#Aptos $APT
Founded in late 2021, Aptos is a public blockchain inheriting many of the technical innovations made by Meta in the blockchain space and is backed by an impressive lineup of investors. Since the launch of the mainnet in October 2022, Aptos has demonstrated its efficiency and reliability, establishing itself as a leader among the next-generation public blockchains. With its prosperous and engaging ecosystem, it may gain more significant growth in the future.
Executive Summary
Founded in late 2021, Aptos is a public blockchain.
From a team perspective, Aptos has deep ties to Diem (formerly known as Libra) and Novi, which were developed by Meta. After Meta faced regulatory pressure and was forced to abandon its blockchain endeavors, several core members of the original dev team chose to build Aptos. In a sense, Aptos can be seen as one of the heirs to Meta’s blockchain legacy. As one of the leading software development companies, Meta has a strong talent pool with excellent academic backgrounds and reliable technical development capabilities. With the continuous growth of Aptos, its development will be backed by a solid team.
In terms of funding, as of November 7, 2024, Aptos has gone through six funding rounds. Before its mainnet launch in 2022, Aptos secured $350M in funding at a valuation of $2.75B. Afterward, it closed four strategic funding rounds with undisclosed amounts. Its investors are top-tier crypto VCs such as Binance Labs, Dragonfly Capital, a16z, Multicoin Capital, Circle, and Coinbase Ventures. The latest funding round was closed on September 19, 2024. Therefore, it can be expected that the Aptos team is now rather well-funded.
From a product and technical perspective, Aptos aims to build a scalable, secure, reliable, and upgradable smart contract platform. The decentralized foundation for a secure, scalable, and upgradeable Web3 environment that Aptos uses are the Move programming language, the DiemBFT consensus algorithm, the Block-STM parallel execution engine, and an efficient node synchronization scheme. While focusing on scalability and security, Aptos has made some trade-offs in terms of decentralization. Although the number of nodes in the network is small and the entry barriers are high, posing the centralization risk, the performance advantages of Aptos are apparent. After its mainnet launch, Aptos processed more than 12,000 transactions per second and more than 300M transactions per day at its peak, with a latency of less than 1 second. Besides, it has never encountered delays or network downtime, which proves its efficiency and reliability in processing transactions. Additionally, in terms of transaction costs, Aptos has significantly reduced gas fees for users, thus offering more space for the development of DeFi and other sectors in its ecosystem.
From a project development perspective, since its inception, Aptos has been gaining momentum, especially since Q3 2024. The number of active addresses has been steadily increasing with strong user retention, and the tx count has seen significant growth. On August 15, 2024, it set a record for processing over 300M transactions in a single day, with peak transaction throughput approaching 13,000 TPS, further validating the impressive performance of the Aptos blockchain. Aptos has been sparing no effort to cultivate its ecosystem. At present, protocols running in the Aptos ecosystem cover different verticals such as DeFi, gaming, and social. At the same time, Aptos is actively maintaining strong relationships with Web2 enterprises and regulatory bodies, with collaborations with companies like Microsoft, Google, Alibaba, Amazon, South Korea’s Lotte, and SKT. Additionally, at the end of October 2024, the native USDT (Tether) officially went live on Aptos, which is expected to bring more liquidity to Aptos and unlock greater potential of the Aptos ecosystem.
From a tokenomics perspective, $APT plays a dual role in the Aptos ecosystem, providing both utility and governance capabilities. Users can use $APT tokens to participate in network consensus, vote on proposals, pay for the gas fees, and drive the growth of the Aptos ecosystem. At present, most of the initial total supply of $APT is held by the Aptos Foundation and is designated for ecosystem-related items, such as grants, incentives, and other community growth initiatives. This allocation manifests Aptos’ strong focus on the long-term growth of its ecosystem.
From the perspective of the sector, the public blockchain sector where Aptos runs has gone through several bull and bear runs, as well as the evolution of blockchain technology. The demand and understanding for public blockchains have become increasingly clear. It is evident that the consensus algorithm and performance of a public blockchain are the roots that allow its ecosystem to thrive. The prosperity of the ecosystem is the fruit that grows from these roots. To be qualified as an outstanding public blockchain, the underlying technology must be robust enough to yield good results, and at the same time, these results must be remarkable enough to gain market recognition. Currently, Aptos has laid a solid foundation for cultivating a thriving ecosystem with its well-designed technical architecture, and it has nourished the seeds through its well-designed tokenomics model and ecosystem growth plans. It now waits for the subsequent growth of ecosystem projects to produce impressive results. From a competitive landscape perspective, Ethereum and Solana are still in the top tier. Aptos, along with Sui, are orders of magnitude behind them in many respects (except for network performance). Aptos and Sui were both founded by former Meta employees and developed using the same programming language (Move), with comparable network performance. However, the two blockchains have different focuses in ecosystem development, which has caused some divergence in market perception. We believe that as Aptos continues to nurture its ecosystem and as more ecosystem projects gain traction, Aptos is expected to gain more significant growth.
1. Overview
1.1 Project Profile
Founded in late 2021, Aptos is a public blockchain inheriting many of the technical innovations made by Meta in the blockchain space and is backed by an impressive lineup of investors. Since the launch of its mainnet in October 2022, Aptos has demonstrated its efficiency and reliability, establishing itself as a leader among the next-generation public blockchains. With its prosperous and engaging ecosystem, Aptos may gain more significant growth in the future.
1.2 Basic Information [1]
2. Project Details
2.1 Team
The dev team behind Aptos, Aptos Labs, is primarily located in California, North America, with employees spread across the globe. The total number of employees is estimated to be over 100, with LinkedIn showing 225 employees. According to the Aptos whitepaper, before the mainnet launch in 2022, over 350 developers had been involved in the development of Aptos. According to the official website[2], Aptos’ leadership team currently includes 16 founding members and 12 department heads. Some core members are introduced as follows:
Mo Shaikh — Co-Founder & CEO: Mo holds a BS in Accounting from Hunter College and an MBA from the University of Rochester. After graduating, he worked in real estate and private equity analysis at firms like KPMG, Blackstone, and Boston Consulting Group. In 2017, Mo founded Meridio (a blockchain-based platform for investing in and trading fractional shares of real estate with liquidity), where he also served as CEO. In May 2020, Mo joined Novi (Meta) as a Strategic Partner. In December 2021, Mo co-founded Aptos and has served as CEO ever since.
Avery Ching — Co-Founder & CTO: Avery holds a BSc and PhD in Computer Engineering from Northwestern University. After graduating, he served as the Principal Software Engineer at Yahoo, Facebook, and Novi Financial. With over 20 years of experience in technical development, Avery has a wealth of expertise in both the traditional Internet industry and the blockchain industry. At the end of 2021, after Novi’s pilot program concluded, Avery chose to co-found Aptos with Mo and has served as CTO ever since.
Alin Tomescu — Head of Cryptography: Alin holds a BS in Computer Science from Stony Brook University and both a Master’s and Ph.D. in Computer Science from MIT. He served as a Teaching Assistant and Research Assistant at MIT’s Department of Electrical Engineering and Computer Science for over six years. In 2020, Alin left MIT to join VMware as a Research Scientist. In February 2022, Alin joined Aptos as a founding member and has served as the Head of Cryptography ever since.
