About Aptos (APT): is the Move-powered L1 still a Solana killer?

Since witnessing the rise of Solana throughout the 2021 bull market, we've had numerous other layer-1 blockchain projects emerge with big claims about transformative blockchain technology. One such layer-1 blockchain is Aptos — the project backed by ex-Meta engineers who were in charge of the now-defunct Libra and Diem project.

With its unique premise of being powered by the Move programming language and a targeted transactions per second (TPS) of 160,000, expectations for Aptos were high. Since launching its mainnet in late 2022, Aptos has witnessed the rise and fall associated with the ebb-and-flow cycle of the crypto market.

Does Aptos still have the potential to fulfill its reputation as a Solana killer? From knowing how Aptos works to breaking down its APT tokenomics, here's everything you need to know about the layer-1 blockchain.

What is Aptos?

Aptos is a layer-1 blockchain that's risen from the ashes of the former Diem project and aims to address Ethereum's limitations by being scalable, safe, reliable, and upgradable.

Armed with its Byzantine Fault Tolerant (BFT) consensus mechanism, Move language integration, and parallel execution, Aptos aims to bring mainstream adoption to Web3 by making scalability a key area of improvement.

With its future target of processing 160,000 transactions per second (TPS), Aptos is also working to surpass Ethereum's current capacity and use this high throughput to empower an ecosystem of decentralized applications (DApps) to solve real-world user problems.

What is Aptos Labs?

Aptos Labs is headed by Mo Shaik and Avery Ching — both former Meta engineers. Initially developed as part of Meta's Diem project, Aptos was spun off as an independent entity in 2021. Since then, it's garnered significant support from venture capitalists and raised close to $350 million in funding. With a team of over 100 engineers, Aptos Labs has assembled a formidable force of blockchain experts dedicated to pushing the boundaries of innovation. It's this same dedication towards blockchain innovation that led to Aptos' inclusion of features like parallel transaction processing and use of the Move programming language.

What makes Aptos special?

Aptos sets itself apart from its competitors through a combination of the following groundbreaking features:

Block serializability with scalable transaction mechanisms (Block-STM)

Of the various innovations Aptos introduces, Block-STM, is one of the most novel, because it fixes a pain point blockchains face when dealing with concurrency control. To fully understand Block-STM's usefulness in the blockchain space, it's important to grasp the current issues with STM systems.

In short, the performance of STM systems is often bogged down by the need to guarantee transaction orderliness. With Block-STM, Aptos uses a pre-determined transaction order to dynamically detect existing dependencies and avoid conflicts during speculative transaction execution. This dynamic dependency estimation makes sure that transactions are processed in a consistent and orderly manner, even when the overall network is under heavy load.

Parallel transaction processing

Building on the point above, Block-STM is one of the key techniques that's contributed to enabling parallel transaction processing within the Aptos blockchain. Block-STM works in tandem with a multi-threaded runtime environment and an efficient validation mechanism to help Aptos achieve parallel execution. Since execution isn't serialized, transactions can occur speculatively without the need to wait for consensus. This greatly improves throughput, reduces latency, and lowers overhead resource consumption.

Also, thanks to parallel transaction processing, Aptos can process arbitrarily complex transactions without breaking transaction atomicity. It's this maintaining of transaction atomicity that contributes to greater data security for transactions within the Aptos blockchain since data loss and corruption is avoided.

Aptos' byzantine fault tolerance (BFT) protocol

If you've glanced through white papers before, you've likely come across the BFT term and how its inclusion leads to greater network security and reliability, since a BFT system can continue operating even if some of its nodes fail or act maliciously. In the case of Aptos, AptosBFT is based on the Jolteon proposal and makes use of a round-by-round consensus and chaining mechanism. These unique additions ultimately reduce Aptos' network latency and load by 33%, allowing for higher overall throughput.

Move language

One of the key differences between Aptos and other layer-1 blockchains is Aptos' use of the Move programming language. While other layer-1 blockchains are making use of Solidity and Rust, Aptos has opted for Move because it aligns with Aptos’ vision of creating an inclusive financial infrastructure. Compared to other programming languages, Move can define custom resource types, making sure resources can only be moved between program storage locations and aren't produced without appropriate credentials. In doing so, Aptos guarantees there'll no longer be issues with double-spending and resources disappearing.

