1. The Origin of Aptos
Aptos is derived from Meta's Diem and Novi projects. In 2019, Meta announced the blockchain-based payment network Diem and the wallet Novi, but due to regulatory issues, these projects were unable to be launched. Diem was shut down in 2022 and its assets were sold to Silvergate Capital, and Novi also ceased operations in September of the same year. Aptos Labs was founded in 2021 by former Diem and Novi team members such as Mo Shaikh and Avery Ching, and was officially launched in February 2022. Aptos Labs raised $200 million in March 2022 and $150 million in July 2022, with a valuation of $2 billion. Investors include a16z, FTX Ventures, and others. The Aptos mainnet was launched in October 2022, and the Aptos Foundation is responsible for driving the development of the ecosystem. The current network version is V1.8.0.
2. Aptos Technology
The Aptos technology stack is designed around the core principles of scalability, security, reliability, and upgradability. It brings many new mechanisms to Aptos.
Consensus
Aptos is a Delegated Proof-of-Stake (DPoS) L1 network that uses the AptosBFTv4 consensus protocol.
AptosBFT
AptosBFT (originally called DiemBFT) went through four iterations during the Diem period, and was later used for the permissionless Aptos blockchain. The first AptosBFT was based on HotStuff, which itself was based on the traditional Practical Byzantine Fault Tolerance (pBFT) protocol. Aptos' current deployment - AptosBFTv4 - is now based on Jolteon, which increases the latency of HotStuff by 50% through a pBFT-style second view change.
Additionally, to mitigate latency caused by leader failures, AptosBFT selects leaders not only based on staking, but also based on performance (similar to reputation). Validators' performance is used to measure their success rate as leaders (how often their proposals are committed) and as non-leaders (how often they vote on proposals). In the Aptos V1.5 upgrade completed on July 18, 2023, the deployment of the Quorum Store further improved Aptos' throughput. Quorum Store is an implementation of the in-memory pool protocol Narwhale. Quorum Store optimizes consensus by separating data propagation from consensus.
"Before Quorum Store, transaction processing went through the memory pool and consensus stages:
Memory pool stage: All transactions were broadcast to all validators.
Consensus stage: The leader broadcast all transactions in its created block to all validators. Non-leaders voted on the block by sending signed block metadata.
- This led to two bottlenecks:
Redundant transaction propagation: In both the memory pool and consensus stages, all transactions were propagated to all validators twice.
Uneven work distribution: In the consensus stage, the leader did more work than non-leaders, as the leader had to send the original transactions rather than just the (relatively smaller) signed block metadata. Thus, the total bandwidth was limited by the leader's bandwidth, while the non-leaders' bandwidth was not fully utilized.
"The Store adds an intermediate stage between the memory pool and consensus protocol. The full process is now:
Memory pool stage: Transactions are no longer broadcast to validators, but sent to the Quorum Store.
Quorum Store stage: The Quorum Store protocol accepts transactions from the memory pool and batches them in order of gas fee. The Quorum Store then sends these transaction batches to the validators. Upon receiving a transaction batch, validators sign it and send it to other validators. Once a transaction batch receives signatures from over 2/3 of the validators, the Quorum Store creates a Proof of Availability, guaranteeing the uniqueness and availability of that batch.
Consensus stage: The consensus protocol is the same, except now the leader uses the authenticated transaction batches from the Quorum Store to create the block, rather than the original transactions from the memory pool.
- This solves the above two bottlenecks:
Redundant transaction propagation: The original transactions are only propagated once (from the memory pool to the Quorum Store), and then only the transaction batches are propagated, reducing the data volume in the messages.
Uneven work distribution: In the consensus stage, the leader only needs to send the transaction batch metadata (along with the corresponding PoAv). This is much less work than before, and is comparable to the non-leaders' work. Additionally, all validators have equal work in the Quorum Store stage.
DPoS
Validators are compensated through inflationary staking rewards. Currently, all transaction fees are burned. Staking rewards are tied to a validator's stake and performance (staking and reputation). Rewards are automatically distributed and compounded within each epoch (which will last two hours). Staked tokens are globally locked for a 30-day period.
Each validator sets a commission rate, with the remaining tokens passed on to their delegators. On-chain delegation was deployed on the Aptos mainnet on April 20, 2023. Delegators need to stake at least 11 APT to participate. This will allow more community participation in staking, while the minimum stake for validator participation is 1 million APT (worth $10.5 million as of December 26, 2023).
For validators, the staking cap is 50 million APT, which is around 5% of the total supply, not a very strict cap. However, if validator operators accumulate enough stake, they will be incentivized to spin up multiple validator nodes. It's worth noting that locked tokens can also be used for staking and earn liquid rewards (after the global 30-day unlock period).
