What is Aptos (APT)?

Aptos is a smart contract platform that entered the market in 2022. The history of Aptos goes back to 2017, when Meta (then Facebook) launched its stablecoin project. Technology is Aptos’s biggest selling point.

One of Aptos’s special features is the Move programming language. The native token of Aptos is APT. Like its competitors, Aptos uses the Proof of Stake consensus algorithm. Aptos is undoubtedly the most talked about and hyped newcomer and an interesting investment.

What is Aptos (APT)?

Aptos is a smart contract platform that entered the market in 2022. Its competitors include Ethereum, Solana, Cardano, and similar platforms.

Aptos has its roots in Meta. Meta (Facebook) launched a stablecoin project called Libra in 2018, which became Diem after rebranding. Aptos uses the technology developed in this project, and its founding members are also former Meta employees.

Aptos’s native token is APT. Its purpose is similar to that of the native tokens of other smart contract platforms. The APT token is used to pay for transactions on the Aptos blockchain and for staking. In the future, token holders can also participate in the project’s decision-making.

Below is basic information about Aptos:

Check the up-to-date price of the APT token here: Aptos price.

Aptos is a next-generation smart contract platform. Due to its short time on the market, few crypto investors know about the project. The APT token hasn’t been a good investment either, which has limited its popularity significantly.

The Aptos project has its roots in Meta

The history of Aptos goes back to 2017, when Meta (then Facebook) launched its stablecoin project. Many can still remember the cryptocurrency Libra. Libra was Meta’s vision of a stablecoin. It was launched to the general public in 2019. Libra contributed greatly to the brief cryptocurrency boom of 2019. However, this rally quickly fizzled out.

Libra was criticized by US and European regulators immediately after its launch. Many believe this event triggered the development of the current regulation crackdown. Libra’s development caught politicians by surprise.

Meta faced such a backlash that its main partners began to resign. Meta still tried to save the project by rebranding it as Diem but to no avail. Diem died for good in early 2022.

What does all this have to do with Aptos? Mo Shaikh and Avery Ching, former Meta employees, founded the Aptos project in December 2021. Avery Ching was the Principal Software Engineer at Meta and Yahoo, one of the highest positions in software development.

Mo Shaikh’s area was Meta’s strategic partnership. Below is an interview with the man from autumn 2022.

Aptos will be able to build on the research carried out during Libra and Diem. It is also worth noting that some of Meta’s employees set up the Sui blockchain instead of Aptos. Sui and Aptos will likely compete for the same niche in the coming years.

Shaikh and Ching have assembled a team of around 300 people. Aptos Labs, headquartered in California, is responsible for the practical implementation. The project has its roots deep in Silicon Valley.

Despite its short history, Aptos has received significant investments from some of the best-known VC firms in the industry. The project raised $200 million in March 2022 and a further $150 million in July, led by FTX Ventures. Impressive sums for a project that didn’t even have a white paper published then.

Aptos TestNet was launched in March 2022 and quickly gained as many as 20,000 nodes as testers. The next version, Incentivized TestNet, was released in May 2022. More than 30,000 applications were received for the role of 100 validators.

In mid-October (2022), a significant milestone was reached when the MainNet launched.

Mainnet has arrived.https://t.co/wZajVZMa5Q

— Aptos (@Aptos) October 17, 2022

The production version of Aptos’ MainNet was released on October 17th. However, many technical solutions have yet to be implemented. Two days later, the APT token became available for trading on major exchanges.

The technology of Aptos

Technology is Aptos’s biggest selling point. Its blockchain can process 160,000 transactions per second—at least, in theory. At this stage, Aptos is nowhere near these figures; only 4,200 TPS has been achieved on TestNet.

Like other smart contract platforms, Aptos uses a Proof of Stake consensus algorithm. Aptos also claims to have solved the blockchain trilemma. Its blockchain is scalable, secure, and decentralized at the same time.

In practice, Aptos had to sacrifice decentralization to achieve such scalability. Many other smart platforms have also had to resort to the same solution, even if they are decentralized in PowerPoint presentations.

PoS alone does not give Aptos any advantage. Parallel execution and a modular structure make its massive transactional capacity possible. Aptos can also batch transactions and separate certain operations from consensus building.

One of the key innovations of the Aptos blockchain is to decouple non-agreement related tasks out of the consensus phase, such as transaction dissemination, transaction execution and storage, and ledger certification.

The above quote is from the FTX Investor Report. The Aptos white paper provides more information.

The technology described above enables lightning-fast transactions with very low latency. Aptos blocks are formed in less than a second. Therefore, it can challenge all the fastest and most scalable blockchains on the market.

