Dubbed a potential “Solana killer” by many, Aptos is the latest high-profile attempt to build the perfect blockchain for smart contracts, code that supports the sprawling world of NFTs, DAOs, and DeFi.
It recently gave out over 20 million APT tokens to early users of its network worth roughly USD $184,179,290.41 at the time of writing via a tweet announcement. However, in my opinion, there may be more upside potential to this cryptocurrency than just a quick airdrop we have seen plenty of times before. Let’s dive a bit deeper into this
What Is Aptos
2019 saw the launch of Libra, a blockchain project developed by Meta (Facebook at the time), which was later renamed, Diem. However, the tech giant abandoned the project as a result of pressure from government regulators (and a lot of criticism from the cryptocurrency community).
Diem’s primary point of differentiation was through “parallel execution.”
Mo Shaikh and Avery Ching, two former Meta engineers, are the minds behind the blockchain project Aptos, which is seen as the technological offspring of Meta’s shelved project Diem.
Aptos is a Proof-of-Stake-based Layer 1 blockchain that utilises the use of parallel transactions and a new smart contract language called Move to theoretically process over 100,000 transactions per second. To put this into context, Ethereum was only able to accomplish this after the Merge.
In March of this year, Aptos made its first headlines in the cryptocurrency sector when it was revealed that it had raised USD $200 million in a seed round led by renowned venture capital firm Andreessen Horowitz. In a Series A funding round led by FTX Ventures and Jump Crypto in July, the startup raised an additional USD $150 million at a pre-money valuation of USD $1.9 billion, before its valuation reached USD $4 billion in a venture raise led by Binance Labs two months later.
What Makes Aptos Unique?
Aptos is driven by two things: Move, a Rust-Based programming language that Meta independently developed, and the network’s exceptional parallel transaction processing capabilities. Let’s look a little further at these.
Aptos was created with Move in mind, and it has the potential to scale and achieve massive transaction volumes without compromising security. For the crucial phases of transaction processing, it uses a pipelined and modular architecture.
A pipeline is a process that drives software development through a path of building, testing, and deploying code. Modular pipelines allow you to instantiate pipelines multiple times while allowing the user to override inputs/outputs/parameters. “With this modular design, Aptos supports faster and safer release cycles, as changes can be targeted to individual modules. The modular design also provides a structured path to scaling validators beyond a single machine, providing access to additional computation, network, and storage resources.” – Aptos via Medium. Seems more efficient right?
To put this in perspective, the majority of blockchains, like Bitcoin and Ethereum, process transactions and smart contracts in a particular order. Simply put, this means that each transaction in the mempool, which is where submitted transactions wait to be confirmed by network validators, must be independently validated in a particular sequence. Because the entire network is essentially performing the same task and acting as a single node, the increase in computing power of the network does not convert into faster transaction processing.
Parallel Transaction – This means that its network makes use of all physical resources to complete numerous transactions at once. This results in much faster network throughput and transaction times, which lowers costs and improves the user experience for blockchain users.
“To maximise throughput, increase concurrency, and reduce engineering complexity, transaction processing on the Aptos blockchain is divided into separate stages. Each stage is completely independent and individually parallelisable, resembling modern, superscalar processor architectures. Not only does this provide significant performance benefits but also enables the Aptos blockchain to offer new modes of validator-client interaction.” – Aptos through its Whitepaper.
At the time of writing, Aptos is currently operating at around 11 transactions per second but looks to increase as more initiatives are added to Aptos, according to Mo Shaikh.
Much like every new cryptocurrency made, Tokenomics is an incredibly important factor in what makes a currency succeed. Let’s take a look at Aptos
1 billion Aptos tokens were made available initially with 510 million going to community members, 190 million going to core developers, and the remainder going to the Aptos Foundation and individual investors.
The blockchain is created and maintained by a centralised organisation called Aptos Labs, which also controls another 100 million tokens.
Tokens owned by existing core contributors and private investors are subject to a four-year lockup period beginning with the mainnet launch, according to Aptos. This is crucial for the stability and security of the cryptocurrency in order to prevent future “dumping” on investors.
Holders who stake their tokens to support network maintenance receive rewards. The statement said, “Currently, the maximum reward rate starts at 7% annually and is evaluated at every epoch,”
“The maximum reward rate declines by 1.5% annually until a lower bound of 3.25% annually,” It continued, noting that all transaction fees are now burned but this may change depending on future governance decisions made by the Aptos community.
In my opinion, with everything I’ve read, I can say that I do identify Aptos as the result of several current and past issues/mistakes that have occurred in the Blockchain/Cryptocurrency world.
I say this because I have noticed several other Layer 1 networks and sidechains make similar claims concerning transactions per second, including Solana and Polygon, and have suffered numerous network outages since their inception. Whether Aptos is trying to avoid this in the future or will end up falling for the same issues is something only time will tell.
However, I will say this. In the early stages of this industry that we are currently in. It is most important to back the development team rather than what is marketed on a document. I for one really like what I am seeing in the team that is behind Aptos through simple things such as the ability to recognise improvement (Shaikh acknowledging the launch “could have gone better,” and that building a decentralised community from scratch is “tough.”). Furthermore, with everything we know now about Move and Parallel Transactions, as a viewer and investor of the space, I can appreciate innovation.
With the token already supported by many popular exchanges such as FTX, Binance and Coinbase, I am certainly not betting against Aptos and will be watching what they do very closely.