Aptos VS. Avalanche: Which is The Better Layer 1?
Published on June 19th, 2023
Published on June 19th, 2023
Are you ready to dive deep into the realm of blockchain technology and discover which Layer 1 protocol comes out on top? If you've been seeking answers to questions like "What is the best Layer 1 solution?" or "Which platform offers superior scalability and security, Aptos or Avalanche?", then you're in the right place.
Aptos and Avalanche are two successful blockchain networks. They have impeccable differences and similarities. It begs the question, Which is Better, Aptos or Avalanche?
The technological comparison between Aptos and Avalanche reveals that Aptos outperforms Avalanche in transaction throughput with 160k TPS compared to 4,500 TPS. Aptos also achieves faster transaction finality, taking around 500 milliseconds, while Avalanche takes 2 seconds. In terms of decentralization, Avalanche has a higher number of validators with 1242 compared to Aptos' 108. However, Aptos provides better security through its Move smart contract language and a consensus algorithm composed of AptosBFTv4 and Bullshark. In tokenomics, Avalanche exhibits lower inflation rates, a larger number of unlocked tokens, and more coin burning, indicating a better tokenomics model. Additionally, the TVL to MC ratio suggests that Aptos is overvalued, while Avalanche appears undervalued, indicating potential for growth based on fundamental value.
Let's embark on this journey together as we compare Aptos and Avalanche, exploring their unique features, underlying technology, Tokenomics and fundamentals. By the end, you'll have a masters – grade understanding of these Layer 1 protocols.
Aptos, which entered the market in October 2022, represents a fresh entrant in the realm of blockchain platforms. Its primary objective is to tackle the scalability and energy consumption challenges often associated with other blockchain solutions.
Aptos sets itself apart through the utilization of the Move programming language, an innovation crafted by Facebook's Diem blockchain team. Move is specifically engineered to be a secure and dependable language for scripting intelligent contracts. It incorporates notable elements such as automated resource management and a linear type of system.
The Block-STM implementation functions as a transaction execution engine within the Aptos blockchain platform. By prioritizing faster block propagation and efficient storage, it significantly elevates the overall performance and scalability of the blockchain.
Consequently, Aptos emerges as an exceptionally practical and resourceful solution, catering to a broad range of use cases. Notably, decentralized finance (DeFi) and non-fungible tokens (NFTs) benefit from Aptos' aspiration to furnish a more efficient and sustainable alternative to other existing blockchain platforms.
One of the facets of Aptos is its unique approach towards wallet management, which, although not explicitly mentioned, can be inferred to benefit from the platform's utilization of the Move programming language and Block-STM implementation for optimized transaction execution. This, coupled with Aptos’ aim to provide a sustainable and efficient blockchain platform, hints at the potential for user-friendly, secure, and high-performance Aptos wallet solutions, integral for seamless transactions and asset management within its ecosystem.
Aptos makes use of a consensus algorithm consisting of Proof of Stake, AptosBFTv4, and Bullshark. All of these integrations make Aptos a killer when it comes to throughput.
Avalanche is a blockchain platform that leverages a unique technological architecture, allowing for the creation of multiple sub-chains, each with its own consensus algorithm. This innovative approach provides flexibility and customization, enabling subnets within the Avalanche network to employ different consensus algorithms based on their specific requirements.
The network supports a range of consensus algorithms, including the Snow family of algorithms like Snowball, Snowflake, and Snowstorm, as well as other variants. By utilizing this multi-chain framework, Avalanche optimizes scalability, performance, and adaptability, empowering diverse use cases to coexist seamlessly within the ecosystem.
This technology facilitates parallel processing and enables subnets to operate independently with their chosen consensus algorithm, making Avalanche a dynamic and versatile platform for decentralized applications.
Avalanche, established in 2020, is a groundbreaking blockchain network renowned for its distinctive consensus algorithm, known as the Avalanche consensus protocol. Founded by Emin Gün Sirer, Kevin Sekniqi, and Maofan "Ted" Yin, the platform aims to revolutionize the blockchain landscape by offering a scalable and efficient infrastructure for decentralized applications.
As a distributed ledger, Avalanche operates by leveraging a network of validators that play a vital role in securing the network and validating transactions. The Snow consensus algorithm ensures the integrity of the ledger by allowing validators to reach agreement on the state of the network efficiently.
This distributed consensus mechanism empowers Avalanche to serve as a reliable platform for various applications, including decentralized finance (DeFi), digital asset issuance, and decentralized exchanges.
When it comes to blockchain networks, technology is important as it determines the degree of decentralization, transaction throughput, transaction confirmation and security. All very important factors that users, developers, and people care about.
In this passage we compare Aptos and Avalanche from a technological perspective. Which blockchain network has superior technology, Aptos, or Avalanche? We answer this question right here.
