What is Aptos? (All About Aptos)

Published on May 5th, 2023

Aptos is a cryptocurrency launched in 2022. Being a popular cryptocurrency, it draws tons of attention to what Aptos is all about. Some say Aptos is the next “Solana killer”, thinking that Aptos may be better than Solana. Others ponder about the investment potential and network intricacies of Aptos.

Aptos is a new modular Layer 1 blockchain network that aims to overcome the challenges of traditional blockchains. It features a modular design that consists of specific modules like smart contract execution, consensus mechanism, parallel transaction processing, client interfaces, and validator management. The Aptos network also features a byzantine fault-tolerant, proof-of-stake consensus algorithm and a Block-STM transaction execution engine that executes transactions in parallel, offering several advantages. It also uses a new programming language called Move, which emphasizes resource scarcity, preservation, and access control, allowing for seamless configuration changes and upgrades to the blockchain.

Whether you're a seasoned cryptocurrency investor or just getting started in the world of blockchain technology, this blog is the perfect place to learn more about Aptos and its potential to revolutionize the cryptocurrency industry. So, sit back, grab a cup of coffee, and join us on this exciting journey into the world of Aptos!

Let’s get started!

Introduction: What is Aptos and How Does it Work?

Aptos Tech

Aptos is a newer Layer 1 blockchain network designed to address the challenges of blockchain usage, including frequent outages, high costs, low throughput limits, and numerous security concerns.

Aptos has been developed over the past three years by over 350+ developers across the globe, with scalability, safety, reliability, and upgradeability as key principles.

The Aptos blockchain offers new and novel innovations in consensus, smart contract design, system security, performance, and decentralization. To achieve high throughput and low latency, the Aptos blockchain leverages a pipelined and modular approach for the key stages of transaction processing.

The Modular Blockchain of Aptos

Aptos is a type of blockchain that is made up of different parts or modules, each with a specific job. These modules work together to ensure that the blockchain can securely process transactions, enforce smart contracts, and maintain a reliable and consistent record of all transactions.

The key modules in Aptos include the smart contract execution module, the consensus mechanism module, the parallel transaction processing module, the client interfaces module, and the validator management module.

The smart contract execution module ensures that the rules of smart contracts are followed and that their results are consistent with the blockchain's state. The consensus mechanism module coordinates the validation of new blocks in the blockchain.

The parallel transaction processing module processes transactions in parallel to improve the blockchain's overall throughput. The client interfaces module allows external clients to interact with the blockchain.

The validator management module manages the set of validators responsible for validating new blocks and participating in the consensus mechanism.

Overall, Aptos is designed to be flexible and adaptable, with a modular architecture that allows for easy upgrades and replacements of components as needed.

This modular design approach ensures that the blockchain can evolve over time to meet the needs of users and applications, while also providing fast and secure execution, high throughput, and reliable operations.

Aptos Tech: Modular Chain

The Consensus Algorithm of Aptos

The Aptos blockchain is made up of a set of validators that jointly receive and process transactions from users using a byzantine fault-tolerant (BFT), proof-of-stake consensus mechanism.

Clients are any part of the system that needs to submit transactions or query the state and history of the blockchain. Clients can choose to download and verify validator signed proofs of queried data. The network also consists of Full Nodes.

Full nodes are clients that replicate the transaction and blockchain state from the validators or from other full nodes in the network, while light clients only maintain the current set of validators and can query partial blockchain state securely, typically from full nodes.

Block-STM: The Transaction Execution Engine of Aptos

One of Aptos Labs' great innovations is its Block-STM transaction execution engine. The Block-STM engine executes transactions in a parallel fashion.

General blockchains like Bitcoin execute transactions sequentially, one after the other. To speed up transaction processing, parallel transaction execution has been implemented.

Block-STM was modified to cater to blockchain specific use cases. Block-STM gives 3 basic advantages that allow for better transaction processing and development.

