Aptos (APT)

Aptos is a L1 blockchain built with Move, by the old Diem team

Basics

• Based in:
• Started in / Announced on: 24-2-2022 announced but started 'in the past few months' before it but also mentions having worked on their BFT engine for 3 years already. This is due to the team having worked on Diem before.
• Testnet release: 15-3-2022devnet; "Later in Q2, there will be an incentivized testnet to help scale the network and stress test it as it marches toward mainnet."
• Mainnet release: "We expect Mainnet to occur in Q3 2022" (15-3-2022) Update: got launched on 17-10-2022.

History

• Team comes from Diem, but moved on to build Aptos after government issues arose. From Decrypt (9-2-2023):

"One of the big drivers behind Aptos’s recent momentum has been the Move programming language, which was originally developed at Meta (formerly Facebook) for its Diem blockchain. When the project wound down it left Shaikh and co-founder Avery Ching, who had worked on Diem’s Novi wallet, free to start their own project."

• When the platform launched it was plagued with criticism over its tokenomics, TPS performance, validator set and permissionedness. The token sank quickly on the day of launch.

Audits & Exploits

• Bug bounty program can be found [insert here].

Bugs/Exploits

• Data from Aptos block explorer Aptos showed that on-chain transactions stopped for about five hours on October 18. Two days later the Foundation claimed to have solved the issue. The root cause was identified as non-deterministic code in the FeeStatement module.
• Aptos patched an integer overflow vulnerability in Movevm thanks to a responsible disclosure by Numen Cyber Labs (2-12-2022).
• Aptos fixed a DoS vulnerability in its Move VM nodes thanks to a responsible disclosure by Numen Cyber Labs (29-10-2022).

Governance

Aptos Governance

• From Figment (23-9-2022):

"The currently implemented (likely subject to be improved over time) Aptos on-chain governance process allows community members to create and vote on proposals minimizing the cost of protocol upgrades. Users can vote on on-chain proposals via the Aptos Governance module. An early expiration threshold has been implemented and set to 50% of the total supply of Aptos Coins. This allows for swift implementation of emergency bug fixes without waiting for the full voting period. To propose or vote on a proposal you must stake but you are not required to run a validator node. In order to submit a proposal the proposer’s staking pool must have the minimum required prosper stake and must be locked for the voting period. The scope of governance proposals covers the following:

1. Changes to the protocol parameters (Epoch duration, minimum and maximum stake requirements, etc.)
2. Changes to core protocol code
3. Upgrades to fix bugs and adding functionality
4. Deployment of new framework modules."

Token

Token Allocation

• From a commissioned Messari report (18-2-2024):

"Another 7.5% is set to unlock in Q1’24, with 48% of this unlocking to core contributors and 34% to private investors. Based on APT’s price at the end of Q3, $574 million will unlock toward those two categories, representing 20% of Q4’s circulating supply. FTX Ventures participated in Aptos Labs’ first fundraising round and co-led its second.

There will also be $91 million unlocking toward the Ecosystem category, although these tokens will not necessarily be immediately distributed upon becoming liquid. Note that before distribution, 80% of these tokens are held by the Foundation and 20% by Aptos Labs. These tokens are used for grants, incentives, and other initiatives. So far, just over 20 million APT from this allocation has been airdropped."

• From Decrypt, after the Aptos team announced it would provide more clarity around it's tokenomics (without actually clarifying anything), this was know at the time (9-2-2023):

"As it stands now, APT has a total supply of 1 billion tokens. Of those, 51% has been earmarked for community initiatives, like grants for developers and incentives to bring more users onto the network. Another 16.5% was designated for the Aptos Foundation itself.

That amounts to 675 million tokens for those two categories. Of that, 130 million were immediately available when the Aptos network launched in October—125 million for community efforts and 5 million APT for the foundation. The rest is scheduled to unlock on a monthly basis over the next 10 years.

The remaining APT tokens were split among core contributors, who received 19% of the APT supply, and investors, who received 13.48%. That’s the remaining 355 million APT tokens. Both of those groups are subject to a 4-year lock up period, during which they can’t sell their tokens. But they can stake them with validators—the entities whose hardware keeps the network running—and earn interest."

• From The Milk Road (20-10-2022):

"51% of tokens were supposed to go to the “community”, but turns out 41% is owned by the Aptos Foundation & 10% is owned by Aptos Lab. I guess community = Aptos Team?"

• Announced $140M Airdrop for Testnet participants (20-10-2022).

Inflation

• According to a Messari report (Q3-2023) it has 7% inflation at that time. It got lowered to 6.9% the next quarter, the first lower number since they started tracking (18-2-2024). APT inflation began at a 7% annualized rate and will decrease by 1.5% each year until it reaches  3.5%.

Utility

Burns

Currently, Aptos burns all revenue generated. At the moment, these burned tokens have not significantly reduced inflation (18-2-2024).

