Over the last week, my Twitter feed has been overwhelmed by informative threads about Aptos. Out of nowhere, this new Layer 1 blockchain has raised $350 million USD without even releasing a Whitepaper.
Aptos is the hottest new topic in the Layer 1 blockchain race. Like every other Layer 1 we’ve ever seen, Aptos promises to be faster, safer and easier than any chain who came before it. According to Anatoly Yakovenko, Aptos is more of a competitive threat to Solana than any EVM chain like BSC or Avax.
I have some burning questions. Until a few weeks ago, no one had ever heard of it. Why is everyone talking about Aptos? Why are VC’s reaching out with an open cheque book to a project that doesn’t even have a whitepaper? Why is Aptos so special?
Fortunately for you, dear reader, I’ve pulled out my research shovel and gone on a deep dive down the Aptos rabbit hole so that you don’t have to. I’ve unearthed the good, the bad and ugly. So what is Aptos? Does it deserve the name ‘Solana Killer’? Is Aptos the real deal, or are we going to be VC exit liquidity?
What is Aptos?
Aptos is a layer 1 blockchain capable of executing smart contracts. With Aptos, users can trade tokens on-chain through a DEX. You can provide collateral and borrow against your crypto on a lending market. Collectors can mint and trade NFTs. It’s highly scalable, secure and decentralized. Sounds familiar, right?
In some ways, that’s correct. Aptos is another blockchain like Ethereum, Solana or Cardano. It’s aiming to solve the blockchain trilemma and bring Web3 to millions of users. The Aptos network is intuitive and beginner-friendly. It’s designed for public mass adoption. It’s even in the name, ‘Aptos’ is the Ohlone word for ‘People’.
Where things get fascinating is when we start looking deeper. If Aptos can deliver on its promises, it might just be the fastest blockchain we’ve ever seen. According to the team, the Aptos blockchain can process over 160,000 transactions per second. Solana blew us away with 65,000 tps. Aptos can do more than double that.
Thanks to its sustainable proof-of-stake mechanism, Aptos is energy-efficient. It will theoretically have low gas fees. Decentralization is taking shape as well. The Aptos Testnet already has over 4000 node operators across 40 countries.
Like a treasure trove, the more I learnt about Aptos, the more I had to discover. At face value, these metrics are incredible. But how is this all possible? What’s powering this unmatched efficiency? How does Aptos work?
How does Aptos work?
Let’s start with the basics. Aptos is powered by a proof-of-stake consensus mechanism. This model is sustainable, energy efficient and affordable. PoS has been made popular by other leading chains like Cardano, Solana and ETH 2.0. If you’re not sure what PoS means exactly, you can refresh your memory with our ETH 2.0 article.
Aptos is unique because it’s completely written in Move, its own dedicated coding language. Move was originally invented to be the programming language used for Meta’s Blockchain, Diem (more on this later). Solidity, the language of Ethereum and EVM chains, suffers from security and verification issues. Move solves these problems. The language is written specifically for executing safe operations using digital assets.
That all sounds great. So Aptos is sustainable because of its consensus model. It’s secure because it has its own Web3-native coding language. That doesn’t explain its blistering speed and unprecedented transaction throughput.
Here’s the simplified version: Aptos achieves 160,000 transactions per second by running a parallel execution engine alongside STM techniques. STM (Software Transactional Memory) techniques manage preset transaction orders. This combo negates network bottleneck effects and eases congestion. If you want to dive into the technicalities, check out the Aptos blog post on the subject. Even the founder of Solana is bullish on the idea.
The Aptos Story
Where did all this innovation come from? How does a mysterious project step out of the shadows and bring us the fastest blockchain ever? The truth is, the technology behind the Aptos blockchain was originally designed for a different project called Diem. Diem was intended to be the blockchain payment network for Meta.
After 3 years of development, countless name changes and difficulty with regulations, Meta finally pulled the plug on their blockchain. As you can probably imagine, this left Diem project executives devastated. The abandonment of Diem meant years of work laid to waste. For Mo Shaikh and Avery Ching, the Aptos co-founders, this was unacceptable.