Features of Aptos's Block-STM

  • First, it can avoid the high cost of committing individual transactions by lazily committing all transactions in a block with light synchronization, making garbage collection simple.
  • Second, Block-STM uses a virtual machine to ensure the safe execution of transactions, separating the abstractions and avoiding inconsistent states during parallel speculative execution.
  • Finally, Block-STM guarantees a fixed order for transaction execution, which simplifies the problem and reduces synchronization requirements, making it more suitable for blockchain use-cases.

Is Aptos Proof of Stake (PoS)?

As we mentioned before, the Aptos consensus mechanism is Proof of Stake combined with BFT. Users can stake their Aptos to participate in the network without having to run a validator themselves. Users can Stake their Aptos with specific validators on the network.

When users stake their Aptos, they add voting power to the validator that is associated with the stake. This puts trust in the validator that they are staking with. Token holders then get to vote on-chain for new upgrades to the network.

Can You Mine Aptos?

Aptos is not Minable because its Consensus mechanism is not Proof of Work. Aptos operates on a consensus mechanism called Proof of Stake combined with Byzantine Fault Tolerance. People can instead Stake their Aptos tokens to receive a yield.

We have a tutorial on how to stake Aptos using Ledger Cold Wallets

When Validators stake their tokens, they receive Aptos which is created each Epoch as a reward for securing the network.

Move, the Next Generation Smart Contract Language of Aptos

The Aptos blockchain uses a new programming language called Move which is designed to prioritize safety and flexibility in smart contract programming.

The Move prover, a formal verifier for smart contracts written in the Move language, provides additional safeguards for contract invariants and behavior. This focus on security allows developers to better protect their software from malicious entities.

Move is similar to Rust and emphasizes resource scarcity, preservation, and access control. This means that resources like coins are protected from unauthorized access or duplication. Move also includes a bytecode verifier and a formal verifier called the Move Prover which ensure the safety and correctness of the code.

The ledger state of the Aptos blockchain includes user accounts and on-chain configuration, and Move's module upgradeability and programmability allow for seamless configuration changes and upgrades to the blockchain.

The Aptos blockchain also provides fine-grained resource control, which supports parallelization of execution and a near-fixed cost associated with accessing and changing data.

Additionally, the Aptos blockchain allows for large-scale datasets and shared or autonomous accounts, making it possible for complex decentralized autonomous organizations to collaboratively share accounts and resources.

Read more on the Aptos White Paper.

Move Smart Contract language Characteristics

The History of Aptos: How it Came to Be and Who Created it?

Aptos History

Mo Shaikh and Avery Ching are the co-founders of the Aptos blockchain project. Mo Shaikh holds a PhD in Computer Science from Stanford University and has worked as a researcher at both Facebook and Google.

At Facebook, Mo was a core member of the team that developed the Libra blockchain project. Prior to that, he was a founding member of the Google Brain team, where he worked on deep learning and machine learning research.

Avery Ching has a background in computer science and has worked in a variety of roles in the tech industry. He previously worked at Facebook, where he was a tech lead on the Libra project. Before that, he was a software engineer at Google, where he worked on Google Cloud Platform and Google Maps. Avery also co-founded a startup called VividCharts, which was later acquired by Splunk.

A History of Aptos:

The Aptos blockchain network was first proposed by a team of computer scientists and blockchain experts in 2018. The team aimed to overcome the limitations of existing blockchain networks, such as slow transaction times, high fees, and limited scalability, by creating a modular blockchain architecture that would allow for efficient transaction processing and increased scalability.

To achieve their goals, the Aptos team introduced a new programming language called Move, which was specifically designed for use on the blockchain. Move originated from Facebook and was created to be a secure and high-performance language for smart contract development.

2018: The Aptos team focused on the initial development and deployment of the blockchain network and establishing partnerships and collaborations.

2019: The Diem team completed the Move programming language, which was specifically designed for use on the blockchain and is now a critical component of the Aptos blockchain network.

October 2019: The team launched their test net, allowing developers and users to test and experiment with the Aptos blockchain network. This test net has helped to refine the design and performance of the blockchain and has also provided valuable feedback for the development team.