There are currently no slashing mechanisms for offline or malicious validators, but such mechanisms can be added through governance in the future.
Execution
Once validators reach consensus on the block order, they need to execute the transactions in the block and permanently store the results. Many blockchains have a sequential transaction engine, where transactions are ordered and executed one by one. To speed up execution, Aptos uses a parallel execution engine. Furthermore, unlike Solana, Sui, and other networks that process transactions in parallel, Aptos does not require pre-declared dependency information from users.
To achieve this, Aptos uses Block-STM, which is built on the principles of Software Transactional Memory (STM) and Optimistic Concurrency Control (OCC). An OCC-based STM library follows a general framework: optimistically execute transactions (assuming no dependencies), verify after execution, abort on dependency violations, and eventually re-execute. However, this approach is rarely used in practice due to performance limitations from managing dependencies and cascading rollbacks.
To accommodate deployment and overcome these limitations of OCC STM systems, Block-STM leverages pre-determined transaction ordering to assess dependencies, reducing the amount of rollbacks. One of the key findings from the Bohm (2014) research was that pre-determined transaction ordering may be a blessing, not a curse. Block-STM even more fully utilizes the pre-determined order, refining dependency assessment through each rollback in the system (and thus reducing the chance of further rollbacks).
3. Aptos Ecosystem
In the first half of this year, the TVL growth of Aptos has been visibly strong. According to defillama data, as of the time of writing, the Aptos TVL has reached $888 million. Among this, the TVL increased from $130 million to a peak of $493 million in the first quarter, a growth of nearly 500%.
According to official data, Aptos' daily active addresses (DAA) average around 120,000, making it the second highest in the Alt L1 space after Solana. One of the main reasons for this data is that Aptos has been fully committed to building in the DeFi domain, as high farming yields are the most powerful weapon to attract active addresses. In addition, the high-performance infrastructure enabled by the Move language is also a necessary condition.
In September last year, the Aptos Foundation and Thala Labs, an Aptos ecosystem DeFi project, jointly launched a $1 million fund called "Thala Foundry" to incentivize the development of DeFi protocols based on Aptos. The plan is to support the launch of more than five new DeFi protocols on Aptos, and it is expected to grow to $5 million after the protocols go live and expand. In addition to supporting newcomers, as the first and most robust DeFi project in the Aptos ecosystem, Thala itself has also achieved an impressive performance in this cycle. Its TVL has consistently ranked first in the Aptos ecosystem in the first quarter, thanks to its good product architecture and farm yield. Its native token THL has risen from $0.6 at the beginning of the year to a peak of $3. Currently, Thala's TVL ranks third in the Aptos ecosystem, with Aries Markets, a lending protocol, ranking first. Aries Market is a lending and margin trading protocol. It was launched shortly after the Aptos mainnet release, and its TVL has grown significantly recently, soaring from less than $2 million in October 2023 to over $110 million. The growth so far has brought Aries' TVL to nearly $272 million. Since APT tokens are not staked, their value will be diluted by about 7% due to inflation. Therefore, liquid staking protocols are crucial for the continued development of the Aptos DeFi ecosystem. To develop the Aptos ecosystem, the Aptos Foundation has hosted hackathons and launched grant programs. In addition, Aptos Labs and the Aptos Foundation have also established many partnerships: Microsoft: In early August last year, Aptos Labs announced a partnership with Microsoft. This collaboration will bring Microsoft Azure AI capabilities to Aptos, starting with the Aptos Assistant, a chatbot aimed at helping users and developers use Aptos. GitHub's Copilot feature will also support Aptos Move. Google Cloud: Aptos Labs has collaborated with Google Cloud on various programs and integrations, including running Aptos validators and indexing Aptos data for BigQuery on Google Cloud, an accelerator program that provides APT and Google Cloud credits, and co-hosted hackathons. Alibaba Cloud: At the end of November last year, the Aptos Foundation partnered with Alibaba Cloud to develop the Web3 developer community in the Asia-Pacific region. This collaboration includes the Aptos Foundation as the main blockchain sponsor of Alibaba Cloud's Singapore Innovation Accelerator program, cooperation in launching the Move developer community in Asia, and co-hosting a series of hackathons and other events. SK Telecom: In early November last year, Aptos Labs collaborated with SK Telecom and its technology partner Atomrigs Labs to develop a Web3 wallet service called T wallet. Aptos is SK Telecom's first non-EVM partner. Flowcarbon: In mid-September last year, the Aptos Foundation partnered with Flowcarbon to make Aptos a carbon-negative blockchain. The Aptos Foundation will purchase and retire carbon credits tokenized by Flowcarbon. Coinbase Pay: In mid-September last year, Aptos Labs partnered with Coinbase Pay to integrate Coinbase's fiat on-ramp into the Petra wallet developed by Aptos Labs. The mobile Petra wallet was launched on Google Play and the Apple App Store in June. In late October, it was integrated with the hardware wallet Ledger. The