The next table summarizes our findings about the technology of Avalanche and Aptos.
|Aptos VS Avalanche: Technological Backing|
|Max TPS Throughput||160,000 TPS||4,500 TPS|
|Virtual Machine||Move Virtual Machine (MVM)||EVM, though each sub-chain can have different virtual machines|
|Main Smart Contract Language||Move - Core||Solidity|
|Avg. basic Transaction Fee||0.000585 APT
|Consensus Algorithm||Proof of Stake + BFTv4 + Bullshark||Avalanche Consensus Protocol (ACP)|
|Total Validators Online||107||1243|
|Minimum Required to Run a Validator||1,000,000 APT or (About)$7,000,000||2,000 AVAX or about $24,000|
|Block Production Time||0.33 Seconds||2 seconds|
|On-Chain Governance?||Yes||Limited governance, Doesn’t support changes to arbitrary aspects of the system|
|Modular Blockchain Architecture?||Yes||Yes|
|Transaction Confirmation Time / Finality||500 milliseconds||Under 2 seconds|
So how do Aptos and Avalanche compare? Let’s take a look under the hood of each cryptocurrency.
First of all, we can see that Aptos has superior transaction throughput than Avax, boasting an impressive 160k TPS while Avalanche has a throughput of 4,500 TPS. It also has quicker finality than Avalanche. Transactions on Aptos reach finality, or confirmation, in around 500 Milliseconds, whereas in Avalanche, it takes 2 seconds.
To achieve its immense throughput, Aptos employs various technologies such as its Block-STM execution engine which executes transactions parallelly. It also employs the more modern Narwhal DAG based mempool and Jellyfish Merkle tree for faster performance.
Secondly, when it comes to interoperability, Avalanche is the winner of this match. Developers can deploy sub-chains within the avalanche network with custom consensus algorithms and custom virtual machines. This allows for a higher degree of interoperability.
Aptos on the other hand, is really only interoperable with Sui(See Aptos vs SUI). Avalanche is interoperable with all EVM compatible blockchain networks(20+ networks) and its sub-chains are interoperable with each other.
When it comes to decentralization, Avalanche also beats Avax. Although we go deeper into this in the next section, it is easier to deploy Validators on avalanche than on Aptos.
Looking at security, Aptos is better than Avalanche. This is because Aptos features a more modern smart-contract language designed for asset security called Move. It also boasts a consensus algorithm composed of 3 separate parts. All in one, it contributes to superior security whilst also solving the throughput trilemma.
Aptos features their modified AptosBFTv4 which is a better version of Byzantine fault tolerance. With Proof of Stake, it also features Bullshark, an asynchronous DAG based consensus engine.
Looking at similarities, Aptos and Avalanche both are designed with a modular architecture. This allows developers to upgrade specific modules of each network. Both Aptos and Avalanche feature on-chain governance, though the governance in Avalanche is more constrained which is a negative feature of the blockchain network.
The very ethos of cryptocurrencies is decentralization and permissionless. Thus, the most decentralized networks are almost always the most valuable ones. Take for example Ethereum, it has more than 500,000 validators online from all over the world.
Let’s take a look at Aptos and Avalanche and see which blockchain network is truly the most decentralized currently. In the table below, we summarize our findings.
|Decentralization: Aptos VS Avalanche|
|Number of Validators||108||1242|
|Capital Required to run a Validator||1,000,000 APT||2,000 AVAX|
|Capital Required to run a Validator(In USD)(As of June 2023)||$6,900,000||$24,000|
|Offline Time||None||1 hour in 3/23/2023|
Limited On-chain governance
|Consensus Mechanism||PoS + AptosBFTv4 + Bullshark||Avalanche Consensus Protocol|
|Paused by Developers / Team?||No||No|
When comparing the decentralization of Aptos and Avalanche, several metrics shed light on the degree of decentralization within each network. Let's analyze the table to determine which network demonstrates a higher level of decentralization.
Firstly, in terms of the number of validators, Avalanche takes the lead with 1242 validators compared to Aptos' 108. This indicates that Avalanche has a significantly larger and potentially more decentralized network, with more participants involved in the validation process.
Next, looking at the capital required to run a validator, Aptos demands 1,000,000 APT tokens, whereas Avalanche requires 2,000 AVAX tokens. Based on this metric, Aptos presents a higher barrier to entry for validators, suggesting that it may have a more centralized ecosystem in terms of capital requirements.
Considering the capital requirements in USD, Aptos stands at $6,900,000, while Avalanche requires only $24,000. This substantial difference indicates that Avalanche offers a more accessible and potentially decentralized network, as it requires significantly less capital investment to participate as a validator.
Examining the offline time, Aptos has no reported instances of offline time, while Avalanche experienced a one-hour outage on March 23, 2023. Although Avalanche encountered a temporary setback, it is important to note that no long-term or recurrent issues were reported for either network.
Thirdly, Aptos boasts an on-chain governance system that allows the community to vote on proposals and submit Aptos Improvement Proposals (AIPs). In contrast, Avalanche features a more limited on-chain governance model where improvement proposals are not highlighted. The governance focus primarily revolves around specific changes such as inflation and network maintenance, with core modules remaining unchanged through governance.