One more benefit of Move that's worth mentioning is that its Move modules enforce data abstraction while smart contracts don't. This means resources are transparent within their respective declaration modules but appear opaque outside of Move modules. By isolating and limiting access to sensitive data, potential vulnerabilities become more difficult to exploit, reducing the attack surface and protecting the integrity of the blockchain.

Overall, because of Move, Aptos benefits greatly since network security is tightened and network vulnerabilities are mitigated before they have the chance to appear.

Modular architecture

Similar to blockchain solutions like Celestia and Venom, Aptos also embraces modularity by opting to go with a modular architecture that divides the blockchain into distinct and independent modules. This ultimately opens up possibilities for greater flexibility, customization, and innovation within the Aptos ecosystem. Examples of Aptos' modularity include letting developers build and integrate new features and components without disrupting the core protocol. Tailored customization of the blockchain is also possible to suit specific use cases and industry requirements.

Aptos ecosystem

With $64.5 million of Total Value Locked (TVL) in its ecosystem at the time of writing, the Aptos DeFi scene shows promise despite only being around for a year. With its emphasis on scalability and security, Aptos offers fertile ground for developing various types of DApps. Here are some of the top DApps that pack some of the highest TVL on Aptos in each category:

  • Thala: A Move language-powered DeFi protocol that allows for borrowing of Move Dollar (MOD), an over-collateralized stablecoin on the Aptos blockchain. The DeFi protocol also allows for capital-efficient liquidity provisioning via a rebalancing automated market maker.

  • LiquidSwap: The first AMM on Aptos that allows users to seamlessly trade tokens with low fees and low slippage.

  • Amnis Finance: Aptos' liquid staking protocol that empowers users to effortlessly maximize returns on their APT tokens while unlocking their liquidity.

  • Aries Markets: A decentralized margin trading protocol on Aptos which allows users to borrow, lend, swap, and trade with margin via an on-chain order book with lightning speed.

Why is Aptos considered a Solana killer?

The immediate comparison Aptos drew the moment it was announced was that it would be this crypto cycle's Solana killer given that both were considered venture capital darlings and enjoyed millions in funding.

Additionally, both blockchains had striking similarities. Aptos and Solana each boast high transaction throughput, low latency, and a focus on smart contract development. This is unsurprising given how early scalability limitations that plagued monolithic blockchain networks like Ethereum played a big part in influencing key Solana and Aptos decisions.

To give further context, here's why Aptos was pegged as a potential Solana killer:

  • Move vs Rust: Aptos introduced the Move programming language, specifically designed for blockchain development. Move's resource-oriented approach and strong security features were seen as an advantage over Solana's Rust programming language.

  • Block-STM performance: Aptos' Block-STM concurrency control mechanism enabled parallel transaction execution while maintaining transaction ordering, a significant improvement over the speed that Solana claimed to have thanks to its proof-of-history (PoH) consensus mechanism.

  • Modular architecture: Aptos' modular architecture facilitated customization and innovation, allowing for the development of specialized modules to address specific use cases. This adaptability was seen as a potential advantage over Solana's monolithic architecture.

Is Aptos still a Solana killer today?

Aptos Solana TVL visual

Source: defillama.com

By referring to the DefiLlama chart above, we can see that Aptos lags behind in terms of TVL. This may have been because Aptos launched its mainnet during a bear market cycle and faced setbacks when building mainstream adoption among crypto natives. Nevertheless, the comparison between Aptos and Solana sparked intense discussions within the blockchain community, with proponents of each platform highlighting their respective strengths.

In Aptos' case, a year is certainly too little time to fairly judge if Aptos can fill these shoes by overtaking Solana in terms of popularity. While both blockchains demonstrated impressive performance, the ultimate success of either depends on their ability to attract developers and build a thriving ecosystem of DApps.

APT tokenomics

With an initial total supply of 1 billion APT tokens, Aptos has opted for the following initial distribution of its native token:

  • 51.02% was allocated to the Aptos community.

  • 19.00% was allocated to core contributors.

  • 16.50% was allocated to the Aptos Foundation.

  • 13.48% was allocated to investors.

When it comes to utility for Aptos' native tokens, APT can be used for staking to earn rewards over time, to pay gas fees, and to participate in governance decisions via voting.

