This is a complete detailed Aptos Crypto Review. Aptos officially went live with its apt coin listed on every major crypto exchange and this sent its price soaring for days. However the crypto Project’s close connections to Big Tech. Its heavy Venture Capital backing and its messy mainnet launch have left many in the crypto community questioning. In this guide, you will know everything about Aptos including, where it came from, who made it, how it works, the tokenomics of Apt, and whether this crypto project has any potential. This information is an analysis of a crypto Project based on publicly available information and intended for educational purposes. This information may change given that Aptos is brand new.
Read Also: Crypto trading tips today for bear markets
Some of you will know the history of Aptos begins with DM. For those unfamiliar, DM was Facebook’s now Meta failed digital currency project. Facebook’s blockchain arm started working on DM in 2017. Back then DM was known as Libra which might ring a bell now. In contrast to actual cryptocurrencies, Libra was going to be a centralized blockchain controlled by Facebook and its constituents. The Libra coin itself was going to be a stable coin backed by a basket of Fiat currencies. What’s interesting is that Libra was actually supposed to decentralize after five years. Now when Libra was revealed to the public in 2019 governments around the world went into crisis mode. The idea of a big tech company with billions of users rolling out its own digital currency terrified them.
The crypto regulations were largely inspired by Libra and regulators cracked down on Libra harder. Libra tried ditching its plans to decentralize, tried to bow to the global Banks, and even tried rebranding to DM to get through all the red tape. It didn’t work and DM died in January this year. However, that didn’t stop some of DM’s developers from starting their own crypto projects. There are two, the first is Aptos and the second is sui. The sui recently raised 300 million dollars from crypto VCS but has yet to launch its mainnet.
Aptos was founded in late 2021, as a fun fact Aptos is the name of an unincorporated town on the coast of California. Aptos reportedly means for the people in the Indigenous language of the area but some sources suggest it means a meeting of two waters. In any case, being named after a coastal area of California is one of the many similarities Aptos shares with Solana. Solana was named after a Californian Beach Town that’s about 30 minutes north of San Diego not surprisingly the teams behind both Solana and Aptos are based in Silicon Valley. Aptos was founded by Muhammad Sheikh and Avery Ching. Muhammad holds a Master’s in Business Administration and his previous work experience is impressive resume includes BlackRock the Boston Consulting Group, Ethereum Builder consensus, and of course meta. Avery holds a Ph.D. in computer science and has spent most of his career working as a principal software engineer at Facebook.
Avery briefly worked at the Los Alamos laboratory in Nevada a facility famous for its military research. Aptos reportedly has over 350 developers working on its blockchain. Yet only Muhammad and Avery are noted as being part of the Aptos Labs team on the company’s website. The Aptos Labs LinkedIn also has a low number with just 78 employees at the company. What’s even odder is that there isn’t any information about the Aptos Foundation which oversees the crypto Project’s development or its members. The terms and conditions of the website reveal that the Aptos Foundation is based in the Cayman Islands. Recall that Aptos Labs is based in the USA despite these peculiarities Aptos managed to raise 350 million dollars from various crypto VCS across two funding rounds. The first funding round was for 200 million dollars in March this year and the second was for 150 million dollars in July this year.
The Aptos white paper was published in August. Now Aptos’s second funding round was especially significant because it was led by FTX Ventures. It looks like FTX is one of the largest if not the largest investor in Aptos. Heavy investment from FTX is another thing that Solana and Aptos have in common. FTX’s investment in Aptos seems to have either made binance nervous or just more bullish. Because Binance announced it had invested an additional undisclosed amount in Aptos labs in September. Some have taken this as a sign that Aptos has serious potential.
Aptos uses a proof-of-stake blockchain. This means whichever entity owns the most APT has the greatest influence over the blockchain. In Aptos’s case, this investor influence is especially acute due to Aptos’s upcoming on-chain governance. It’s also important to note that one of the largest investors in Aptos’s first funding round was three arrows Capital. The infamous crypto hedge fund went bankrupt earlier this year. What’s concerning is that Aptos has since removed all references to 3AC (Three Arrows Capital) from its blog posts. Aptos aims to be what Libra was supposed to be at the end of its original roadmap. A decentralized cryptocurrency that said Aptos seems to have a lot more in common with DM than it does with Bitcoin or Ethereum.
