Market investment research analysis of Meta public chain Aptos (APT)

On October 17, Aptos Labs announced the launch of the blockchain mainnet Aptos Autumn. Within a day, top exchanges such as Binance and MEXC released Aptos listing announcements, and tokens will be issued on October 19. A few hours after the listing announcement, the Aptos Foundation officially released the core summary of the token economic model. MEXC data shows that Aptos (APT) online trading has a maximum increase of 2850% and a 732% increase so far.

Data source:MEXC

Project Introduction

Aptos is a Layer 1 public chain project initiated by the former team members of the Meta (formerly Facebook) stablecoin project Diem. It is developed based on Diem’s open-source code and uses the Move programming language, BFT consensus protocol, and parallel computing mechanism. It aims to build a scalable, secure, and trusted smart contract platform serving billions of users.

Technology Innovation

1、Move Language

It is a new smart contract programming language that evolved from the Rust language, and everything is designed with the security of assets as the primary purpose. In the Move language, Token assets are resources that cannot be copied, discarded, or reused but can only be transferred and stored. However, in Solidity, Token is defined as a Value without restrictions and can be copied, issued, or deleted at will. The Move can fundamentally eliminate hacking incidents, such as unlimited Token issuance caused by various loopholes, making Move more suitable for the needs of blockchain in theory.

2、Parallelization

Aptos’ network design divides transactions into different stages. Each stage is independent and can be independently parallelized, which realizes multiple instruction streams and multiple data streams. While significantly improving network performance, verification nodes can perform additional expansion in storage, computing, etc., and also make the development of the entire network more flexible. Updates can target only one of the modules.

3、State Synchronization

Aptos builds a state synchronization scheme based on the Block-STM method, which has optimistic concurrency control, multi-version data structure, cooperative scheduling, and dynamic dependency estimation.

4、Node Architecture

Aptos does not design a leader node but adopts a star structure. There is a group of verification nodes in the network to achieve consensus using DiemBFTv4. Both verification and full nodes need to ensure a certain amount of data backup to prevent extreme situations. Although this increases the redundancy of the entire network, it will perform better in decentralization and network elasticity. The crash brought down the whole network.

Economic Model

The total issuance of APT is 1 billion, and the initial circulation is 130 million. The specific allocation is as follows:

51.02% is allocated to the community for ecological support, donations, and other community growth initiatives. Among them, 125 million APTs entered circulation at the time of creation. The remaining tokens are unlocked month by month at a rate of 1/120.

16.5% is allocated to the Foundation to support programs initiated by the Aptos Foundation. Among them, 5 million APTs entered circulation at the time of creation. The remaining tokens are unlocked month by month at a rate of 1/120.

19% will be allocated to core contributors, and 13.48% will be allocated to investors. The above shares will be fully locked for one year and will be allocated in the next three years. The specific lock-up and circulation are as follows:

  • 1. In the first 12 months after creation, no core contributors and investor shares will enter circulation;
  • 2. From the 13th to the 18th month after creation (including the 18th month), this part of the tokens will be unlocked month by month at a rate of 3/48;
  • 3. From the 19th month after creation, the remaining tokens will be unlocked month by month at a rate of 1/48.

For unlocking and circulation details, please see the following table.

Core Team and Investment Institutions

Investment Institutions

According to public information, Aptos has completed more than $350 million in the financing, and its investment institutions include A16Z, FTX Ventures, Jump Crypto, etc.

Development Team

According to the information disclosed on the official website and LinkedIn, the Aptos team currently has 64 employees, including computer experts from leading Internet companies, universities, and research institutions. In addition, there are more than 20 engineers, most of whom have Facebook work experience.

Market Value Analysis

Highlights:

1. The development team is from Diem, the cryptocurrency project of Meta (formerly Facebook). Co-founder and CTO Avery Ching has worked at Facebook as the chief software engineer for more than ten years and is the technical leader of the Novi team of the original Facebook encryption platform. The team members have relevant knowledge reserves such as cryptography, distributed algorithms, data structure and storage, and secure communication and have strong research and development capabilities.

2. The investment lineup is luxurious, and more abundant project development funds have been raised.

3. The development part of Aptos is based on the technologies publicly developed in Diem in the past three years. The Move language is a brand-new development language focusing on the blockchain’s security, scalability, and upgradeability.

4. The Aptos ecosystem has certain advantages. According to the official website data, more than 160 projects have been built on Aptos, including DeFi, NFT, games, wallets, etc. Some of the projects were migrated from other ecosystems, such as Solana and zkSync.

5. Data shows that, currently, Aptos can process more than 10,000 transactions per second. Ideally, the public chain can process 160,000 transactions per second in the future.

Although Aptos has highlights, the risks cannot be ignored, mainly reflected in:

Inadequate Decentralization

In terms of system architecture, in the face of the “impossible triangle” problem of the public chain, Aptos tends to be high-performance, and the decentralization of nodes is weak. It is necessary to continuously observe the operation and security of the testnet and mainnet.

Limited Technology Innovation

Aptos mainly improves the performance of the public chain. The main innovative technologies are smart contract programming languages, and account types, but no more disruptive technologies have been proposed.

Insufficient Innovation in Aptos Ecological Projects

Many projects in the Aptos ecosystem come from other ecosystems, such as Solana and zkSync. Although Aptos has a certain first-mover advantage in ecological construction compared with the other two public chains of the Meta series, due to the highly similar technologies, this may lead to multi-chain deployment and similarity of ecological projects. And most projects are at an early stage, with limited user participation and project completion.

Overvalued VC Investments

In July 2022, Aptos’ valuation reached US$2.75 billion in financing. Under the current market conditions, the room left by Aptos to the market may be compressed.

Doubtful Token Allocation

More than 82% of APTs are staked, and the staking rewards obtained by staking are not locked and can be circulated at any time. Considering that most of the circulating chips in the market in the initial stage are concentrated in the hands of Aptos officials and institutions, it may have a certain impact on the secondary market transactions of APT.

The MainnetLanding May Be Less than Expected

The mainnet has not yet been launched, and there may be the risk of not being deployed and launched as scheduled; the user experience after the launch still needs to be tested by the market; the lack of strong projects will drive users and funds to enter the market.

The public chain track is already in the red sea, and Aptos will face fierce competition. Ethereum has significant ecological advantages and is ecologically prosperous. Many teams and public chains are also researching and developing the next-generation new public chain. The public chains developed by the Meta-related teams include Sui and Linera. The mechanisms among them are highly similar, and whether it can be the best one in the end still needs market testing.

Note: This article is written by MEXC community users for information sharing only and does not constitute investment advice.

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