It's a great finish but expensive.

Polyester Fiberglass resin is a very durable finish and is super cheap. However, it is hard to paint onto plywood and get a smooth finish and it has a yellowish/gray hue to it. Also, the fumes are very nasty.

Lastly, there are numerous other choices in epoxies and they all vary greatly. It really depends on whether you want a clear coat or not. I know TK2 has used a Bondo epoxy he is very happy with. He's been helpful in discussing this product but I've never found it locally.

I'm by no means a Tegu expert but I think with any other finish you'll be breaking the cage down every year and re-finishing it.

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