The way that Muhammad and Avery have spoken about Aptos in the few interviews. They make it sound like the project is a covert continuation of DM case in point. Aptos’s mission is to unite web 2 and web 3. It is working uncomfortably closely with Google in order to do this and there is more evidence under the hood. Aptos uses a delegated proof of State blockchain like many modern cryptocurrencies. The team behind Aptos claims its blockchain is simultaneously scalable i.e. fast decentralized and secure. Something that’s logically impossible due to the blockchain trilemma to quickly recap the blockchain trilemma states that a cryptocurrency can only be decentralized and scalable, scalable and secure, or secure and decentralized. Every crypto project ultimately makes a trade-off of some kind in bitcoin’s case for instance it trades scalability for robust security and decentralization. In Aptos’s case, it not so subtly trades decentralization for scalability and security.
Although the Aptos blockchain boasts tens of thousands of full nodes. It only has 102 validators what’s annoying is that the number of full nodes on Aptos does not appear to be noted on any of its blockchain explorers but don’t let the term full node fool you. The aptos’s documentation suggests its blockchain only stores the current state of The Ledger i.e account balances and transactions. This is similar to another crypto project called Mina protocol which stores the current state of its blockchain in a small digital snapshot. Like Mina protocol Aptos has a series of nodes that store its historical blockchain data on a quote single version distributed database,t he number of nodes storing Aptos’s full transaction history here is unknown. The documentation suggests it’s the 102 validator nodes but they aren’t obligated to store it now.
Its blockchain is growing quickly and the relative centralization of the Aptos blockchain makes it possible for it to process up to 4200 transactions per second with a theoretical maximum of 160000 transactions per second. What’s impressive is that Aptos’s current 4200 TPS also applies to more complex smart contract transactions. This is one of the reasons binance gave for its additional investment into Aptos. Which was again probably also motivated by ftx’s own additional investment during the second funding round. Another reason why binance invested so much in Aptos is because of its novel coding language and new virtual machine. Everything on Aptos has been coded in a move a programming language based on Rust that was invented by DM’s Developers.
Aptos uses its own move virtual machine for smart contracts. So three things to note, the first is that move isn’t the only thing that DMS developers invented. In an interview, Muhammad explained that DM basically had access to unlimited resources for research and development. As a result, Aptos uses cutting-edge Tech and what’s cool is that Aptos Labs actually has a research papers page that looks eerily similar to the research papers library page of Cardano Builder iohk. Aptos’s cutting-edge research and development might be why the company behind it is keeping the details of its developers under apps. After all, the last thing the project wants is to lose its top talent to equally well-capitalized competitors.
The second thing that is very rare is that a crypto project comes up with its own virtual machine for smart contracts. Almost all of the VMS are variants of Ethereum’s virtual machine believe it or not but it’s Aptos’s move VM that makes it a Solana Killer by Solana’s own admission in a panel discussion earlier this year. Solana founder Anatoly yakovenko tacitly admitted that the Solana team is extremely nervous about the introduction of a competing execution layer for smart contracts. Anatoly is also hyper-aware of how developer-friendly the move programming language is. This is in stark contrast to the developer experience on Solana. Anatoly has likened it to quote eating glass to make things worse Solana is coded in Rust and you’ll recall move is based on Rust makes it easy for developers from Solana’s ecosystem to migrate to Aptos. The same applies to developers working on near protocol and Polkadot. However, the crypto project that’s most of the risk of being killed by Aptos is actually flowed. Flow uses a multi-node architecture that separates the collection ordering processing and verification of transactions on its blockchain for efficiency as it so happens Aptos does something similar with its own transaction process.