David Wolinsky — Head Architect: David holds a PhD in Computer Engineering from the University of Florida. After graduating, he spent four years as a Lecturer at Yale University. In 2015, David joined Facebook as a Software Engineer and later became the Tech Lead of Web3 at Meta (Novi). In February 2022, after Novi’s pilot program concluded, David chose to join Aptos as a founding member and has served as Head Architect ever since.
Neil Harounian — Head of Ecosystem: Neil holds a BSc in Finance from NYU Stern School of Business. After graduating, he worked in investment banking and later joined several crypto VCs. In January 2022, Neil joined Aptos as a founding member and has served as Head of Ecosystem ever since.
Sasha Spiegelman — Head of Research: Sasha holds a Bachelor’s degree in Electrical Engineering from the Technion — Israel Institute of Technology and a PhD in Distributed Systems. After graduating, he joined VMware, where he worked on blockchain research. In 2020, Sasha joined Novi Financial as a Senior Blockchain Researcher. In February 2022, after Novi’s pilot program concluded, Sasha chose to join Aptos as a founding member and has served as Head of Research ever since.
Zekun Li — Head of Blockchain: Zekun holds a BSc in Computer Science from Fudan University and an MS in Computer Science from the University of Southern California. After graduating, he joined Instagram as a Software Engineer and later joined Meta (Diem) in 2018, where he worked as a Staff Software Engineer. In February 2022, after Diem and Novi’s pilot program concluded, Zekun chose to join Aptos as a founding member and has served as Head of Blockchain ever since.
Asha Dakshinamoorthy — Product Lead: Asha holds a BBA in Quantitative Finance from Texas McCombs School of Business. After graduation, she worked as a Consultant at Deloitte. In 2017, Asha joined ConsenSys, the dev team behind MetaMask, where she served as Product Lead. In 2019, Asha joined AlphaPoint, a white-label software company, as Head of Product. Later that year, she transitioned to Templum Inc., a security token service provider, also as Head of Product. In June 2022, Asha joined Aptos Labs as Product Lead and has held the position ever since.
It can be seen that Aptos has deep ties to Diem (formerly known as Libra) and Novi, which were developed by Meta. After Meta faced regulatory pressure and was forced to abandon its blockchain endeavors, several core members of the original dev team chose to build Aptos. In a sense, Aptos can be seen as one of the heirs to Meta’s blockchain legacy. As one of the leading software development companies, Meta has a strong talent pool with excellent academic backgrounds and reliable technical development capabilities. With the continuous growth of Aptos, its development will be backed by a solid team.
2.2 Fundraising
Table 2–1 Aptos Funding Insights
As of November 7, 2024, Aptos has gone through six funding rounds. Before its mainnet launch in 2022, Aptos secured $350M in funding at a valuation of $2.75B. Afterward, it closed four strategic funding rounds with undisclosed amounts. Its investors are top-tier crypto VCs such as Binance Labs, Dragonfly Capital, a16z, Multicoin Capital, Circle, and Coinbase Ventures. The latest funding round was closed on September 19, 2024. Therefore, it can be expected that the Aptos team is now rather well-funded.
2.3 Code
Figure 2–1 # of Commits Created in Aptos’ Repositories[3]
Figure 2–2 # of Code Authors for Aptos
Aptos’ source code is open-source on GitHub. Figures 2–1 and 2–2 show that there are up to ~70 active code authors (~50 now) at peak who have created a total of 40,233 commits to Aptos’ repositories. The dev activity surged in Q3 2022, Q3 2023, and Q2 2024 when the team was focused on the dev work of introducing the incentivized testnet & the mainnet, the Move language & a new on-chain identity solution, and a new fungible asset standard & the Raptr consensus protocol, respectively. Overall, Aptos has maintained a stable development pace, without any significant signs of development stagnation. Therefore, it is expected that Aptos will continue to demonstrate strong technical development potential in the future.
Aptos’ source code is open-source on GitHub. Figures 2–1 and 2–2 show that there are up to ~70 active code authors (~50 now) at peak who have created a total of 40,233 commits to Aptos’ repositories. The dev activity surged in Q3 2022, Q3 2023, and Q2 2024 when the team was focused on the dev work of introducing the incentivized testnet & the mainnet, the Move language & a new on-chain identity solution, and a new fungible asset standard & the Raptr consensus protocol, respectively. Overall, Aptos has maintained a stable development pace, without any significant signs of development stagnation. Therefore, it is expected that Aptos will continue to demonstrate strong technical development potential in the future.
2.4 Product & Technology
Aptos is a blockchain aiming to bring mainstream adoption to decentralized ecosystems by offering scalability, safety, reliability, and upgradability. The Aptos blockchain aims to bring mainstream adoption to Web3 and solve real-world problems with a decentralized ecosystem of applications. In line with its principles and vision, Aptos has made unique designs in the consensus algorithm, smart contracts, network security, performance, and decentralization.
2.4.1 Vision & Technical Architecture
Aptos aims to build a scalable, secure, reliable, and upgradable smart contract platform, implicitly addressing the “Blockchain Trilemma.” The “Blockchain Trilemma” was introduced by Ethereum founder Vitalik Buterin, who believes that the blockchain trilemma consists of three attributes: decentralization, security, and scalability. The main idea of the blockchain trilemma is that by using so-called simple methods, a blockchain cannot be simultaneously decentralized, secure, and scalable.
For example, Ethereum and Bitcoin sacrifice decentralization in favor of scalability and security. Next-gen public blockchains such as Solana prioritize scalability while compromising on decentralization and security. In contrast, according to the Aptos whitepaper and its blog posts, it is designed with scalability, safety, reliability, and upgradeability, without specifically mentioning decentralization. Therefore, it implies that Aptos has chosen to prioritize scalability and performance at the expense of decentralization.
Table 2–2 Aptos: Goals & Technologies
According to the Aptos whitepaper, the Aptos blockchain is built on the following core design principles:
1) Fast and secure execution along with simple auditability and mechanical analyzability via a new smart contract programming language, Move.
2) Extremely high throughput and low latency through a batched, pipelined, and parallelized approach to transaction processing.
3) Novel parallel transaction processing that efficiently supports atomicity with arbitrarily complex transactions through Block-STM.
4) Optimizations for performance and decentralization via rapid, stake-weight validator set rotation and reputation tracking.
5) Upgradeability and configurability as first-class design principles to embrace new use cases and the latest technology.
6) Modular designs that enable rigorous component-level testing along with appropriate threat modeling and seamless deployment.
We will then dive into the core technologies used by Aptos.
2.4.2 The Move Language
In 2021 the Diem Engineering Team’s article “Why Build Move,[4]” the use of programming languages in blockchain is discussed. In any blockchain, the role of the chosen language is to provide accurate representations of state and transition. State: 1) What is the value of an asset? 2) where is the asset stored? 3) who has ownership of the asset?; Transition: 1) who can create/destroy/move assets? 2) what state transitions are allowed? 3) what are the rules for transferring assets?
