Aptos: Introduction to the next-generation high throughput Layer 1 chain
The Aptos mainnet has finally been launched. Congratulations to the team and all those who received the APT token airdrop as a reward for early users of its testnet. However, this is just the beginning. With Aptos, a whole new world of opportunities is opening up. Let’s discover it together!
Key Takeaways
● Aptos is a scalable layer 1 blockchain designed with scalability, safety, reliability, and upgradeability as key principles.
● The Aptos blockchain natively integrates and internally uses Move, a new smart contract programming language for fast and secure transaction execution.
● APT is the native token of Aptos. The current use cases for APT include
— Network Fees: Pay for transaction fees on the network.
— Validator Staking: Participate in DPoS network consensus.
— Governance: Participate in on-chain community governance.
● Aptos is notable for its high transaction throughput in terms of transactions per second (TPS) and its time to finality (TTF), enabled by its modular architecture which has decoupled transaction dissemination and consensus.
● Aptos has seen rising interest across the global blockchain ecosystem since its launch. Various projects like PancakeSwap, the leading DEX on BNB Chain, have issued a proposal to launch its DEX tools on Aptos.
Aptos is a scalable Proof-of-Stake Layer 1 blockchain developed by Aptos Labs, a blockchain startup led by two former Meta Engineers. Aptos mainnet “Aptos Autumn” was launched on Oct. 17, 2022. It offers new and novel innovations in consensus, smart contract design, system security, performance, and decentralization.
In 2021, Ethereum’s expensive gas fees led to the rise of alternative Layer-1 (alt-L1) blockchains that provided cheaper and faster user experiences. Unfortunately, some alt-L1 blockchains were able to achieve this by making certain trade-offs like sacrificing decentralization. Some alt-L1 have also faced frequent network outages, low throughput limits, relatively high costs, and numerous security concerns.
Aptos presents a technical approach designed with decentralization, scalability, safety, reliability, and upgradeability to address challenges faced by other Layer-1 blockchains. Ultimately, Aptos is positioned to be a leading alternative blockchain for mass adoption in the web3 era.
Background
Aptos first made waves in the crypto industry in March 2022 after it emerged that it had raised $200 million in a seed round led by venture capital firm a16z. Aptos Labs was founded in 2021 in Palo Alto, California, United States by core team members of the Diem project including the two Aptos co-founders Mo Shaikh and Avery Ching. Other notable members of the Aptos founding team include a group of PhDs, researchers, engineers, designers, and strategists.
Technology Overview
The Aptos blockchain consists of the following major components working concurrently:
Move language
Move is a new smart contract programming language that focuses on safety and flexibility. The Aptos blockchain natively integrates and internally uses Move language for fast and secure transaction execution. The Move ecosystem contains a compiler, Move Virtual Machine (MoveVM), bytecode verifier, package manager, and other developer tools.
Key Concepts in Move
● Data should be stored within the account that owns it not the account that published the module.
● Data flow should have minimal constraints with an emphasis on ecosystem usability
● Prefer static type-safety over run-time safety via generics
● A signer should be required to restrict access to adding or removing assets to an account unless it is explicitly clear
Proof-of-stake consensus
The Aptos blockchain comprises a set of validator nodes to agree on the ledger of finalized transactions and their execution results using the latest iteration of AptosBFT (Byzantine Fault Tolerance) Version 4, proof-of-stake consensus mechanism. Token holders lock up, or stake by delegating tokens to their selected validators to participate in the consensus process.
Staking on the Aptos blockchain
The Aptos staking module defines a capability that represents ownership. The OwnerCapability resource can be used to control the stake pool. Three personas are supported on the Aptos blockchain:
● Owner
● Operator
● Voter
Using this owner-operator-voter model, a custodian can assume the owner persona and stake on the Aptos blockchain and participate in the Aptos governance. This model allows delegations and staking services to be built as it separates the account that is in control of the funds from the other accounts (operator, voter), hence allowing secure delegations of responsibilities.
Parallel processing execution engine (Block-STM)
To improve execution efficiency, Aptos leverages a pipelined and modular approach for the key stages of transaction processing. Specifically, transaction dissemination, block metadata ordering, parallel transaction execution, batch storage, and ledger certification all operate concurrently. This approach fully leverages all available physical resources, improves hardware efficiency, and enables highly parallel execution.
Unlike existing parallel execution engines that break transaction atomicity by requiring upfront knowledge of the data to be read/written, Block-STM enables developers to code without limits, maintain composability, and achieve higher throughput and lower latency for real-world use cases.
Aptos uses batch processing to optimize efficiency in every stage of transaction processing. The transaction dissemination process groups transactions into batches, which are combined into blocks at the consensus stage. The execution, storage, and ledger certification phases also work in batches to provide opportunities for reordering, reduction of operations, and parallel execution.