March 2022: Aptos raises 200 million in capital funding from a16z, Tiger, and other venture capitalists.

May 2022: Aptos raises Another 150 Million in capital funding from venture capitalists.

May 2022: The Launch of the Incentivized Testnet. The team launches a Testnet for the public to test. The purpose of it is to address feedback, questions, and concerns by other developers as well as the public.

August 2022: The Launch of Incentivized Testnet 2. The purpose of this Test-net was to check for performance issues, reliability, bugs, and other improvements.

October 2022: Main net Launch. The team finally launched the Aptos Main network.

Tokenomics: The Token Factors that Influence the Price of Aptos

Aptos Tokenomics

Tokenomics is the economics of tokens. These are factors that influence the price of a coin. These can elements such as inflation, burning, locking up tokens,and releasing tokens. Technicalities of tokenomics are also the supply of a token and how many tokens each party within the ecosystem may have.

Supply Distribution of Aptos

Out of an initial 1 Billion tokens, they will be divided between 4 parties, the Community, Core Contributors, Foundation, and Investors. The infographic below illustrates how many tokens are allocated to each party.

Aptos Token Distribution

Aptos has an initial supply of 1 Billion coins. The distribution plan for the Aptos blockchain community and foundation tokens aims to support various ecosystem-related projects. A total of 125 million Aptos tokens are allocated to community projects, and 5 million are set aside for foundation initiatives.

Most of the tokens, around 410 million, are held by the Aptos Foundation, while Aptos Labs owns 100 million. The remaining tokens will be gradually distributed over a ten-year period, with about 6.94 million tokens per month. This approach is designed to incentivize community growth and support the development of projects building on the Aptos protocol.

Token Supply Release Schedule for Aptos

Aptos has released their token supply schedule. The initial supply out of the 1 Billion total initial supply is 125 Million Aptos. It is spread out over a time of 10 years, until 2032. Since the blockchain mints tokens to reward validators, the supply inflates at a certain rate.

Tptos Token Release Schedule
Source: Aptos Tokenomics Website

Aptos currently burns all transaction fees. Since the chain is generally a different type of PoS-BFT consensus mechanism type chain, users can stake their coins to earn a part of the yield that comes from verifying blocks.

The Inflation of Aptos

As per the tokenomics page, Aptos tokens inflate at a general rate of 7%. This means that if the 1 Billion tokens were currently circulating and unlocked, each year 70 Million new tokens would be minted to reward stakers and validators.

The circulating supply inflation, on the other hand, is different. Aptos was launched in October 2022 with a circulating supply of 130 Mil. In October 2023, a year after their main net release, Aptos will have a circulating supply of 184 Million tokens.

This means that the total circulating supply inflation will be about 41% as a result of token unlocks by various parties such as the community fund. The source for this data can be found in Token Unlocks.

We can see the projected circulating supply inflation in the next table.

Aptos Circulating Supply Inflation
2023 41.53%
2024 117.93%
2025 36.65%
2026 22.6%
2027 8.18%
2028 7.42%

What is Aptos Used For?

Aptos Tokens have many use cases. Aptos tokens are required for many operations. Below is a list that shows what Aptos tokens are used for.

  • Sending Aptos Transactions
  • Providing Liquidity to DeFi Apps
  • Stake to earn a Yield.
  • Run a Validator(1 Mil APT required)
  • Minting NFTs

Aptos Fees: How Much Does it Cost to Send Aptos Transactions?

Aptos fees are low compared to Ethereum. However, the fees on Aptos vary depending on what transaction or operation the user is trying to do.

We have performed simple sends, DEX swaps, NFT Mints, and more types of transaction operations to see what each operation costs in terms of Aptos fees. We averaged these out and summarized these findings in the table below.