Additionally, due to the inherent characteristics of blockchains, for any programming language to be suitable for blockchain use, it must be deterministic, hermetic, and metered:
Deterministic: A blockchain uses a state machine replication (SMR) approach, thus the programming language must ensure determinism to make sure that validators can maintain state consistency. In the case of C, for example, the lack of memory safety is untenable, while a language like Java allows for operations with undefined semantics — making either of these unsuitable for safely expressing state transitions for the SMR approach.
Hermetic: Due to the necessity of maintaining fidelity on the blockchain, it is vital that the inputs to transaction execution are strictly limited. In the case of a blockchain, programs must only be allowed to accept inputs from the global state or the current transaction. Any reference to an external source jeopardizes the ability to form consensus by presenting the possibility for returning differing values for different validators.
Metered: To ensure that the network continues to process transactions, each state transition must be assigned an upper bound on resource consumption. Without defined bounds, the network may stall in the presence of long-running or even non-terminating transactions. This is the impetus for the gas function in many blockchains, which limits the runtime of each individual program and terminates if the limit is breached. This metering functionality is almost never a built-in component of general-purpose languages, thus a specialized programming language is required to provide the metering functionality for blockchains.
To make the execution of the transactions on the Aptos blockchain retain the attributes of deterministic, hermetic, and metered, and ensure the security and reliability of the blockchain network, the Move language, inspired by languages like Rust, introduced the concepts of “resources” and “modules” in its design.
Move is a language using a “resource-based” approach. “Resources” in Move are essentially objects that have certain attributes, and any assets in Move can be represented by or stored within resource. Besides, Move emphasizes resource scarcity. Move modules define the lifetime, storage, and access pattern of every resource. This ensures that resources like Coin are not produced without appropriate credentials, cannot be double spent, and do not disappear.
Modules are libraries that define struct types along with functions that operate on these types and are defined by the account address and module name. A module in Move may either be a library or a program that can create, store, or transfer assets. Move also emphasizes “access control”. There are two types of modules in Move: private modules and public modules. Move ensures that only public module functions may be accessed by other modules. In contrast, private modules cannot be accessed by other modules and can only be mutated within the module that defines it. By distinguishing between private and public modules, the security of Move is further enhanced. In addition, modules will be grouped into a package located at the same address. An owner of this address publishes the package as a whole on-chain, including the bytecode and package metadata. The package metadata determines whether a package can be upgraded or is immutable. The owner can add new functions and resources to the package without changing the existing functions and resources, thus enhancing the programmability and upgradability of smart contracts. In addition to modules, Move also has a type of program called scripts, which accepts any number of arguments but returns nothing. Their primary purpose is to invoke public modules to make a specific global state update.
Through the design of resources and modules, Move not only makes the execution of the transactions on the Aptos blockchain retain the attributes of deterministic, hermetic, and metered but also enables efficient and secure transaction execution. Additionally, it facilitates the future updating of code.
2.4.3 DiemBFT
A consensus mechanism (also known as a consensus protocol or consensus algorithm) refers to the mechanism that ensures the collaborative operation and secure record-keeping in a distributed system. It is the mechanism used to sort and confirm blocks (transactions) among a set of validators.
Different blockchains may adopt different consensus algorithms based on their goals. Bitcoin, for example, uses the Proof of Work (PoW) mechanism, where miners compete to solve a complex mathematical problem, and the first one to solve it gets to add a new block to the blockchain and receives a reward. PoW is the consensus algorithm that underpins decentralization, while the process consumes considerable computational power and energy, making it costly and resource-intensive. On the other hand, the early Proof of Stake (PoS) mechanism operates by adjusting mining difficulty based on the % and duration of tokens staked by a node operator, thus speeding up the process of finding the random number. PoS is less decentralized than PoW. However, by avoiding the computational puzzle, the PoS mechanism reduces energy consumption significantly and speeds up the transaction verification process.
Today, the Aptos blockchain leverages DiemBFT, a BFT consensus protocol. DiemBFT is a production-grade, low-latency BFT engine developed by Aptos. It is a variant of the HotStuff consensus protocol that was designed for Diem. To improve efficiency, the BFT consensus mechanism only requires a specific minimum number of nodes to function effectively. The formula to determine the minimum number of nodes needed to achieve BFT is: n ≥ 3f + 1, where f represents the maximum number of faulty nodes the system can tolerate. For example, if N = 3f+1, 1/3 of the nodes could suffer from byzantine failure, and the entire system will still operate with no issues.
Over the past few years, DiemBFT has gone through four iterations, with the following improvements:
1) Consensus in the common case only requires two network rounds (with round trip times typically less than 300 milliseconds worldwide).
2) Dynamically adjusts to faulty validators through a leader reputation mechanism. The on-chain leader reputation mechanism promotes validators that have successfully committed blocks in a window and demotes validators that are not participating.
In a BFT consensus mechanism, a leader rotation mechanism is typically used, where an elected leader proposes a block of transactions. However, many leader rotation mechanisms do not account for the leader’s state, meaning that a faulty node could be selected as the leader. If too many faulty nodes are chosen as leaders, it can negatively impact the speed and efficiency of the blockchain network.
Therefore, DiemBFT v4 introduced State Machine Replication (SMR), which takes into account the liveness and effectiveness of the nodes. Liveness means tracking the activity of nodes by analyzing the data on-chain and electing leaders from them. In the event that a leader is attacked, compromised, or becomes inactive due to network disruptions, the reputation system ensures that a new leader can be quickly and reliably selected.
Furthermore, the Aptos protocol clearly separates liveness from safety. No matter if the network is unreachable or the non-safety core is compromised in some way, the chain will not fork as long as the BFT honesty guarantees are upheld. The safety of its consensus protocol has been both audited and formally verified.
Currently, Aptos is working on the next-generation consensus protocol, and in September 2024, Alexander Spiegelman, Head of Research at Aptos Labs, announced that Aptos will soon be launching a next-gen BFT consensus protocol, Raptr, which combines the main Directed Acyclic Graph (DAG) techniques to unlock high TPS while preserving Aptos’ optimal theoretical latency. It is expected that Raptr will be deployed in two phases.
2.4.4 Block-STM
When we describe the performance of public blockchains, the two commonly used metrics are Throughput and Finality. Throughput refers to the number of transactions a blockchain can process per second, while Finality refers to the time measured from when a client creates and submits a transaction until another party confirms the transaction is committed.
As of November 12, 2024, after its mainnet launch, Aptos processed more than 12,000 transactions per second and more than 300M transactions per day at its peak, with a latency of less than 1 second. Besides, it has never encountered delays or network downtime. Theoretically, Aptos can achieve up to 160,000 TPS.
These impressive statistics are a direct result of Aptos’ superior transaction processing architecture:
1) Decoupling the consensus protocol from the execution pipeline: The consensus protocol agrees on a proposed transaction ordering. In a separate protocol and outside of the critical path, validators execute the transactions and have an agreement on the final transaction ordering and execution results. By eliminating the co-dependencies that come with combining consensus and execution, higher throughput and lower latency are achieved. Aptos Labs is focusing its efforts on this decoupling for their next protocol iteration, which is on track to be integrated into testnet later this year.