With this architectural design, Aptos is able to achieve high speed and throughput, which are measured in transactions per second (TPS = (number of transactions in a block) / (block time in seconds)) or time-to-finality (TTF — the amount of time needed to fully confirm a transaction). Aptos is theoretically capable of processing 160,000 transactions per second. Finality in Aptos is deterministic and not probabilistic, which differentiates it from Bitcoin or Ethereum, where finality is probabilistic, meaning that it is possible, though economically impractical, to reverse the transactions in a block. Aptos’s deterministic finality implies that just one block is enough for an operation to become finality, so TTF is as low as block time.
The Aptos modular architecture design also supports client flexibility and optimizes for frequent and instant upgrades. Moreover, to rapidly deploy new technology innovations and support new web3 use cases, the Aptos blockchain provides embedded on-chain change management protocols.
Tokenomics
The native token of the Aptos blockchain, APT is used for transaction fees and on-chain governance. Per Coinmarketcap data, the total token supply of APT is 1,000,000,000. The current circulating supply is 130,000,000 (~13.00% of the total supply).
Currently, the maximum reward rate starts at 7% annually and is evaluated at every epoch. The maximum reward rate declines by 1.5% annually until a lower bound of 3.25% annually (expected to take over 50 years). All rewards and reward mechanisms are also modifiable via on-chain governance
Source: Aptos Foundation
Current State of the Aptos Network and Ecosystem
Network Activity
Following the launch of the Aptos mainnet, one of the founding engineers at Aptos Labs, Josh Lind, gave a breakdown of statistics on the chain’s overall performance in its first 24 hours.
The key highlights of Lind’s breakdown include:
● Aptos executed over 2.5 million transactions, with an average TPS of 27 txn/s and sustained peaks of over 70 txn/s.
● There were 2.5 million transactions:
— 55% were APT token transfers
— 7% were new account creations
— 13% were system transactions
— 25% were a mix of contracts, e.g., token claims, swaps, domain registrations, and custom modules.
● There were over 570,000 daily active users (unique account addresses that sent transactions).
● The average end-to-end latency for transaction finality was 0.9 seconds, timed from validator full-node submission to receipt of successful execution, and <0.5 seconds measured at validators. Transaction failure rates were less than 0.1% (due to malformed or invalid transactions).
● There are currently 102 validators, 140 validator full nodes, and 2,000+ public full nodes running on the network.
As of Oct 28th, the Aptoscan report shows that the Aptos mainnet is running smoothly with an average TPS of 14.62 txn/s. Resource utilization remains low. No components are showing signs of stress. For comparison, AIT3 (Aptos Incentivized Testnet 3) sustained thousands of TPS with less powerful hardware. We’re looking forward to more network analysis as more applications and user traffic increase on the network.
Ecosystem
There are currently over 150 projects in Aptos, with some estimating that there are over 200+. The Aptos ecosystem is rising rapidly and consists of a wide selection of protocols across DeFi, NFT, Games, Oracles, and more. Projects like Pancakeswap the leading DEX on BNBChain also recently passed a proposal to deploy on Aptos. Here are some notable projects building on Aptos:
The unique combination of focusing on the user experience, upgradeability, and state-of-the-art technology offered by the Aptos blockchain has attracted attention from developers, investors, and users alike. Moreover, Aptos offers a huge ecosystem, which is mostly still in testing and waiting to be discovered and tested.
Summary
Looking at the overview of the Aptos blockchains, the driving force behind Aptos can be boiled down to its unique parallel transaction processing abilities, the Aptos Labs team, and strong venture capital backing.
However, this ecosystem still has some weaknesses:
● Aptos is not an Ethereum Virtual Machine (EVM) compatible chain, also its primary programming language is Move. This might be a challenge for developers from other EVM-compatible blockchains who want to develop projects on this new blockchain.
● For retail investors, the fact that the project has raised a lot of capital at a high valuation could make it difficult to invest in tokens to find profits.
Despite the concerns, we’re already seeing multiple projects across DeFi, NFT, gaming, Web3 Identity, Launchpad, commerce, social networks, and media & entertainment deploying & integrating dApps and bringing their community over to the Aptos ecosystem. This trend is likely to continue and increase in the months and years to come.
Nevertheless, the successful launch of the Aptos mainnet is one step in a long journey to create universal and fair access to decentralized applications for billions of people through a safe, scalable, and upgradable blockchain.
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Disclosure
The material above has been prepared by BTS Ventures and is intended for information purposes only. This material is not intended to be relied upon as investment or forecast advice. This article does not recommend or suggest buying or selling any cryptocurrencies, or implementing any type of investment strategy. BTS Ventures research derived this information and opinions from proprietary and nonproprietary sources it considers to be reliable. They aren’t necessarily all-inclusive and can’t be guaranteed to be completely accurate. Always remember to Do Your Own Research (DYOR) and tread carefully.
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