Technology

• Whitepaper or docs can be found [insert here].
• Code can be viewed here. From Decrypt (9-2-2023):

"As of December, Aptos had 248 total developers contributing to open-source projects in its ecosystem."

• Consensus mechanism: AptosBFTv4
• Algorithm:
• Virtual Machine:
• Programming language used: Move

Transaction Details

• Capacity (TPS): "we achieve over 130k transactions per second with only 32 cores in our execution only benchmark." (15-3-2022). Later had a blog post titled "the path to 100k+ TPS (13-7-2022). Figment promoted an higher number: "Aptos’ experiments in an execution-only environment have already hit over 170,000 transactions per second" (23-9-2022). When Aptos launched, it got criticized for having 4 TPS instead (18-10-2022). "It’s worth noting that as of Oct. 19, TPS has climbed to around 24, according to Aptos’ block explorer", as per The Defiant.
• In a mainnet-like testing environment, Aptos achieved a peak of 30,000 TPS and over 2 billion transactions in a day (16-2-2024).
• Latency:

How it works

• From a commissioned Messari report (18-2-2024):

"Aptos’ technological stack features many novel aspects, including the AptosBFTv4 consensus mechanism, the Quorum Store mempool protocol, the Block-STM parallel execution engine, and the programming language Aptos Move. Aptos Move is being co-developed by multiple protocols."

• From a developer who worked on Aptos but abandoned it (18-10-2022):

"Essentially Aptos is a permissioned chain using proof of stake for economics rather than security. More specifically, validators can be fired mid-epoch by stake-pool owners with 1 tx. No need to unstake or wait. I.e., there are a couple dozen private keys (or less) that can halt the network (1/3rd of stake) or take over the network (2/3rd of stake) with a few transactions.

There are no community run / permissionless validators. All 101 validators were hand picked by Aptos Labs / Foundation. You had to sign an arbitration agreement in the Cayman Islands to be included in the validator set. AptosBFTv4 is (as far as I can tell) just DiemBFTv4 renamed. This means it’s using the HotStuff algorithm; meaning network performance degrades quickly if there are a few slow validators. This is another reason Aptos has to closely control its validator set

There is no way to share stake across pools. @TortugaFinance and @Ditto_Finance will have to own their own dedicated stake pools / validators (if they can overcome the 1 million APT min hurdle). This was by design; shared staking was in an Aptos core PR in May but removed.

@shayansanjideh and I built shared stake pools for decentralization, but there has been no real interest in them thus far"

• From this (critical) Twitter thread (13-7-2022):

"How is it safe ser? As discussed on the thread above, Move enables smart contracts interaction with validators to be deterministic, hermetic (state change is predictable; untainted) and metered (protection against DOS attacks). All can be verified by Move Prover. Aptos decouples the codependent execution and consensus layers through a parallel execution engine which synchronize eventually. The parallel execution layer leverages the design of Block-STM's that executes transactions optimistically then detects and manages conflicts before synchronizing and changing the state.

But ser, what about the detected conflicts? They are picked up by at most 1 thread in the parallel execution engine and re-executed based on the execution queue, and re-validated through a queue along with its subsequent txs. Abstractions are separated from trivial executions and validations. This is all possible due to preset orders with indexes that map transactions throughout the execution and validation cycle. Block-STM algorithms handles seamless operations.

With 32 threads working in parallel through the Block-STM design, complemented by its robust state synchronization mechanisms to reduce latency, Aptos would be able to boast up to 100k+ tps with sub-second finality."

• From their blog (15-3-2022):

"Our team has developed a production-grade, low latency Byzantine Fault Tolerant (BFT) engine. We have implemented our fourth iteration of the protocol (the most advanced HotStuff derivative) over the past three years. During that time, we have upgraded the consensus protocol in a private mainnet environment with a diverse set of operators and zero downtime. Our first implementation of the BFT protocol added an active pacemaker that used timeouts to synchronize validators much more quickly than waiting for increasing timeouts. With our latest improvement to the protocol, blocks are committed in as few as two network round-trips, making sub-second finality the common case. Our novel reputation system analyzes the on-chain state and automatically updates leader rotations to adjust for non-responsive validators without any human intervention, making it well suited for decentralized environments. Furthermore, our 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 our consensus protocol has been both audited and formally verified."

Upgrades

• From Messari (23-5-2023):

"On May 28, 2024, Aptos mainnet will upgrade to v1.12, and node operators must upgrade their full nodes before 0:00 UTC to prevent downtime. This upgrade includes several AIPs such as AIP-61 (Keyless Accounts), AIP-63 (Coin to Fungible Asset Migration), AIP-71 (Refactor Aptos Framework Events with Module Events), AIP-79 (Instant On-chain Randomness), and AIP-82 (Transaction Context Extension). The update enables parallel validation of transactions in the Mempool for higher throughput and reduced latency."