2) Block-STM Parallel Engine: Aptos uses a highly efficient, multi-threaded, in-memory parallel execution engine called Block-STM. STM stands for Software Transactional Memory, a new approach to engineering that supports flexible transactional programming of synchronization procedures.
On Ethereum, the Ethereum Virtual Machine (EVM) is single-threaded, with only one core to process transactions. When there is a surge in network activity, a large number of transactions can pile up, and it takes longer to process them. To address this issue, next-gen blockchains like Solana have adopted multi-threaded parallel processing. Aptos also uses a multi-threaded parallel execution engine to process transactions. According to the current tests, under low contention, Block-STM achieves 16x speedup over sequential execution with 32 threads.
Aptos implemented Block-STM in safe Rust in the Aptos open-source codebase, relying on Rayon, Dashmap, and ArcSwap crates for concurrency. Besides, it evaluated the system with non-trivial peer-to-peer Move transactions. In Figure 2–3 below, every block contains 10k transactions and the number of accounts determines the level of conflicts and contention. Figure 2–3 shows that the transaction throughput varies with different thread counts and account numbers.
Figure 2–3 Block-STM Performance with Different Contention Levels[5]
As seen in the figure above, the transaction throughput for sequential execution is not affected by the number of threads, with a consistent throughput of 10,000 TPS. In contrast, Block-STM achieves 4x, 11x, and 16x speedup over sequential execution with 4, 16, and 32 threads, respectively. It can be seen that the parallel engine significantly boosts transaction speed. As the number of users increases, the advantage of using 32 threads becomes more apparent, enabling a higher transaction throughput.
3) Optimized Authenticated Data Structures: One challenge is that while authenticating the ledger state (e.g., account balances, smart contracts, etc.), in-memory Merkle trees are efficient at small scale. However, writing large Merkle trees to persistent storage is a bottleneck. Aptos is designing its authenticated data structures to be database-friendly by exploring higher branching factors, access pattern-optimized caching, and careful versioning.
2.4.5 State Synchronization
State sync is the protocol that allows non-validator peers to distribute, verify, and persist this blockchain data and ensures that all peers in the ecosystem are synchronized. Most blockchains today are structured hierarchically, with a set of active validators at the heart of the network. The validators grow the blockchain by executing transactions, producing blocks, and achieving consensus. The rest of the peers in the network (e.g., fullnodes and clients) replicate the blockchain data produced by the validators (e.g., blocks and transactions).
Figure 2–4 Aptos Node Networks[6]
Figure 2–4 above shows that the validators are interconnected, and in addition to them, there are fullnodes, clients, and other non-validator nodes responsible for various functions. In this process, state synchronization plays a crucial role in the sound operation of the blockchain.
1) Data correctness: State sync is responsible for verifying the correctness of all blockchain data during synchronization. This prevents malicious peers and adversaries in the network from modifying, censoring, or fabricating transaction data and presenting it as valid.
2) User experience: When new transactions are executed by validators, state sync is responsible for propagating the data to peers and clients. If state sync is slow or unreliable, peers will perceive long transaction processing delays, artificially inflating the time to finality.
3) Relationship with consensus: Validators that crash or fall behind the rest of the validator set rely on state sync to bring them back up to speed. If state sync cannot process transactions as quickly as they are executed by consensus, crashed validators will never be able to recover. Moreover, new validators will never be able to start participating in consensus and fullnodes will never be able to sync to the latest state.
4) Implications on decentralization: Having a quick, efficient, and scalable state sync protocol allows for: (i) faster rotations of an active validator set, as validators can move in and out of consensus more freely; (ii) more potential validators to choose from in the network; (iii) more fullnodes to come online quickly and without having to wait long periods of time; and (iv) lower resource requirements, increasing heterogeneity. All of these factors increase decentralization in the network and help to scale the blockchain in size and geography.
To enable more efficient state synchronization, Aptos adopts the following measures:
1) Supporting a spectrum of different state synchronization protocols that tradeoff CPU and network bandwidth. Nodes can select the most suitable protocol based on their needs, encouraging more nodes to join the Aptos network.
2) In order to support inexpensive fullnodes, Aptos has a protocol that can sync transactions and their executed results signed by a quorum of validators that allows a node to skip the computation at the cost of higher networking throughput and directly update the ledger state from the executed results.
3) Instead of having to download a chain of blocks to get to the latest ledger as most blockchains do, a client can use the top-level transaction accumulator to get the latest committed transaction. This also allows for inexpensive pruning of previous transactions and ledger history if desired.
Through the implementation of state sync, Aptos has improved throughput by 10x and latency by 3x. Besides, peers can validate and synchronize over 10k TPS with sub-second latency in Aptos today.
2.4.6 Security Design
The Aptos blockchain aims to bring mainstream adoption to Web3 and solve real-world problems with a decentralized ecosystem of applications. To reach billions of Internet users, the Web3 user experience must be safe. Given the frequent occurrences of fraud in the blockchain space, measures need to be implemented to increase the security of user transactions:
1) Transaction Viability Protection
Signing a transaction means that the signer authorizes the transaction to be committed and executed by the blockchain. Occasionally, users may sign transactions unintentionally or without fully considering all the ways in which their transactions might be manipulated. To mitigate this risk, the Aptos blockchain constrains the viability of every transaction and protects the signer from unbounded validity. There are currently three different protections provided by the Aptos blockchain — the sender’s sequence number, a transaction expiration time, and a designated chain identifier.
A transaction’s sequence number can only be committed exactly once for each sender’s account. As a result, senders can observe that if the current account sequence number is ≥ the sequence number of a transaction t, then either t has already been committed or t will never be committed (as the sequence number used by t has already been consumed by another transaction).
The blockchain time advances with high precision and frequency (typically sub-second), If the blockchain time exceeds the expiration time of transaction t, then similarly, either t has already been committed or t will never be committed.
Every transaction has a designated chain identifier to prevent malicious entities from replaying transactions between different blockchain environments.
2) Key Rotation & Hybrid Models of Custody
Aptos accounts support key rotation, an important feature that can help reduce the risks associated with private key compromise, long-range attacks, and future advances that might break existing cryptographic algorithms. In addition, Aptos accounts are also flexible enough to enable new hybrid models of custody. In one such model, a user can delegate the ability to rotate the account’s private key to one or more custodians and other trusted entities. A Move module can then define a policy that empowers these trusted entities to rotate the key under specific circumstances. For example, the entities might be represented by a k-out-of-n multi-sig key held by many trusted parties and offer key recovery services to prevent user key loss. Moreover, while many wallets support various key recovery schemes, such as backing up private keys to cloud infrastructure, multi-party computation, and social recovery, they are typically implemented without blockchain support. In contrast, supporting key management functionality at the Aptos blockchain layer provides full transparency of all key-related operations.
3) Pre-Signing Transaction Transparency
Today, wallets provide very little transparency about the transactions they sign. As a result, users are often easily tricked into signing malicious transactions that may steal funds and have devastating consequences.