Shaikh and Ching had dedicated years to the development of Meta’s platform. They believed the tech was too powerful to be neglected and set out to release the network to the masses anyway. The managing partner of Multicoin Capital, one of the largest funds in the crypto industry, told Fortune:
“I love the fact that they said, ‘F*ck this,’ like, ‘I don’t care what Facebook and the government says, we’re gonna go make it happen,’”
Here’s what makes me so fascinated by Aptos. Meta is one of the largest enterprises on the planet. They have experience building and running platforms for billions of people. Meta has the resources to bring the smartest people in the industry together. If anyone can build a blockchain fit for mass adoption, this is the team for the job.
It’s evident that I’m not the only person who believes this. Institutional investors have been falling over each other to get a piece of the pie.
Aptos Funding
Aptos’ early funding rounds are some of the largest we’ve ever seen in this industry. Investment firms have been swarming like piranhas to get involved. Some of the biggest names in Web3 are jumping in, including:
- Andreessen Horowitz (a16z crypto)
- Multicoin Capital
- FTX Ventures
- Jump Crypto
- Parafi Capital
- Circle Ventures
The first round was conducted back in March 2022 and raised $200 million USD. This is a massive seed round by crypto standards. Even Web2 investment arms like PayPal Ventures have skin in the game for the first time.
This initial seed round was followed by another funding round in July 2022. This round added an additional $150 million USD to the Aptos warchest. Aptos Labs now has institutional support from the highest level. The project has staggering resources and is well-placed to continue building through the bear market. According to Dealroom, Aptos Labs has a valuation of $2 billion USD.
Much of this funding has already been put towards incentivised development grants. The Aptos Grants Program is attracting thousands of developers to build on the Aptos Network. Developer activity is one of my favourite metrics when analysing blockchain potential. I’m excited to see the stats when the Aptos Mainnet goes live.
Who is Aptos competing against?
It’s no secret that the Layer 1 blockchain race is competitive. During a bull market, it can feel like a new Layer 1 is released every week. It’s hyped, everyone’s excited about it for a few weeks and then it’s replaced with a shiny new chain. It can be cyclical, and frankly a bit tiring.
L1s are race horses for incumbent, overfunded, bourgeois VCs
— Cred (@CryptoCred) July 26, 2022
Run them, milk them, find a new one once the old one has run its course
Repeat ad infinitum
That being said, diamonds are constantly emerging from among the rocks. The last bull cycle unearthed Layer 1 gems like Solana, Avalanche and NEAR. For a moment there, even Terra Luna looked like it might challenge Ethereum. So what’s so special about Aptos, and why is it such a serious competitor?
For one thing, Aptos is super scalable. Binance Smart Chain is the second largest smart contract platform after Ethereum. Aptos can literally process 1000x more transactions than BSC. According to Vitalik Buterin, ETH 2.0 in its final form will clock 100,000 TPS. Aptos is still faster and the Move code increases network security. It’s a win-win.
Aptos is also building an environment where decentralization is more accessible. Let’s take a quick look at the requirements to operate a validator node and compare that against other L1s.
According to Aptos, you only need the following hardware to run a validator:
CPU: 4 cores (Intel Xeon Skylake or newer).
Memory: 8GiB RAM.
Storage: 300Gb Storage.
For such a powerful and efficient blockchain, these requirements are rather accessible. This has been made even easier through strategic partnerships. Aptos Labs announced a partnership with Google Cloud Services to make it easier than ever to run a node. The announcement claims that anyone can start operating an Aptos node in 15 minutes.
The Aptos Ecosystem / What Projects are building on Aptos
Now we start getting to the fun stuff. A blockchain is nothing without its dApps and protocols. Imagine Ethereum without Uniswap or AAVE? How about Solana without Magic Eden? I’ve been snooping around on the Aptos testnet to bring you some of the most exciting projects launching on Aptos:
Pontem Network
Pontem Network is on track to be the leading decentralized exchange on Aptos. Pontem will be the first port of call for trading tokens on the Aptos blockchain. It’s already got funding from some prominent Defi backers like Alameda Research and Delphi Digital. From what we can see, the branding and UX is sleek. Defi users will be comfortable and familiar with the interface and tools.