Tokens on the Aptos Blockchain
The third thing to note and that’s the tokens on the Aptos blockchain. Which are called coins for some reason are apparently controlled by the entity that issues them. What this means is that any token on the Aptos blockchain can be frozen burned or minted at will by whoever created it. This seems to be an intentional design Choice as Muhammad mentioned in an October panel discussion that the Aptos blockchain can be compliant with regulations just like DM.
Tokenomics of Aptos Crypto
When it comes to tokenomics nobody actually knew what the tokenomics of Apt would look like until shortly before it started trading. This was perhaps the biggest red flag for the crypto community which questioned how crypto exchanges could possibly list a coin that had just published its taxonomies. So apt is used to pay for transaction fees on the Aptos blockchain. APT is also used for staking and is used for on-chain governance of the Aptos blockchain. Governance is currently limited to validators but will eventually be expanded to delegators as well the APT coin had an initial supply of 1 billion. Around 13.5$ of this initial Supply was allocated to early investors. 16.5% was allocated to the Aptos Foundation. 19% was allocated to core contributors which presumably means Aptos labs. The remaining 51% was set aside for the Aptos community.
APT allocated to core contributors and investors will only be investing after one year. ? this mean the only apt in circulation for the first year will come from that allocated to the Aptos community? According to the Aptos Explorer, around 180 million apt coins are currently in circulation. This is significantly fewer than the 130 million apt noted by coinmarketcap and coingecko. Again it’s not clear whether all the 180 million apt coins not being staked are in circulation. It notes that 125 million apt were made immediately available to the community and 5 million apt was made immediately available to the foundation of the 125 million apt that were allocated to the community. 20 million was airdropped to early testnet users after apt started trading. The rest who knows what’s more is that apt has no maximum Supply and it looks like apt supply has already increased by over 2 million. This is because of the roughly 820 million staked apt
The Aptos Foundation notes that staking rewards are quote not subject to restrictions on distribution. This means the early investors, the team and the foundation can sell their staking Rewards. The Aptos foundation and Aptos Lab’s custody of the APT allocated to the Aptos community that’s more than 51 of the initial Supply and it looks like they’re staking this apt too. All transaction fees are burned and apt’s inflation will decline by 1.5 annually until it hits 3.25. This is estimated to take 50 years meanwhile the APT initially allocated to the team’s early investors, the foundation, and the community will finish vesting in late 2032. Now the timeline to be on the lookout for is late 2023. This is when the big vesting Cliffs will begin the worst of them will happen in 2024. Which is coincidentally around the time the next crypto Bull Run should begin.
We cannot say anything about apt just yet because it’s a brand-new cryptocurrency. At first glance, Aptos looks grossly overvalued with a marketcap of over 1 billion and a fully diluted market cap of over 9 billion. However, it does look like some fundamentals are starting to form. According to the Aptos Explorer, there are over 1.7 million wallet addresses and chances are that number will increase.
Cardano has around 2.3 million wallet addresses according to the Ada Explorer. This means that Aptos is on track to surpass Cardano by a number of users within two weeks of launch. Cardano’s main net went live over 5 years ago which is some serious adoption. The thing is that the number of wallet addresses on Aptos doesn’t necessarily correspond to the number of users that’s why it is preferred to look at downloads of any web or mobile wallets associated with crypto. In this case, Aptos’s Petra and Martian wallets have over 1 million downloads.
DefiLlama suggests there are only around 17 million dollars of total value locked in Aptos’s D5 protocols. what’s frustrating is that DefiLlama statistics are also inconsistent with the stats on the website of the Aptos dApps. for example, liquid apt staking protocol Tortuga has nearly 3 billion dollars in total value locked with over 330 million apt deposited. This suggests that some early investors team members and maybe even the Aptos Foundation are secretly liquid staking. This detail isn’t noted in apt’s tokenomics. If this is true then it means you probably can’t trust the tvl on any D5 protocol on Aptos. This supports Tortuga’s liquid staked apt that’s because it would be very easy for early investors team members or the Aptos Foundation to fake a high tvl using their liquid staked apt.