To address this, the Aptos ecosystem provides services for transaction pre-execution: a precautionary measure that describes to users (in human-readable form) the outcomes of their transactions prior to signing. In addition, Aptos also enables wallets to dictate constraints on transactions during execution. Violating these constraints will result in the transactions being aborted, to further protect users from malicious applications or social engineering attacks.
With these security designs, Aptos is able to provide users with a safer environment for using the blockchain.
Summary:
From a team perspective, Aptos has deep ties to Diem (formerly known as Libra) and Novi, which were developed by Meta. After Meta faced regulatory pressure and was forced to abandon its blockchain endeavors, several core members of the original dev team chose to build Aptos. In a sense, Aptos can be seen as one of the heirs to Meta’s blockchain legacy. As one of the leading software development companies, Meta has a strong talent pool with excellent academic backgrounds and reliable technical development capabilities. With the continuous growth of Aptos, its development will be backed by a solid team.
In terms of funding, as of November 7, 2024, Aptos has gone through six funding rounds. Before its mainnet launch in 2022, Aptos secured $350M in funding at a valuation of $2.75B. Afterward, it closed four strategic funding rounds with undisclosed amounts. Its investors are top-tier crypto VCs such as Binance Labs, Dragonfly Capital, a16z, Multicoin Capital, Circle, and Coinbase Ventures. The latest funding round was closed on September 19, 2024. Therefore, it can be expected that the Aptos team is now rather well-funded.
From a product and technical perspective, Aptos aims to build a scalable, secure, reliable, and upgradable smart contract platform. The decentralized foundation for a secure, scalable, and upgradeable Web3 environment that Aptos uses are the Move programming language, the DiemBFT consensus algorithm, the Block-STM parallel execution engine, and an efficient node synchronization scheme. While focusing on scalability and security, Aptos has made some trade-offs in terms of decentralization. Although the number of nodes in the network is small and the entry barriers are high, posing the centralization risk, the performance advantages of Aptos are apparent. After its mainnet launch, Aptos processed more than 12,000 transactions per second and more than 300M transactions per day at its peak, with a latency of less than 1 second. Besides, it has never encountered delays or network downtime, which proves its efficiency and reliability in processing transactions. Additionally, in terms of transaction costs, Aptos has significantly reduced gas fees for users, thus offering more space for the development of DeFi and other sectors in its ecosystem.
3. Development Trajectory
3.1 Accomplished Milestones
Table 3–1 Milestones Accomplished by Aptos
3.2 Current State
3.2.1 Key Metrics
Figure 3–1 Aptos Daily Tx Count[7]
Figure 3–2 Aptos Daily Active Addresses
Figure 3–3 Aptos Key Metrics — 1
Figure 3–4 Aptos Key Metrics — 2
According to Dune Analytics, as of 10:00 AM on November 11, 2024, there are 33,671,757 active addresses and 1,909,381,503 txs on Aptos. Over the past 30 days, the number of active addresses sat at 8,184,230, accounting for ~24.30% of the total address count. Since the beginning of 2024, the number of active addresses has amounted to 25,084,036, which makes up ~74.50% of the total. This data shows that Aptos has a strong user retention rate, indicating good user engagement and active participation within its ecosystem. Aptos has shown consistent growth in network usage since its mainnet launch in October 2022. Notably, in Q4 2024, there has been a significant surge in daily active addresses, with a similar upward trend observed in the tx count. In addition, due to the popularity gained by some ecosystem projects such as Tapos (a blockchain-based game), Aptos saw two peaks in the tx count in 2024 — one in May and another in August. On August 15, 2024, the daily tx count reached 326,972,362 txs, setting a new record for the highest daily tx count on Layer 1s ever recorded by Aptos. The peak throughput was close to 13,000 TPS. Despite this massive surge in transactions, the Aptos network did not experience any delays in producing blocks, demonstrating its exceptional network performance in handling a large number of transactions in parallel.
3.2.2 Ecosystem
As a Layer 1 blockchain, Aptos benefits from excellent network performance and has nurtured an engaging ecosystem.
As of November 11, 2024, there are 192 projects built on Aptos, covering 16 verticals, of which there are 49 DeFi projects, 48 infrastructure projects, 28 crypto wallets, 25 gaming projects, 18 social projects, and 16 NFT tooling projects, including several high-profile projects that have garnered significant market attention. Based on the number of projects across these sectors, the Aptos ecosystem is still in the early to mid stages of development, with a current focus on building infrastructure. As its ecosystem grows, more projects and use cases are expected to emerge, and the ecosystem will have greater potential for growth.
Table 3–2 Aptos Ecosystem Landscape[8]
Aptos has been actively advancing collaborations with and providing support to its ecosystem projects. It has provided new versions of the Move language, a new code compiler, a code formatter, a development suite, a new Aptos token standard, a new Wallet Adapter Standard, and more, thus helping dev teams in the Aptos ecosystem better leverage their unique advantages.
Additionally, the Aptos Foundation introduced the Aptos Grant Program and the Aptos Code Collision Hackathon. There are now four categories of the Grant Program that can be applied for: “Original Ideas”, “Idea Speakers”, “Gasless Transactions”, and “Strengthening Defense”, helping dev teams turn and monetize their ideas into blockchain projects from scratch. As of November 2024, there are more than 200 grant recipients, such as Thala Labs, Pontem Wallet, Merkle Trade, Mercato, Wapal, and Aptos Arena.
In addition to actively nurturing the ecosystem, thanks to the abundant resources earned by its core members (who are former Meta employees), Aptos has also been maintaining strong partnerships with Internet companies and Web2 enterprises around the world such as Amazon, Alibaba, Google, NBCUniversal, Microsoft, Brevan Howard, SK Telecom, Boston Consulting Group, and South Korea’s Lotte. Additionally, Aptos has fostered good relationships with U.S. regulatory bodies. In June 2024, the CFTC named Aptos co-founder and CEO Mo Shaikh to its subcommittee on digital assets.
3.2.3 Community
Table 3–3 Aptos Community
As of November 11, 2024, Aptos owns a large community, where its Twitter followers are rather active in liking and replying to tweets posted by Aptos; the number of members on Discord servers and Telegram is also large, and their discussions mainly revolve around the ecosystem growth and the $APT tokenomics model. The Aptos Forum also sees high levels of activity, with discussions centering around the current state of the Aptos protocol, upcoming technical upgrades, and its future direction of development.
3.3 Roadmap
Aptos has not yet disclosed a detailed roadmap. According to responses from its team members in the community, there are no plans to release a roadmap in the near future. However, they will continue to provide real-time updates on the protocol development through community channels.
At present, the dev work of the Aptos blockchain has been largely completed. Moving forward, the focus will likely shift toward network upgrades. The primary direction for the future growth of Aptos will probably center around growing the ecosystem and strengthening partnerships.