This is a Table which can be split into 2,3 or 4 columns

Aptos Transaction Fees
Simple Aptos Send 0.000585 APT to 0.001878
$0.00604305 to $0.01938096
Token Send 0.000546 APT to 0.003192 APT
$0.005628 to $0.03297
DEX Swap 0.000292827 APT to 0.000715 APT
$0.00301 to $0.00736
NFT Mint 0.0116756 APT to 0.02325424 APT
$0.1206 to $0.2395
Smart Contract Deployment 0.000444 APT to 0.011676 APT
$0.004 to $0.1202
Provide Liquidity About 0.0100056APT or $0.103‬

Aptos Funding and Partnerships: Who are the Key Backers?

It is interesting to know where Aptos came from, as well as its partnerships, founders, and key backers.

Aptos raised 350 Million in capital from venture capital firms such as FTX Ventures, Jump Crypto, Andreessen Horowitz, Multicoin Capital, and Circle.

Aptos has partnered with notable crypto space projects such as PancakeSwap, which integrated their DEX into Aptos. Additionally, they have partnered with other bridges.

Among partners, Aptos has different Staking providers such as Pontem Network, Fewcha Wallet, NodesGuru, or Stake.New. They have also partnered with many other projects to deliver great products in the DeFi, NFT, Gaming, and DEX space. Aptos Network has also integrated many great wallets to help onboard new users. New and existing companies are integrating Aptos into their wallets

This is the current Aptos Ecosystem in the infographic below created by AptosInsights.

Aptos Ecosystem
Credit goes to Aptos Insights

Is Aptos EVM Compatible?

Aptos is not EVM compatible currently. Aptos uses the MOVE virtual machine, whereas Ethereum uses the EVM or Ethereum virtual machine. Since Aptos uses MOVE as the primary smart contract language, it is incompatible with solidity smart contracts.

Furthermore, the Aptos virtual machine, or Move virtual machine(MVM) has different address types, events, and Move Modules. The MVM also has a resource module in which each address can have unique data associated with it.

Within the MVM, addresses in Aptos also have associated data structures and values called table entries. These are stored in the Binary Canonical Sterilization Format (BCS).

The EVM is a set of rules which illustrates how addresses and data are stored. The EVM also provides rules for how the machine state of Ethereum behaves. Aptos has an entirely different ruleset for its data structures, addresses, smart contracts, and other ledger features.

Is Aptos Decentralized?

Aptos is not really fully decentralized – it is decentralized technologically but not fundamentally. The mainnet launched with validators set up by mainly Aptos Labs.

There are a few validators set up by nonaffiliated people around the world. The mainnet launched with 102 validators. Because most of the validators are controlled by Aptos labs, Aptos isn’t really decentralized.

A small minority of the total validators are managed by 3rd party companies or people, most still are controlled by Aptos making Aptos largely a centralized blockchain. In the image below we can see that some of the validators are run by 3rd parties.

Aptos Validators May 2023

However, when the Main net launched, these validators launched with it. Most of these validator’s assets are owned by Aptos, and Aptos venture capital investors. We know this because it is said on the Aptos Tokenomics Website.

However, the validators are managed by other companies. For example, DSRVlabs is one of the companies that manages a validator for Aptos. On their website, we can see this.

Another feature that makes Aptos centralized is that to run a validator on Aptos you need 1,000,000 APT coins to stake with your node. In today’s terms, this is $10,600,000.

The average person, or even an average person in the top 1% of the population would not have this amount of money to run a validator. A net worth of at least 10 mil is required to run a validator on Aptos.

About 1.4 Million Americans have a net worth of over 10 Million(0.4% of the population). To have this much in cryptocurrency-based assets is an even less number.

Our Conclusion – What is Aptos All About? :

Aptos is a new type of blockchain network that aims to overcome the challenges of blockchain usage such as frequent outages, high costs, low throughput limits, and security concerns. The network was developed by over 350 developers worldwide, with scalability, safety, reliability, and upgradeability as its key principles.

The blockchain is designed to be modular, consisting of smart contract execution, consensus mechanism, parallel transaction processing, client interfaces, and validator management modules.

Aptos has a proof-of-stake combined with the Byzantine Fault Tolerance consensus mechanism, meaning that users can stake their tokens to participate in the network without having to mine. The blockchain uses the Move programming language, designed for flexibility and safety in smart contract programming.

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