Is it worth investing in Aptos? What you need to know about the project

On October 18, the Aptos blockchain mainnet, created by former Meta developers who worked on the failed Diem cryptocurrency for the Facebook social network, was launched. The new project dubbed the “Solana killer,” is rolling out its ecosystem of decentralized finance (DeFi), non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs). Experts told GetBlock Magazine about their vision of the new blockchain technology and its prospects.

Technology and ecosystem

Aptos (APT) is a Layer 1 (L1) blockchain written in the Move language. A key feature of the blockchain compared to Ethereum (ETH), Solana (SOL) or Binance Chain (BNB) is Block-STM technology, which creates a mechanism that efficiently processes smart contracts, explains Berezka DAO and Weezi co-founder Roman Kaufman.

Aptos blockchain uses parallel execution to process multiple transactions simultaneously. “This greatly speeds up the operation, and even one failed transaction will not stop the whole chain. They can all be processed simultaneously and are checked after execution,” Kaufman explains. To improve efficiency, Aptos uses an algorithm to prioritize certain transactions. At the same time, the network's maximum throughput is claimed to be 160 000 transactions per second.

Compared to Solana, Aptos requires more powerful hardware, but its network is more stable due to the fact that each block in Aptos is synchronized with leading nodes and neighboring nodes. If a leading node fails, another node can take over. Aptos outperforms Ethereum in the number of transactions per second, but despite the speed, Ethereum is still more reliable for DeFi, says a Berezka DAO representative.

If you compare Aptos to Binance Chain, instead of using a consensus protocol that selects transactions in order, Aptos separates the two processes and allows them to run in parallel with each other. This reduces latency (the time it takes to validate network transactions) while increasing speed. “To ensure accuracy, Aptos developers created a Byzantine fault tolerant (BFT) mechanism that analyzes individual states in the chain and then automatically updates validators as needed,” Kaufman comments on the APT blockchain technology.

Vladislav Utushkin, the founder of the TOTHEMOON group of companies, also primarily notes that the Aptos blockchain is distinguished by the use of “Parallel Execution” technology, which multiplies the speed of transactions compared to competitors.

“Aptos is also all right with security,” emphasizes the expert, noting hybrid storage and key management options, transparent transactions, as well as a smart contract verifier written in the Move language, which will help secure user funds. The ability to massively deploy Web 3.0 and expand the ecosystem of decentralized applications (dApps) will make the new blockchain attractive to both developers and users, says Utushkin.

According to Kaufman, it's hard to talk about the prospect of DeFi's ecosystem on the APT blockchain yet, as many competitors have been working in the field for years, developing communities and giving grants to developers. “DeFi is decentralized finance, and finance requires high reliability first, and then speed and other things,” the expert notes, stressing that Ethereum retains the lead in DeFi.

Aptos technology itself is interesting and has its place, but the future of the project is uncertain, says Nikita Zuborev, senior analyst of Bestchange.ru aggregator. In his opinion, the project is likely to fall in line with those that are much discussed, but which "gradually remain on the sidelines of history" because of their minor differences and the low practical usefulness of their improvements. “Solana, Cardano or Polygon are certainly important, but more as testbeds to test new technologies rather than as a prospect to replace the duo of Bitcoin and Ethereum,” the analyst comments.

Tokenomics and token distribution

The Aptos mainnet was launched with an initial offering of 1 billion APT tokens, distributed as follows:

▪️ Community - 51,02% (510,2 million tokens)

▪️ Developers - 19,00% (190 million tokens)

▪️ Funds - 16,50% (165 million tokens)

▪️ Investors - 13,48% (134,8 million tokens)

The “community” tokens are distributed between Aptos Foundation (410,2 million) and Aptos Labs (100 million). They will be locked for at least a year, but market observers pointed out that locked tokens can generate revenue for their owners from staking, which in turn is available without locking.

The key point is that Aptos did not conduct a public sale of APT tokens, Roman Kaufman explains. The project has allocated a large percentage of tokens to its funds, with significant shares of tokens going to both major contributors and investors. “In my opinion, this distribution suggests that it is important for the team to plan for a long development, which means they will need a lot of resources to keep it going, as well as for promotion and grants. At the same time, a larger share for foundations and early core distributors is important, as they were the ones who helped attract the attention of a huge number of crypto investors during the bearish period,” the expert believes.

According to Zuborev, it is still difficult to assess tokenomics, because it is defined very conventionally and schematically in response to criticism from experts. There are a lot of questions to the announced and unconfirmed plan, the analyst says, “We see an unjustifiably inflated airdrop for the sake of increased attention to Aptos, as well as the fact that about 80% of tokens are controlled by the project team, which may inspire a certain level of distrust.”

Prospects for investors

At the moment the main concern of investors is tokenomics of the project, because almost 80% of the issue is controlled by Aptos team, Vladislav Utushkin notes. Nevertheless, almost after its launch, the coin moved up to 51st place by market capitalization on CoinMarketCap with a billion dollars, the founder of TOTHEMOON says.

There is no doubt that Aptos will take its deserved place in the cryptocurrency market, the expert believes. Its success will directly depend on how functional its blockchain proves to be in practice and how many real projects it will be able to poach from Ethereum or Solana. “In terms of investment, we see some pressure on the coin's exchange rate. This may be due to the massive sell-offs of those who got APT during airdrop. When the situation stabilizes, we may see growth of this asset,” Utushkin believes.

APT token trading was launched on leading cryptocurrency exchanges, including Binance, FTX, Coinbase, Huobi and OKX. The Aptos Foundation allocated 20,1 million tokens as airdrop to early users, most of whom began selling the received assets instantly, collapsing the APT exchange rate by more than 40% since the start of trading.

The claim to the project is that Aptos chose a rather aggressive strategy for marketing, but the project itself wasn't anything out of the ordinary, Zuborev argues. In spite of the fact that its technical possibilities solve some new problems of the oldest projects, Aptos does not offer anything conceptually new, according to the expert. “Prospectively, the APT token looks only on the long-term periods, the medium-term success can be hindered by the bloated program of airdrops. And short-term tokens with such liquidity in trading are best avoided, huge volatility is expected in short periods of time,” recommends the Bestchange analyst.

That said, Kaufman sees Aptos as one of the most serious crypto projects of 2022, pointing to the composition of the development team. Aptos co-founder and CTO Avery Ching has a decade of experience at Meta (Facebook), a PhD in high-performance computing, and has installed half a million time-synchronized servers worldwide. “The Aptos team includes 10 PhDs who are experts in cryptography. Their work is referenced by Vitalik Buterin and they have also contributed to Verkle trees, an advanced Ethereum scaling solution,” notes a Berezka DAO representative.

With its unique architecture and use of the Move programming language for additional security, Aptos stands out from the plethora of Layer 1 (L1) blockchain solutions. “I see this project as very promising,” the expert concludes.