Update 5/26/2024: Aptos has broken a new record in transaction capacity. Its blockchain processed as many as 115 million transactions in one day and, at its best, 32,000 transactions per second. More than 99.5 percent of transactions were completed.

Move programming language and a dedicated processor

One of Aptos’s special features is the Move programming language. Move is based on the Rust programming language used by the well-known smart platforms Near Protocol and Solana. This is also where we return to Aptos’s history. Move was originally developed for Diem.

Aptos also built a new virtual machine (processor) for smart contracts. The word EVM is probably familiar to anyone who has read our guides. It is the world’s most famous smart contracts processor, the Ethereum Virtual Machine.

Many of Ethereum’s competitors have deliberately created an EVM-compatible blockchain. This allows easy cloning (transfer) of Ethereum applications, which can attract Ethereum developers and apps to their ecosystem.

However, some platforms have chosen a different path, and Aptos is one of them. This path also requires the development of a dedicated smart contract processor. It is a very rare solution. Almost all competing options are either EVM-compatible or based on EVM in one way or another.

The video below compares the Move programming language to the Solidity programming language used by Ethereum.

Move is one example of the research and development work carried out during Libra & Diem, which Aptos uses. Meta gave its crypto project virtually unlimited resources, so it is no wonder that technological innovations emerged.

Move is also a very developer-friendly programming language – unlike Rust. This is one of the weapons Aptos is using to challenge Solana. Since Move is based on the Rust programming language, it is easy for Aptos to attract Solana devotees to its ecosystem. The threshold to learn Move is low.

In the Aptos programming environment, smart contracts are called modules.

The APT token

The native token of Aptos is APT. It entered the market in October 2020 after the release of MainNet. The APT token is used to pay for transactions on the Aptos blockchain. The network validators also stake it because Aptos is a Proof of Stake blockchain. The APT token allocation was as follows:

• 51.02% to the community
• 19.00% to core developers
• 16.50% to Aptos Foundation
• 13.48% to investors

In practice, the tokens reserved for the community are also held by the Aptos Foundation and Aptos Labs, who decide on their distribution for development work in the coming years.

One billion APT tokens were created in connection with the MainNet launch. The picture below shows the release of tokens to the market, i.e., the unlocking schedule.

APT tokens will be released in significant quantities at the beginning of 2024. It is also good to consider how the amount of staking fees, i.e., inflation, grows over time. This increases the number of tokens in circulation. Inflation will decrease by 1.5% annually until it reaches a floor of 3.25%.

APT token and staking

Like its competitors, Aptos uses the Proof of Stake consensus algorithm. This means that validators, instead of miners, maintain blockchain data. Separate nodes on the network store the Aptos blockchain.

At the time of its launch, the Aptos MainNet had 102 validators. However, it is difficult to say how many entities are responsible for maintenance and how many validators are not under Aptos’s control. The picture below is from the Aptos white paper.

The initial staking reward for Aptos is 7%, which also means the annual inflation rate. The inflation rate will decrease to 3.25% over the years. Transaction fees are also burned.

The APT token has two important uses: paying transaction fees and staking. In this respect, it is no different from its competitors. Native tokens from other platforms also play a similar role. Over time, governance will likely play a greater role for token holders.

Creating your tokens on the Aptos platforms is possible. Aptos’s special feature is that the creator of the tokens (called coins in the Aptos ecosystem) retains control over them and can, for example, freeze them at will. This feature has probably been added to make Aptos more regulator-friendly.

Aptos as an investment

Aptos is undoubtedly the most talked about and hyped newcomer and an interesting investment. After the MainNet launch, the APT token grew into a market cap of over a billion dollars. Does Aptos have potential as an investment, or is the project all about hype??

The strengths of Aptos are clear. It is undoubtedly an advanced smart contract platform. Aptos is theoretically the most scalable solution on the market. It does not even talk about blockchain infrastructure but wants to create a “monster” capable of running a global ecosystem.

The largest VC firms in the industry back the project as well. The pattern is very similar to Solana. Anyone can see the SOL token’s price development between 2020 and 2021.

On the negative side, the project looks secretive and has communicated poorly. Even the tokenomics document was not released until a few minutes before the start of the trading. A lot of other essential information is still missing. Why?

Investors should remember that the market will be flooded with coins from the beginning of 2024. Until then, large investors cannot dump their holdings into the market, even if they want to. This does not apply to tokens earned from staking rewards.

Aptos also has deep roots in California’s Silicon Valley, the so-called “big tech” sanctuary. Founded by people with a Meta background, Aptos collaborates with Google and others, and many question how decentralized the Aptos platform is. The project is the complete opposite of Bitcoin, for example.