• Aptos upgraded to V1.5 in early July and then V1.6 at the end of August. The upgrades brought Quorum Store and a Fungible Assets standard. They also enabled applications to subsidize gas from end users and delegators to participate in onchain governance.

Staking

Considering that Aptos does not have a slashing mechanism, staking for the ~69% of APT’s illiquid genesis supply becomes a very attractive option.

• From Figment (23-9-2022):

"Staking on Aptos is similar to most other Proof of Stake networks with a few different features. Each validator's voting power is directly proportional to the amount of the validator’s stake. If a validator’s stake rises to a certain amount of the total token supply, it would allow them to control the consensus outcome. To solve this problem, Aptos has a limit to the amount any validator can stake. [wiki note: this can be circumvented by 1 person running multiple validators, thus not solving this problem] Rewards are capped at a certain stake level after which the validator will not continue to earn rewards. This mechanism is set in place to disincentivize validators from acting maliciously to control consensus outcomes."

Validator Stats

• Grew steadily from 102 to 123 validators during the time of Q4 2022 to Q4 2023. 84.6% of eligible supply is staked. The majority of stake for the validators comes from out-of-protocol delegation from the Aptos Foundation and private investors’ locked tokens.
• Google Cloud runs a validator (11-2022).
• From The Milk Road (20-10-2022):

"One developer called out how all 101 network validators were hand-picked by Aptos. Apparently, you had to sign an arbitration agreement in the Cayman Islands to be included in the validator set. "

Interoperability

• Has bridges through Wormhole and LayerZero (18-10-2022).

Oracle Method

Chainlink and CCIP will be integrated on Aptos (5-2024).

Compliance

• Aptos CEO faces a billion dollar lawsuit by the Glazer family member over equity (20-5-2022).

Roadmap

• Can be found [Insert link here].
• From Figment (23-9-2022):

"In the first half of 2022, Aptos Labs launched Aptos Incentivized Testnet (AIT1). Soon After on Jul 12, 2022 AIT2 was launched and wrapped up on Jul 22, 2022. Started on Aug 30, 2022, Sep 14, 2022 marked the end of AIT3. As of right now, we are currently awaiting Aptos Mainnet which is projected for Autumn 2022."

Revenue

• Went from $573k in Q4 2022 to a low of $162K in Q2 2023 and back up to $345K in Q4 2023.

Usage

• Had three spikes in usage, one after Chingari and Pyth got integrated, one around a on-chain graffiti event and one due to inscriptions (18-2-2024).
• From Our Network, written by Aptos themselves (28-1-2023):

"Aptos Monkeys currently has 429k APT in total volume. The network has seen over 1m NFTs minted across 5k collections. Outside of NFTs, Aptos [has] TVL with 58.3m in TVL locked on the network."

Projects that use or built on it

• Aave V3 deployment on Aptos passed a first DAO check, making it possibly the first Aave non-EVM deployment (7-2024).
• Coindesk published an article (8-2022) about Ian Macalinao wanting to go to Aptos and potentially redo his Solana TVL scheme. So be advised.
• Econia: Hyper-parallelized on-chain order book (23-9-2022)
• Petra Wallet: Official Aptos Wallet (23-9-2022)
• Superposition: Borrowing and Lending on Aptos and beyond (23-9-2022)
• Ditto: Liquid Staking (23-9-2022)
• Franklin Templeton; launching its money market on Aptos.
• Pontem Networks: Working towards global financial inclusion powered by blockchains. (23-9-2022)
• Thala; Thala Labs is building an over-collateralized, decentralized stablecoin, first for the Aptos blockchain (9-10-2022). It announced Thala Foundry, a DeFi incubator in partnership with the Aptos Foundation. The Foundry has $1 million in initial funding, which it will distribute to Aptos DeFi projects.
• Topaz: Aptos NFT marketplace (23-9-2022)

Competition

• Layer 1 blockchains and Sui in particular. Solana as well.
• From Delphi Digital (8-9-2022):

"Both Aptos and Sui aim at maximising the throughput of the network at every node, similar to Solana but with a very different technical approach. One of the core ideas of the design seeks to optimise the mempool dissemination layer by distributing a DAG of transactions and guaranteeing availability.

Both share the potential ability to scale beyond individual validator performance, via internal sharding of a validator and homogeneous state sharding. Internal sharding means that a validator won’t need to scale vertically, increasing its specs to match that of the network, but it can spawn other machines behind a load balancer and shard the state as if it were a single node. This is essentially addressing a concern with Solana that validator specs will bottleneck performance and elegantly achieve scalability."