Summary:
From a project development perspective, since its inception, Aptos has been gaining momentum, especially since Q3 2024. The number of active addresses has been steadily increasing with strong user retention, and the tx count has seen significant growth. On August 15, 2024, it set a record for processing over 300M transactions in a single day, with peak transaction throughput approaching 13,000 TPS, further validating the impressive performance of the Aptos blockchain. Aptos has been sparing no effort to cultivate its ecosystem. At present, protocols running in the Aptos ecosystem cover different verticals such as DeFi, gaming, and social. At the same time, Aptos is actively maintaining strong relationships with Web2 enterprises and regulatory bodies, with collaborations with companies like Microsoft, Google, Alibaba, Amazon, South Korea’s Lotte, and SKT. Additionally, at the end of October 2024, the native USDT (Tether) officially went live on Aptos, which is expected to bring more liquidity to Aptos and unlock greater potential of the Aptos ecosystem.
4. Tokenomics
4.1 Supply
4.1.1 $APT Allocation [9]
The native token of Aptos is $APT, which is an inflationary token and was launched on the mainnet in October 2022. The initial total supply is 1,000,000,000. Initially, the annual inflation rate for $APT is 7%, with this rate gradually decreasing over time until it reaches a minimum of 3.25% after 50 years. These newly minted tokens will be used to reward the current and future node operators and $APT stakers to maintain the sound operation of the network. As of November 11, 2024, the total supply of $APT stands at 1,125,360,719, of which 520,057,351 has been put into circulation, accounting for 46.2% of the total supply.
Table 4–1 Initial Token Distribution[10]
Distribution Schedule for the Community and the Aptos Foundation
The Community (51.02%) and Foundation (16.5%) allocations are designated for ecosystem-related items, such as grants, incentives, and other community growth initiatives. Some of the tokens have been allocated to projects building on the Aptos protocol and will be granted upon the completion of certain milestones. A majority of these tokens (410,217,359.767) are held by the Aptos Foundation, and a smaller portion (100,000,000) are held by Aptos Labs. These tokens are anticipated to be distributed over a ten-year period:
1) 125,000,000 $APT available initially to support ecosystem projects, grants, and other community growth initiatives now and in the future for the Community category;
2) 5,000,000 $APT available initially to support the Aptos Foundation initiatives for the Foundation category;
3) 1/120 of the remaining tokens for the community and the Foundation are anticipated to unlock each month for the next 10 years.
Distribution Schedule for Core Contributors and Investors
The Core Contributor (19%) and Investor (13.48%) allocations are subject to a four-year lock-up schedule, excluding staking rewards if applicable, from mainnet launch that unlocks according to the following schedule:
1) No $APT available for the first twelve months;
2) 3/48ths of such tokens unlock on the 13th month after mainnet launch and each month thereafter up to and including the 18th month;
3) 1/48th of the tokens unlock each month thereafter beginning on the 19th month after mainnet launch so that all such tokens are unlocked on the four-year anniversary of mainnet launch.
It should be noted that according to the estimated $APT supply schedule, both unlocked (i.e., tokens that are available for distribution) and locked (i.e., not available for distribution) tokens can be staked. Hence, most of the tokens on the network are staked.
Figure 4–1 Estimated $APT Supply Schedule
According to Figure 4–1, more than 50% of the initial total supply goes to the community. However, most of the tokens are now still held by the Foundation to drive the growth of the ecosystem. Besides, since both locked and unlocked tokens can be staked, and $APT stakers can earn a portion of newly minted $APT tokens, the % of the community allocation to the total $APT supply will gradually decrease. Overall, $APT tokens are now distributed in a rather centralized manner (mostly held by the Foundation), which could pose challenges for the future participation of smaller token holders in the ecosystem.
4.2 Utility
$APT, as the utility and governance token of Aptos, has the following use cases:
1) The Aptos network operates on a PoS consensus algorithm where validators need to have a minimum required amount of staked $APT tokens to participate in transaction validation and earn block rewards.
2) As a participant in the Aptos ecosystem, once users have staked $APT tokens, they can vote on governance proposals, which include decisions related to network parameters, marketing strategies, ecosystem growth, and technical upgrades.
3) Users must pay transaction fees in $APT when executing transactions on the Aptos blockchain.
4) For rewarding ecosystem participants and community contributors.
4.2.1 Node Networks
The Aptos consensus mechanism uses PoS combined with a unique BFT consensus protocol for validators to collectively process transactions.
Figure 4–2 Aptos Node Map[11]
The Aptos blockchain distinguishes two types of fullnodes: validator nodes and fullnodes. While both types of nodes share the same code, they differ in their roles and responsibilities. Fullnodes replicate the entire state of the blockchain by synchronizing with upstream participants, e.g., other fullnodes or validator nodes. Besides, they connect directly to validator nodes and offer scalability alongside DDoS mitigation. However, fullnodes do not participate in consensus, and any third-party blockchain explorers, wallets, exchanges, and dApps can run a local fullnode. When a transaction is submitted to the Aptos blockchain, validator nodes run a distributed consensus protocol, execute the transaction, and store the transaction and the execution results on the blockchain. Users must stake the required minimum amount to join the validator set. Moreover, they can only stake up to the maximum stake amount. The current required minimum for staking is 1M $APT tokens and the maximum is 50M $APT tokens.
Figure 4–3 $APT Staking Stats
As of November 12, 2024, there are 150 validator nodes in the Aptos network, running in 47 cities in 23 countries. They have staked 909,136,163 $APT, accounting for 80.78% of the initial total supply. It can be seen that there is now still a small number of validator nodes in Aptos, which may introduce centralization risks. However, they are operated around the globe, somewhat ensuring the security of the Aptos network.
4.2.2 Delegated Staking
In April 2023, Aptos introduced delegated staking, which is a new feature allowing users to reap staking rewards without requiring them to serve as validators for the blockchain’s transactions. Besides, it also enhances the decentralization and security of the network.
Figure 4–4 Delegated Staking
Participants can stake $APT in the Aptos Explorer. After opening the Validators interface (in Figure 4–4), users can click on “Delegation Nodes” to browse a dropdown list showing the active validator nodes and their detailed information such as the delegated amount, # of delegators, commission, and rewards earned. If $APT token holders click the button to the left of a staking pool address, they will be able to view more detailed information about the staking pool. This includes the compound rewards (which represent the APR that accrue on staked $APT), the amount of rewards earned by this staking pool so far, rewards performance, etc. At present, the compound rewards earned on the stakes to different staking pools are ~7% APR. $APT holders can make an informed decision about which validator node to delegate their tokens to. Once they have chosen the preferred validator, they can click the “Stake” button on the right side to proceed with the delegated staking process.
Additionally, users can choose from several staking interfaces created by Aptos’ partners (e.g., wallets, staking portals). In this way, they can receive liquid staking tokens (LSTs) to perform more DeFi operations. Aptos’ partners who have created staking interfaces include Tortuga, Ditto, Thala, and others.
4.2.3 Governance
By staking $APT, Aptos community members can create and vote on proposals.
At present, to create a proposal, the required minimum for staking is 1M $APT tokens. Besides, the stake has to be locked up for 14 days and after the end of the 3-day voting period. However, any participant who stakes $APT can vote on governance proposals. Once $APT tokens are staked, the staker will receive a voter key, which represents the voting power of the token holder and can be used for voting, stored by a custodian, or delegated to other voters. Voting power is calculated based on the current epoch’s active stake of the proposer or voter’s backing stake pool.