native token of Aptos, APT, is used for security and anti-sybil attacks (validator and delegator staking), resource consumption (transaction fees), and on-chain governance. Initially, 1 billion APT were allocated to various buckets with different locks. APT does not have a fixed supply, and the current annual growth rate is 6.895%. Currently, all transaction fees are being burned. As mentioned, APT is inflationary and will continue to provide rewards to stakers. The annual inflation rate is set at 7% in the first year after genesis, and then decreases by 1.5% each year until it stabilizes at 3.25%. Please note that this rate is based on an initial total supply of 1 billion APT and is subject to governance. The maximum growth in the liquid supply of APT will occur during the six-month unlocking period from mid-November 2023 to mid-April 2024. During this period, the initial allocation of liquid tokens (excluding staking rewards) will increase from 209 million to 334 million, an increase of about 60%. According to the data for the full year 2024, APT's performance has been moderate, currently reaching $10.17. Interestingly, recently due to BLACKPINK member Rosé Park Chaeyoung and singer Bruno Mars releasing a song called "APT", yesterday despite the overall market downturn and widespread altcoin crashes, the price of $APT has remained resilient, and today it has even bucked the trend and surged, reaching a new six-month high. Aptos is engaged in fierce competition with some top projects vying for dominance in high-performance Layer-1 positions. Here is an analysis of it compared to some major competitors: Aptos vs. Solana: Solana has an advantage in speed due to its parallel processing engine, but its network occasionally experiences downtime, affecting its stability. In comparison, Aptos' design is more reliable, with built-in redundancy to ensure multiple backups can quickly take over in the event of a primary node failure. However, this high availability also requires slightly higher hardware configurations. Aptos vs. Avalanche: In preliminary testing, Aptos slightly outperformed Avalanche in transaction speed. While Avalanche is faster in ideal conditions, Aptos has an advantage in real-world applications. Particularly in terms of transactions per second (TPS), Aptos far exceeds Avalanche, whose subnets have a TPS of around 4,500, while Aptos can reach 130,000 to 160,000 TPS. Additionally, Aptos performs well in user experience. During the NFT hype, Avalanche's gas fees could spike, while Aptos prioritized maintaining lower fees, and its Move language-based innovative storage features also allow users to bundle transactions, further reducing costs. Aptos vs. Ethereum: In terms of speed, Aptos undoubtedly surpasses Ethereum. Ethereum's transactions typically require around a minute to finalize, while Aptos can complete them in sub-second time. This speed advantage stems from its hardware configuration and design choices, as Aptos uses 16 CPU cores, while Ethereum relies on a single core. However, Ethereum remains the king of stability. Although Aptos has shown strong potential, its reliability is not yet comparable to Ethereum's nearly impregnable network. Therefore, for users willing to pay higher fees and accept slower speeds, Ethereum remains the safer choice. Overall, Aptos shows promising development prospects, built on the foundation of Meta's Libra/Diem project and supported by an experienced development team. In testing, Aptos has demonstrated impressive transaction speeds, showcasing its technical capabilities. Its separation of consensus and execution, as well as the use of the Move programming language to enhance security, are noteworthy features. However, before considering an investment, it is crucial to assess the associated risks. As a relatively young project, Aptos' long-term performance is yet to be proven. Additionally, some engineers have expressed skepticism about the transaction speeds Aptos claims, suggesting caution regarding its official data. While Aptos provides a good starting point, thorough research, risk assessment, and only investing what you can afford to lose are essential before investing in any cryptocurrency.Aptos originated from Meta's Diem project, and has quickly become one of the mainstream blockchain platforms, thanks to its innovative technical architecture and extensive ecosystem layout. Through its unique AptosBFT consensus mechanism and Block-STM parallel execution engine, Aptos has significantly improved transaction processing efficiency and network scalability. Its ecosystem is developing strongly, especially the thriving DeFi projects such as Thala Labs and Aries Markets, which have performed well in attracting a large number of users and increasing TVL. Meanwhile, the partnerships established with global top companies such as Microsoft, Google Cloud, and Alibaba Cloud have brought more innovation opportunities and resource support to Aptos. Although the APT token faces certain inflationary pressure, the continuous technological upgrades and ecosystem expansion make its future potential promising, particularly in the current market environment, so Aptos has the appeal of long-term investment.
Disclaimer:
This content is for reference only and does not constitute any form of investment advice. Cryptocurrency assets are highly volatile, so investment carries high risks. Before making an investment decision, please fully understand the relevant risks and make an independent judgment based on your financial situation and investment objectives. The author and the platform are not responsible for any investment losses caused by this content.
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