• From this Sui & Aptos comparison thread (26-7-2022):

"Sui's version of Move has introduced some modifications, the most visible being the ownership API. It is more clean and it exposes the blockchain design more clearly IMO. But the libraries feel a little bit less developed than Aptos'. Aptos uses BlockSTM, which is an evolution of the high-performance HotStuff algorithm, and introduces parallelization by dynamically detecting dependencies and scheduling execution tasks (taking its inspiration from Software Transactional Memory). It's hard to tell which one will perform better in practice, but my bet is with Sui. Aptos has done already a very good job at optimizing their current design, whereas Sui seems to have more room. The two-paths of byzantine agreement give Sui an edge as well.

Sui tackles [state bloat] via efficient sharding of the store, focusing on horizontally scaling the resources. Aptos on the other hand puts more emphasis on supporting heterogeneous validators (contrained CPU and/or constrained storage). I like Sui's take on this.

They are both at a similar stage of development, with Aptos a bit ahead. It took me longer to set up the system than actually coding (I also happen to use NixOS). Learning the language and the environment involves some trial-and-error. Deploying to devnet is somewhat cumbersome in both as well. Fortunately, the unit test libraries are quite usable. The worst part has definitely been the obscure compiler errors, and devnet error responses that make no sense. These can be real time sinks."

Pros and Cons

Cons

• Their dev team wallet started to send ~$20M APT to Binance during their 400% token rise, hinting to sell their tokens, even though the project hasn't even been 1 year old and they raised $150M in funding.
• Had investment from bankrupt Alameda Research/FTX. This could mean fall-out risk since this equity will likely be sold due to bankruptcy.
• Widely criticized for having 80% of the token supply in the hands of the foundation and investors. From Milk Road (20-10-2022): "51% of tokens were supposed to go to the “community”, but turns out 41% is owned by the Aptos Foundation & 10% is owned by Aptos Lab. I guess community = Aptos Team?"
• Instead of the 100k TPS as advertized, had 4 TPS on launch (18-10-2022).
• When the launch happened, they shut down Discord channels and pretended that the launch went smoothly (17-10-2022).
• Permissioned blockchain. From The Milk Road (20-10-2022):

"One developer called out how all 101 network validators were hand-picked by Aptos. Apparently, you had to sign an arbitration agreement in the Cayman Islands to be included in the validator set. "

Team, Funding and Partners

Team

• Full team can be found [here].
• AptosLabs, used to work on Diem.
• "25+ members" (15-3-2022)
• Took the Head of Marketing from Solana and made it Director of Ecosystem at Aptos (19-7-2022).
• Mo Shaikh, the CEO and co-founder of Matonee, also known as Aptos Labs.
• Avery Ching; co-founder, together with Mo worked at Facebook on Diem.

Funding

• Launched $10M growth fund together with OKX Ventures (1-8-2024).
• Their dev team wallet started to send ~$20M APT to Binance during their 400% token rise, hinting to sell their tokens, even though the project hasn't even been 1 year old and they raised $150M in funding.
• Aptos turned out to have sold ~75M in equity to Alameda (8-12-2022). "that deal appears to have closed after the typical 90-day bankruptcy clawback window." (12-2022).
• Investors FTX Ventures, Coinbase Ventures, a16z crypto, Jump Crypto, Circle Ventures also invested in competitor Sui. Making both real VC darlings.
• From CoinDesk (25-7-2022):

"Raised $150 million in a Series A funding round that was led by FTX Ventures, the venture capital arm of crypto exchange FTX, and Jump Crypto, according to a press release. The round included investments from Andreessen Horowitz, Multicoin Capital and Circle Ventures among other crypto firms."

• From their blog (15-3-2022):

"Raised $200 million in a strategic round led by a16z crypto with participation from Multicoin Capital, Katie Haun, 3 Arrows Capital, ParaFi Capital, IRONGREY, Hashed, Variant, Tiger Global, BlockTower, FTX Ventures, Paxos and Coinbase Ventures, as well as a great supporting cast of other phenomenal firms, executives and angels across the Web2 and Web3 ecosystems."

Partners

• Partnered with Stacks to bring sBTC to their chain (17-9-2024).
• Aptos Labs and the Aptos Foundation formed partnerships with several large conglomerates and gaming companies, including Alibaba Cloud, SK Telecom, Readygg, and BlockGames (16-2-2024).
• The Aptos Foundation announced (Q3 2023) partnerships with several large conglomerates and gaming companies, including NEOWIZ, MARBLEX, NBCUniversal, and the Lotte Group.
• Is partnering with Microsoft (9-8-2023):

"The path begins with Aptos Assistant, a user-friendly Web3 onboarding tool powered by Aptos and Microsoft AI. Aptos will run validator nodes on Azure."

• From Decrypt (9-2-2023):

"By November Aptos had inked a partnership with Google Cloud. The company’s also running a validator on the Aptos network."

• "Over the past year, Thala contributors have built close connections with Aptos Labs" (9-10-2022).

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