Tortuga seems to be the only way that apt holders can currently delegate to validators. This begs the question of which validators Tortuga is delegating to it, and also begs the question of who is running the largest validators given that they’re staking almost identical amounts of Apt. The minimum and maximum stake for validators are Aptos’s documentation is unclear and also the Locking and unlocking time for the APT coin. What is clear is that there is no slashing risk for misbehavior. So at least all the VCS won’t have to worry about losing their precious apt. It would also be nice to know exactly how many DApps there are on the Aptos and how many unique wallets are actually using them. dap radar hasn’t started tracking Aptos dApps yet but the DApps list in the Martian wallet suggests there are at least 20 up and running, not bad for a brand-new crypto project.
Unfortunately, this doesn’t change the fact that we are in the middle of a crypto bear Market that’s likely to last for at least another year. The harsh reality is that almost all apt’s price action has so far been driven by speculation, not organic adoption. Luckily Aptos has lots of Milestones ahead of it, the closest thing Aptos has to a roadmap is a blog post from March this year titled quote the Aptos Vision. Aptos wants to scale to support billions of users and every use case you can think of just like every other new crypto. The difference is that Aptos actually has the tech to do it that doesn’t mean Aptos will scale overnight.
However, Aptos is still very much in development so don’t take them all too seriously. The first major upgrade to Aptos is expected to happen later this year or in the first quarter of next year consistent with a note in Aptos’s documentation. This implies that the validator requirements will be increased significantly at the start of 2023 and it suggests that Aptos’s speed will increase significantly. Additional Aptos Milestones can be found in interviews with the Aptos team and its Founders. In April the Aptos team revealed that the project is looking to partner with other big tech companies. Besides Google, at the same time, the Aptos team revealed that it wants to implement privacy-preserving Technologies to its blockchain in the future.
In September Avery explained that Aptos will eventually have a unique fee market for each DApps and use case on Aptos. This is very cool and very logical because it will allow Aptos to remain resilient to the kinds of DDOS attacks that have taken Solana offline while simultaneously keeping transaction fees low. In October Avery explained that Aptos will have a major upgrade every 4 to 6 months. This is to ensure that the blockchain will remain future-proof. Avery also explained that Aptos will start sharding its blockchain once it starts to become too bloated. Something that Ethereum is also planning.
There is quite a few biggest concerns is ridiculous, the disconnect between the supposed quality of the project and its transparency and organization. The Aptos has technically been in development since 2017. It had access to unlimited resources for research and development for years it raised 350 million dollars without a white paper or tokenomics and there are literally 350 people working for Aptos Labs. Aptos still has not hammered out the tokenomics of the APT coin. Why is there no YouTube channel, who is running the validator nodes, how you can’t see the details of the tokens and nfts on the Aptos blockchain? Where is the information about which crypto wallets belong to Aptos labs and the Aptos Foundation? There’s no way apt’s Supply is distributed as equitably as the Explorer suggests and Aptos shut down its Discord Channel and other socials when people started asking these kinds of questions.
The second concern about Aptos is almost as big and that’s the crypto Project’s Mission. It is unclear what Aptos’s end game is and Messari CEO Ryan Selkis was asking what crypto Niche Aptos is trying to claim. The Aptos vision of cryptocurrency is a maximalist one where everything is built on the Aptos blockchain. Other cryptocurrencies only interoperability with big tech companies and the existing Financial system. This attitude comes at a time when crypto VCs are betting on a multi-chain future with projects like Cosmos. Because they know there is no way for everything to be built on a single blockchain. It looks like the path that Aptos wants to take all the talk of decentralization just seems to be an attempt to get retail investors on board to be blunt. The Aptos team is not even good at selling these talking points and it might be because they don’t really believe them.
This ties into my third concern and that’s regulation. DM died a brutal death and if Aptos is in fact a continuation of DM then it is doomed to suffer the same fate. Aptos is on the bleeding edge of web3 but it doesn’t seem to be seriously interested in the core values of cryptocurrency.
This was a detailed Aptos Crypto Review, for the latest updates bout this project visits their official social media pages and website.