On Aptos, a public blockchain, there are not many protocol decisions that can be made through governance and voting, mostly revolving around technical upgrades. The following describes the scope of the proposals for the Aptos on-chain governance:
1) Changes to the blockchain parameters, for example, the epoch duration, and the minimum required and maximum allowed validator stake.
2) Changes to the core blockchain code.
3) Upgrades to the Aptos Framework modules for fixing bugs or for adding or enhancing the Aptos blockchain functionality.
4) Deploying new framework modules.
As of November 12, 2024, a total of 116 governance proposals have been submitted on Aptos Governance, of which 1 proposal is currently in the voting phase, 7 proposals failed because there were not enough votes, 1 proposal was rejected (AIP-52: Automated Account Creation for Sponsored Transactions was initially rejected but was later re-submitted and passed), and 107 proposals have been passed and executed on-chain.
So far, some of the most important governance proposals on Aptos[12] include increasing block gas limit to account for concurrency increase, enabling the multisig prologue check, reducing stake lockup duration & governance voting duration, enabling yearly reward rate decrease, enabling fee payer, enabling delegated staking, implementing decrease in staking rewards, enabling keyless accounts, and changing the storage format. It can be seen that most of the governance proposals revolve around improving the network performance of Aptos, enriching the use cases of the Aptos ecosystem, and lowering the thresholds to submit/vote on proposals.
Summary:
From a tokenomics perspective, $APT plays a dual role in the Aptos ecosystem, providing both utility and governance capabilities. Users can use $APT tokens to participate in network consensus, vote on proposals, pay for the gas fees, and drive the growth of the Aptos ecosystem. At present, most of the initial total supply of $APT is held by the Aptos Foundation and is designated for ecosystem-related items, such as grants, incentives, and other community growth initiatives. This allocation manifests Aptos’ strong focus on the long-term growth of its ecosystem.
5. Sector Analysis
5.1 Sector Overview
Aptos runs in the public blockchain sector.
Public blockchains are a core piece of infrastructure in the crypto space and boast considerable room for growth. Therefore, an increasing number of users and funds have been flowing into the sector, making the competition among public blockchains very intense. The development of public blockchains can be roughly divided into three phases:
Phase 1 (2008–2013): Following the release of the Bitcoin whitepaper by Satoshi Nakamoto, Bitcoin gained significant popularity, leading to the emergence of many “altcoins” aiming to improve on Bitcoin and the first-gen public blockchains represented by Bitcoin.
Phase 2 (2014–2017): Ethereum was the first blockchain to support smart contracts and dApps with Turing completeness. Besides, the launch of NFT projects such as CryptoKitties allowed users to witness the use case of blockchain. Ethereum, with its strong first-mover advantage, has cultivated a prosperous ecosystem, with other public blockchains emerging during this period such as NEO, QTUM, and EOS.
Phase 3 (2018 — Present): Various consensus algorithms and validation mechanisms have facilitated the launch of many high-performance, low-cost public blockchains, represented by BSC, Solana, and Avalanche.
In the current phase, three main trends have emerged: 1) the continuous launch of different Ethereum Layer 2 solutions; 2) the development of monolithic blockchains leveraging new technologies, such as Aptos and Sui; 3) the development of blockchains tailored for meeting specific needs, such as privacy-focused blockchains and modular blockchains.
The fundamentals of a public blockchain can be analyzed from the following three perspectives:
1) Consensus Algorithm, which determines whether or not a blockchain is decentralized and censorship-resistant. The consensus algorithm used by a public blockchain can determine its network security. Users tend to lock their funds on blockchains they perceive to be the most secure, such as Bitcoin or Ethereum instead of Bitcoin Cash or Litecoin. How to design an efficient consensus algorithm is a significant challenge for most public blockchains, and their consensus mechanisms also determine their core competitiveness. For example, although EOS was once as popular as Ethereum, it eventually lost favor due to severe centralization among its nodes.
2) Technical Architecture, i.e., whether a public blockchain is able to achieve high performance. This revolves around the Blockchain Trilemma, which was proposed by Vitalik Buterin, the Founder of Ethereum. He believes that the blockchain trilemma consists of three attributes: decentralization, security, and scalability. The main idea of the blockchain trilemma is that by using so-called simple methods, a blockchain cannot be simultaneously decentralized, secure, and scalable. For example, Ethereum and Bitcoin sacrifice decentralization in favor of scalability and security. Next-gen public blockchains such as Solana prioritize scalability while compromising on decentralization and security.
3) Ecosystem Prosperity, whether a public blockchain can onboard a large number of developers to build and deploy protocols on the blockchain, thus nurturing an engaging ecosystem. Public blockchains are just a piece of infrastructure and need a large number of developers, ecosystem projects, and users to help them capture value. The more developers there are and the more prosperous the ecosystem, the larger the number of active users, leading to a significant increase in marginal returns.
The public blockchain sector has gone through several bull and bear runs, as well as the evolution of blockchain technology. The demand and understanding for public blockchains have become increasingly clear. It is evident that the consensus algorithm and performance of a public blockchain are the roots that allow its ecosystem to thrive. The prosperity of the ecosystem is the fruit that grows from these roots. To be qualified as an outstanding public blockchain, the underlying technology must be robust enough to yield good results, and at the same time, these results must be remarkable enough to gain market recognition.
5.2 Competitor Comparison
The competition among public blockchains is now rather fierce. At present, the position of Ethereum in the public blockchain sector remains unshakable. Besides, it strives to improve network efficiency and scalability through the ETH 2.0 upgrade and Layer 2 solutions. Among next-gen blockchains, Solana and BSC have also onboarded many talented dev teams to their ecosystems and boasted a large user base with their respective advantages. Additionally, among blockchains developed by former Meta employees, Sui launched its mainnet in May 2023, and Linera is still under active development. In contrast, Aptos has gained a first-mover advantage to nurture a robust ecosystem by launching its mainnet earlier than Sui and Linera.
To provide a more comprehensive view of the competitive landscape of the public blockchain sector where Aptos operates, the following three blockchains will be selected for comparison:
Ethereum: A decentralized, open-source blockchain platform allowing developers to build and deploy dApps and smart contracts. Founded in 2014, Ethereum introduced the concepts of Turing completeness and smart contracts, bringing programmability to the blockchain and enabling the development of dApps on the platform. With the largest number of developers and the most prosperous ecosystem, Ethereum is likely to remain a formidable competitor for any blockchain in the short term. Using Ethereum as a benchmark helps us better evaluate the fundamentals and the competitive landscape of Aptos in the public blockchain sector.
Solana: A high-performance blockchain that can achieve a peak throughput of up to 100,000 TPS. Founded in 2017, Solana has developed 8 key technologies: Proof of History (PoH), TowerBFT (a PoH-optimized version of PBFT), Turbine (a block propagation protocol), Gulf Stream, Sealevel (parallel smart contracts run-time), Pipelining, Cloudbreak (Horizontally-Scaled Accounts Database), and Archivers (distributed ledger storage). By leveraging these technologies, Solana significantly improves the network performance and gains a strong competitive edge over other next-gen blockchains. After recovering from a challenging bear market, Solana has proven its resilience and value, positioning it as a strong contender with the potential to rival Ethereum. Solana is one of the key competitors to Aptos.