APT inflation

If you're intending to trade APT, you may want to note that APT tokens have a maximum inflation rate of 7% per year. The actual inflation rate will be determined by the network's validators, who'll vote on how much APT to mint each epoch. The inflation rate is expected to decrease over time, and may eventually reach a low of 3.25%. While critics may suggest this reward rate is on the high side, the Aptos Foundation claims it's designed to help incentivize validators to participate in the network and to help fund the development of the Aptos ecosystem.

Aptos roadmap: the future of Aptos

Aptos Labs has an ambitious roadmap for the future of the Aptos blockchain, as explored below.

Enhancing scalability

Despite having a trajectory of 160,000 TPS, Aptos currently still falls short with its current peak throughput of 5,862. The team aims to further enhance the blockchain's scalability by optimizing its consensus mechanism and implementing sharding, a technique that partitions the network into smaller, more manageable segments. This will enable Aptos to handle a significantly higher volume of transactions without compromising performance.

Strengthening security

Security remains a top priority for the Aptos team. They're continuously evaluating and refining their security protocols to address potential vulnerabilities and stay ahead of evolving cyber threats. Additionally, they are exploring the integration of advanced cryptographic techniques to further bolster the network's defenses.

Governance Enhancements

The team is committed to fostering a decentralized and community-driven governance model. They are exploring mechanisms to empower APT token holders to participate more actively in governance decisions, shaping the future direction of the platform.

Cross-chain interoperability

Aptos is exploring ways to seamlessly connect with other blockchains, enabling users to transfer assets and data between different networks. This interoperability will expand the reach of Aptos and facilitate the exchange of value across various blockchain ecosystems.

More partnerships and collaborations

Like its partnership with Microsoft and Alphabet, Aptos is looking to announce more collaborations that are beneficial towards onboarding more developers and improving the overall Aptos network.

Is Aptos worth trading?

While Aptos brings many advanced features and has captured the attention of many in the crypto community, it's essential to approach the project with a balanced perspective to consider both bullish and bearish perspectives and catalysts.

Bullish Aptos catalysts

  • Aptos achieving its targeted TPS of 160,000.

  • An increase in mainstream adoption from its current active wallet population of 7.3 million.

  • Bitcoin spot ETF approval that causes an influx in layer-1 and altcoin interest.

  • Partnerships with other major organizations that improve the legitimacy of Aptos as a layer-1 blockchain.

Bearish Aptos catalysts:

  • APT token unlocks that happen on the twelfth of every month. This could result in millions of APT being unlocked and dumped onto the market.

  • A lack of ecosystem and DApp development since Aptos uses Move instead of Ethereum-friendly languages like Solidity.

  • A crypto market downturn caused by shaky macroeconomics.

  • Increased competition from other layer-1 platforms.

Final words and next steps

While Aptos' high throughput, innovative features, and growing ecosystem make it an attractive prospect, its newcomer status, limited ecosystem adoption, and potential monthly token dumps warrant cautious consideration.

As Aptos continues to refine its rough edges and attract more developers, its impact on the blockchain landscape has been notable considering it's the new layer-1 on the block. Overall, Aptos' commitment to innovation, scalability, and security positions it well for long-term success, making it a noteworthy contender in the ever-evolving world of blockchain technology and layer-1 platforms.

FAQs

How does Aptos compare to other layer-1 blockchains like Solana and Avalanche?

Aptos, Solana, and Avalanche are all layer-1 blockchains that aim to address Ethereum's scalability limitations. Of the various blockchain properties, Aptos stands out for its high throughput, enhanced security, experienced ex-Diem team, and use of the Move programming language.

What are some potential use cases for the Aptos blockchain?

Aptos is a versatile blockchain with a wide range of potential use cases thanks to its low latency and high throughput. This includes NFT support, DeFi, GameFi, and more.

How can I buy or trade Aptos (APT) tokens?

APT token pairs are listed on several cryptocurrency exchanges. This includes the APT/USDT spot pair on OKX.

Who is behind Aptos?

Aptos is being developed by Aptos Labs, a team of experienced engineers and researchers. The project is open-source, and the community is actively involved in its development.

What is the future outlook for Aptos?

Aptos has the potential to become a major player in the blockchain landscape. Its high throughput, robust security, and innovative features could make it a compelling choice for developers and users alike. However, the project's success will depend on its ability to overcome the potential challenges outlined in the article above and gain widespread adoption.

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