Aptos (APT) has been in the spotlight of the cryptocurrency community recently, tripling its market capitalization in just one month. Initially overlooked due to the perception that it was a venture-backed project, Aptos is now receiving renewed attention from the cryptocurrency community. Aptos is being promoted as a Solana competitor, a potential Ethereum disruptor, and a new layer 1 (L1) blockchain suitable for DeFi applications. In today’s article, we’ll take a deeper look at Aptos, exploring its capabilities, features, and efficiency compared to established players like Solana and Ethereum.
What is Aptos?
Aptos is a Layer-1 blockchain network recently launched by Aptos Labs, a team composed of former employees of Meta’s crypto division Diem. This new blockchain aims to solve key issues of scalability, security, and reliability, making it a versatile platform for decentralized applications (dApps) and non-fungible tokens (NFTs). Aptos stands out with its innovative approach to blockchain technology, emphasizing security, scalability and decentralization.
The foundation of Aptos is its white paper, which highlights the development of the blockchain over the past three years by a global team of more than 350 developers. This extensive collaborative effort has resulted in significant advances in consensus mechanisms, smart contract design, system security, and performance. Aptos uses the Move programming language originally developed for Diem, which is known for its security and reliability.
The founding team of Aptos
Aptos Labs was co-founded by former Meta employees, CEO Mo Shaikh and CTO Avery Ching, to redefine the Web3 experience. They focus on developing dApps on the Aptos blockchain, bringing the benefits of decentralized technology to a wider audience. The plan will be officially launched on October 12, 2022. The mainnet will be launched five days later, and Aptos Autumn will be released. In just four months, Aptos had a market capitalization of $2.9 billion. The project, considered a spiritual successor to the failed Meta stablecoin initiative Diem, has attracted significant interest from the crypto community.
Financing and market performance of Aptos
Aptos has successfully raised more than $350 million across two rounds of funding, including a $200 million seed round and a $150 million Series A round led by FTX Ventures. The funding highlights the strong confidence in Aptos’ potential to make blockchain more trustworthy, scalable and cost-effective, making it a promising player in the blockchain and cryptocurrency space.
How does Aptos work?
Aptos is a layer 1 blockchain network that stands out in the crypto world with its groundbreaking approach to transaction processing, scalability, and security. At the core of its innovation are three key components: Move programming language, parallel transaction processing system and Block-STM technology.
Move programming language
Originally developed for Meta's Diem project, the Move programming language is a Rust-based language designed for security and flexibility in smart contract development. It is an executable bytecode language with a secure global storage system that enhances the security of the Aptos blockchain by allowing users to define custom resources that are not subject to duplication or deletion.
parallel transaction processing system
When it comes to transaction processing, Aptos differentiates itself by using a parallel approach, as opposed to the sequential execution model used by major blockchains such as Bitcoin and Ethereum. This model enables the network to utilize all available resources to process multiple transactions simultaneously, significantly increasing throughput and speed. Aptos' engine is designed for efficient smart contract processing, leveraging Block-STM technology for parallel execution to ensure that a single failed transaction does not destroy the entire chain. This collaborative scheduler efficiently prioritizes transactions and manages validation, and can process up to 160,000 transactions simultaneously.
Byzantine Fault Tolerance (BFT) Consensus Protocol
Aptos also uses a Byzantine Fault Tolerance (BFT) consensus protocol to decouple transaction ordering from processing, reducing latency and increasing speed. The BFT engine analyzes each state on the chain and automatically updates validators to ensure accuracy and reliability. While Aptos has demonstrated impressive capabilities on its testnet, achieving up to 10,000 transactions per second and targeting 100,000 TPS, it is important to treat these claims with caution as they have not yet been tested under real-world network demand and congestion conditions confirmed.
Nonetheless, with its innovative technology, Aptos is expected to redefine the blockchain landscape, providing a scalable, secure, and efficient platform for a variety of decentralized applications.
Aptos Blockchain Token Economics
APT, the native token of the Aptos blockchain, has experienced a roller coaster ride since its inception. APT initially traded at $4.76, half of its all-time high of $10.05 in October 2022, and has now stabilized around $4. Despite being a young project, the foundations have been years in the making, so it's premature to speculate on future prices.
Aptos faced controversy when it launched the blockchain and APT token on October 17 without revealing the total supply, distribution or issuance rate. This resulted in a 40% price drop during the initial trading hours. In an effort to control damage, Aptos revealed its token economics, but the move sparked further outrage. The community was disappointed to find that the majority of tokens were allocated to early investors, Aptos Labs, and the Aptos Foundation, rather than being distributed more broadly.
The current circulating supply of APT is 130 million, and the total circulation is 1,000,935,772, with no upper limit. Inflation started at 7% and declined by 1.5% per year, eventually reaching 3.25%. Transaction fees are burned, but this may change through a governance vote. The Aptos ecosystem’s token pool is dedicated to grants, incentives, and community development programs. Of these, 410,217,359.767 tokens belong to the Aptos Foundation and 100,000,000 belong to Aptos Labs, to be distributed over ten years. Investors and core contributors face a four-year lock-in after the launch of the mainnet, and the unlocking schedule is staggered.
Despite the initial challenges, over 82% of APT tokens are staked across various categories, with the majority locked according to the distribution schedule and not yet available for release. Staking rewards are divided between validators and stakers, starting at a maximum of 7% per year and decreasing to 3.25% over 50 years. These rewards, along with transaction fee consumption and potential governance changes, will all impact the total supply of the Aptos network, highlighting the evolving nature of the APT token economy.
Is Aptos the next Ethereum?
The layer 1 (L1) blockchain market is highly competitive, with major players such as Ethereum, Solana, and AVAX claiming to offer breakthrough solutions to issues such as scalability. However, no L1 blockchain is perfect, including Ethereum, which struggles with slow transaction speeds during periods of high network traffic. Aptos is often promoted as a potential “Ethereum killer,” a common term in the L1 space that suggests it could increase Web3 efficiency for investors.
Although Aptos has introduced innovative features, its ability to deliver on its promises remains to be seen. However, its potential to stand out in the L1 market is clear. The key area where Aptos stands out is its transaction throughput, outperforming Ethereum by confirming transactions within seconds compared to Ethereum’s longer processing time. Aptos also has higher CPU core usage than Ethereum. The real test for Aptos will be maintaining its performance under high network demand. Ethereum, despite its slower performance, is known for its reliability and consistent performance.
In many ways, Aptos is seen more as a competitor to Solana in the crypto community. Both blockchains provide a lightweight framework that supports fast and cost-effective transactions, achieving considerable speed through parallel transaction processing. The main difference is their reliability. Solana has faced multiple outages and outages, while Aptos, despite its shorter track record, has yet to experience similarly large-scale issues, suggesting its underlying technology may lead to a more stable user experience.
Conclusion: Aptos, as an emerging blockchain project, is rising rapidly with its innovative technology and strong team background. Although it has not yet fully proven its capabilities under real-world network demands, its potential and market performance have attracted widespread attention. It remains to be seen whether Aptos can truly become a competitor to Ethereum or Solana in the future. However, with its unique technical advantages and strong community support, Aptos is certainly a project worth keeping an eye on.