Sui: The dev team behind Sui (Mysten Labs) was founded by key executives from Meta’s Novi Research and lead architects of the Diem blockchain and Move programming language. Besides, it is backed up by a strong lineup of VCs such as a16z, FTX Ventures, and Jump Crypto. Sui aims to build a high-performance and low-latency blockchain. Sui and Aptos share great similarities in many regards. For example, both Aptos and Sui utilize Move, a Rust-based programming language, for parallel execution. Therefore, Sui is the most direct competitor to Aptos.
In Table 5–1, we will compare these blockchains from different perspectives (e.g., team, funding, consensus, network performance, node distribution, ecosystem, and FDV).
Table 5–1 Competitor Comparison
From a team & funding perspective, despite the significant technological innovations and potential of next-gen blockchains like Aptos and Sui, Ethereum and Solana have substantial advantages as early pioneers in the blockchain space.
Ethereum currently underperforms Solana, Aptos, and Sui in terms of network performance, which has been a persistent and acute issue in recent years. However, through the development of its Layer 2 solutions and sharding designs, Ethereum has gradually been able to meet the demands of some projects. Yet, it still falls far short of meeting the needs of dApps that need to process a large number of transactions with low latency. When comparing Solana with Sui and Aptos, there is no clear performance advantage among them. However, Aptos currently outshines in terms of the stability of processing many transactions in parallel, which will contribute to the growth of its ecosystem projects.
From the perspective of node distribution, after transitioning to a PoS consensus mechanism, Ethereum has seen a surge in the number of validators, with over 1M validators currently in operation, making Ethereum the most decentralized L1 blockchain. In contrast, the number of validators in Solana has significantly dropped. Moreover, the performance of leaders greatly determines whether the consensus can be successfully reached in the network, meaning that if a leader is attacked or goes offline, it could potentially compromise the security of the entire network. Both Aptos and Sui are still in the early stages of development, with a high threshold for onboarding validators, which introduces certain centralization risks.
From the perspective of the ecosystem landscape, Ethereum and Solana are leading the trends in liquid staking infrastructure and user-oriented dApp ecosystems, respectively. Aptos and Sui, in comparison, still lag significantly behind the former two in terms of ecosystem prosperity. However, when comparing Aptos and Sui, Aptos holds a certain advantage and is now focused on building infrastructure, showing potential for significant growth in the future.
In terms of FDV, when comparing Aptos and Sui, we believe that the FDV of Aptos may be somewhat undervalued. As the Aptos ecosystem continues to grow and if it can incubate projects that capture significant market attention and create hype, Aptos has significant potential for growth in the future.
Summary:
From the perspective of the sector, the public blockchain sector where Aptos runs has gone through several bull and bear runs, as well as the evolution of blockchain technology. The demand and understanding for public blockchains have become increasingly clear. It is evident that the consensus algorithm and performance of a public blockchain are the roots that allow its ecosystem to thrive. The prosperity of the ecosystem is the fruit that grows from these roots. To be qualified as an outstanding public blockchain, the underlying technology must be robust enough to yield good results, and at the same time, these results must be remarkable enough to gain market recognition. Currently, Aptos has laid a solid foundation for cultivating a thriving ecosystem with its well-designed technical architecture, and it has nourished the seeds through its well-designed tokenomics model and ecosystem growth plans. It now waits for the subsequent growth of ecosystem projects to produce impressive results. From a competitive landscape perspective, Ethereum and Solana are still in the top tier. Aptos, along with Sui, are orders of magnitude behind them in many respects (except for network performance). Aptos and Sui were both founded by former Meta employees and developed using the same programming language (Move), with comparable network performance. However, the two blockchains have different focuses in ecosystem development, which has caused some divergence in market perception. We believe that as Aptos continues to nurture its ecosystem and as more ecosystem projects gain traction, Aptos is expected to gain more significant growth.
6. Risks
1) Competition Risk: Aptos, Sui, and Linera, which are blockchains developed by former Meta employees, share great similarities in terms of the team, technology, and investors. Therefore, the competition among them is fairly intense.
2) Centralization Risk: According to the Aptos whitepaper and its blog posts, it is designed with scalability, safety, reliability, and upgradeability, without specifically mentioning decentralization. Therefore, it implies that Aptos has chosen to prioritize scalability and performance at the expense of decentralization.
3) Steep Learning Curve: The Move language is a new smart contract programming language, requiring developers to invest time and resources in learning. Moreover, deploying and migrating protocols to Aptos also entails time and cost.
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- Investment Risks and Disclaimers -
This report is only for information purposes and should not be relied upon when making any investment decision. Please do not make any investment decisions based on this report. First.VIP and authors of this report are not responsible for any results of your investment.
This report is drafted from the date indicated. As market or economic conditions may change from time to time, the content of this report may not necessarily reflect such changes. The graphs, charts, and other visual aids are provided for information purposes solely, none of which should be relied upon as investment decisions. First.VIP will not assist anyone in making investment decisions and no graph, chart, or other visual aid can capture all of the factors and variables required to make such decisions.
Some of the statements in this report may contain First.VIP’s future assumptions and other forward-looking views. With known & unknown risks and uncertainties, actual results, performance, or events may differ materially from the views and assumptions expressed in the statements.
Any speculations, forecasts, and estimates contained in this report are speculative and are based on certain assumptions. These forward-looking statements may prove to be inaccurate and may be affected by inaccurate assumptions, known/unknown risks, uncertainties, and other factors, most of which are beyond our control. It can be anticipated that some or all of these forward-looking assumptions will not be realized or will differ materially from actual results.
References
Aptos Documentation, https://aptos.dev/en
Aptos Whitepaper, https://aptos.dev/assets/files/Aptos-Whitepaper-47099b4b907b432f81fc0effd34f3b6a.pdf
Project Analysis — Aptos, First.VIP
Aptos Medium, https://aptoslabs.medium.com/
[1] https://www.coingecko.com/en/coins/aptos, data as of November 12, 2024
[2] https://aptoslabs.com/team
[3] Figures 2–1 and 2–2 were captured from https://cauldron.io/.
[4] https://www.diem.com/en-us/blog/why-build-move/
[5]https://medium.com/aptoslabs/block-stm-how-we-execute-over-160k-transactions-per-second-on-the-aptos-blockchain-3b003657e4ba
[6] https://aptos.dev/en/network/blockchain/node-networks-sync
[7] https://dune.com/aptos/aptos-chain-metrics-overview
[8] https://aptosfoundation.org/ecosystem/projects
[9] https://aptosfoundation.org/ecosystem/projects
[10] https://aptosfoundation.org/currents/aptos-tokenomics-overview
[11] Figures 4–2, 4–3, and 4–4 were captured from https://explorer.aptoslabs.com/validators?network=mainnet.
[12] https://governance.aptosfoundation.org/
[13] CoinGecko, data as of November 12, 2024, 3:00 p.m.