Vial Finance
Vial Finance is the decentralized money market of the Aptos ecosystem. If you’re familiar with AAVE, Vial achieves a lot of the same goals. You can provide your tokens in the lending market to earn interest. You can also borrow against your collateral if you need instant liquidity.
Topaz NFT Marketplace
Every layer 1 blockchain needs a leading NFT Marketplace. At first appearance, Topaz fits the bill. It’s fast, intuitive and has all the features we love in an NFT Marketplace. With rarity tools, attribute filters and a launchpad. Topaz is primed to dominate the Aptos NFT scene.
I’m personally really excited about the NFT scene on Aptos. Back in June, the Aptos Labs team was exploring the NFT potential of the network on the Aptos Devnet. They minted over a million unique NFTs in under an hour.
Martian Wallet
The Martian Wallet is the mostly widely used Aptos Wallet so far on the testnet. It’s simple, straight-forward and has a clean interface. It’s everything a Crypto Wallet needs to be. You can download it right now from the Martian Wallet website.
How to buy/invest in Aptos
At this point, I know what you’re thinking:
‘Aptos sounds amazing! I want in, but how can I buy Aptos?’
The problem is, for now, you can’t. The Aptos token isn’t publicly trading on any exchange. There’s no ICO for the public scheduled and we don’t even know if they’ll be one.
Right now, the only way to acquire Aptos tokens is to register for the Aptos Incentivised Testnet (AIT). The AIT is taking place in 4 different phases. It rewards users with Aptos tokens for testing the network and running a node. AIT3 registration is open on August 19, with the phase launching on August 30. Participants are rewarded with up to 500 Aptos tokens for their efforts.
If you want to be involved, it’s definitely worth following the official Aptos Twitter and Medium pages. I’d also recommend downloading the Martian Wallet and playing around on some of the Aptos projects. It’s free and you never know which ones might send out airdrops for testers. 👀
Redflags?
Despite all the bullish indicators I’ve mentioned, there’s still something ringing alarm bells for me. Aptos Labs still hasn’t released a complete whitepaper. There has been no announcement of tokenomics.
At this stage we still know nothing about how many Aptos tokens will be in the supply. We don’t know how many will be allocated to VCs and private investors. The amount of funding the team has already raised is astronomical, but will it be well-distributed? If private investors have swallowed the majority of the supply, it’s possible that Aptos price action will be a bloodbath.
some additional entries
— Hsaka (@HsakaTrades) July 26, 2022
– Chamath and co joke about dumping their Aptos position (via Multicoin) on retail
– token launches at < 1% circulation
– same cabal of 3-4 VCs in each project
– fintwit creams their pants over it for two quarters
– every eco project has “Apto” prefixed https://t.co/JQXxbpm5I3
With all the comparisons to Solana, Aptos could be lining up a similar price chart in the future. We could see a sustained quiet stage, then a massive pump and brutal dump. VCs win, and retail gets rekt.
Yes, Solana price action was volatile, but there’s a game to be played here. There was still plenty of opportunity to get in early on SOL before it took off overnight. Keep an eye on private sale vesting periods and unlocks. Don’t get left holding the bag.
Final Thoughts
Aptos is shaping up to be one of the biggest opportunities in the next crypto bullrun. On paper, Aptos Labs has everything it needs to go the distance and dominate the Layer 1 race. After using the Aptos testnet, I wasn’t just impressed. I was blown away by its speed and simplicity. Let’s refresh some key points:
- Fastest blockchain we’ve ever seen
- Dedicated, security focussed programming language
- Originally designed by Meta to service billions of users
- Enormous funding from the biggest names in Web3
- Partnership with Google to aid in decentralization
- 3 Years of development from the industry’s best minds
The release of the Aptos Labs Whitepaper and tokenomics are crucial. An unfavourable token allocation and vesting schedule could kill the project before it even takes off. In any case, I’ll be putting my name forward for the next phase of the AIT, and eagerly awaiting the mainnet launch this Autumn.
Is Aptos Labs really the ultimate solution to the Blockchain Trilemma? Or is it a co-ordinated VC pump and dump? Let me know your thoughts in the comments below, and be sure to sign up for our Newsletter!
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