In terms of consensus mechanism, Aptos combines PoS, AptosBFTv4, and Bullshark, providing a multi-faceted approach to consensus. On the other hand, Avalanche employs the Avalanche Consensus Protocol, which introduces its own unique consensus mechanism.
Lastly, comparing the number of active developers, Aptos has 64 developers actively contributing to the project, while Avalanche currently has 38 developers involved. Though Aptos appears to have more active developers, it's important to consider the overall development activity and the impact of each developer's contribution to assess the decentralization aspect.
Another important metric to consider when comparing cryptocurrencies is Tokenomics. Tokenomics, or the token economics of cryptocurrencies involve factors that influence how well the cryptocurrencies perform in the markets.
In the table below, we summarize tokenomic traits of Aptos and Avalanche to see which has superior tokenomics. Acquiring digital assets that have better tokenomics will benefit the holders of the assets since they will be more likely to accrue value.
|Tokenomics: Aptos VS Avalanche|
|Circulating Supply (As of June 2023)||206.4 Million APT||344.96 Million AVAX|
|Total Supply(As of June 2023)||1040 Million APT||431 Million AVAX|
|Circulating Supply of Total Supply Percentage (As of 2023)||19.8%||80%|
|General Inflation Rate [lower is better]||6.99%||3.93%|
|Circulating Supply Inflation rate (2023)||41.53%||22.2%|
|Circulating Supply Inflation rate (2024)||117.93%||16%|
|Circulating Supply Inflation rate (2025)||36.65%||9.1%|
|Circulating Supply Inflation rate (2026)||22.6%||8.24%|
|Points of Demand (What creates demand for the coin)/ Use Cases||
|Burning Mechanism?||Burns All Transaction Fees||Burns All Transaction Fees|
|Burnt Tokens||Burns about 100-250 APT at current transaction rates per year||Has burnt 2,434,759 AVAX as of June 2023|
NOTE: We define circulating supply inflation as the increase in circulating supply yearly as a result of coin minting and token unlocks from various parties like team, foundation, and investors.
Tokenomics also influences how fast cryptocurrencies decline in price when the overall cryptocurrency market is in decline. For example, if most coins are down 90%, the coins with great tokenomics may only fall down 70%.
Let’s analyze the table above to figure out which cryptocurrency has better tokenomics. This will have a large impact on their price performance.
First of all, Avalanche seems to have lower inflation rates than Aptos. The general inflation of Avalanche is 3.98%, Aptos has a much higher inflation of about 7%. When it comes to tokenomics, Avalanche seems to be winning.
Many more tokens have been unlocked in the Avalanche ecosystem than in Aptos. This is great news for Avalanche because the circulating inflation is lower than Aptos.
When tokens get unlocked, they eventually find their way into the open market being sold. This creates sell pressure which moves the price downwards. Coins, which have a majority of supply already released don’t have large players looking to take profits.
When it comes to use cases or demand, it seems that Aptos and Avalanche have quite similar use-cases. Though one benefit that Avalanche has is that running a validator is more affordable.
Staking is possible on both Aptos and Avalanche, people can earn a passive yield by staking their Aptos or Avax Coins. In order to do this, they first have to buy and obtain the native coins, creating demand for Aptos and Avalanche.
Because it is more affordable, people are more likely to purchase AVAX coins for the purpose of running a validator. The incentive being that they get compensated with more Avax coins or out of the idealistic notion of keeping the network secure and decentralized.
Still however, this creates more demand on Avalanche than on Aptos.
We can wrap this analysis with the final nail in the coffin that Avalanche has on Aptos. When it comes to tokenomics, it is clear that Avalanche is superior to Aptos. We see that it burns more coins than on the Aptos network. Aptos and Avalanche burn all transaction fees, though Avalanche burns more coins because it is being used more.
With Avalanche burning coins at a steady and fast pace, it is set to lower the supply of Avax. With a lower supply, the assets become scarcer, and the price eventually goes up.
All in all- we can see that Avalanche has better tokenomics than Aptos.
When assets become overvalued, they become less desirable than assets that are undervalued. Undervalued assets are assets which are better for people who choose to buy them because they have the potential to go up in price to a greater degree.
Thus, we enter the realm of fundamental analysis. When it comes to Aptos and Avalanche, which blockchain is more overvalued than the other? We will attempt to answer this question. We put our findings in the chart below.
|Fundamentals and Value Metrics: Aptos VS. Avalanche|
|Marketcap (As of June 2023)||$1.454 Billion||$3.969 Billion|
|Total Value locked (TVL) (As of June 2023)||$49.5 Million||$1.56 Billion|
|TVL to Marketcap Ratio (as of June 2023) [ Higher is better]||0.034||0.393|
|Fully Diluted Marketcap (As of June 2023)||$7.04 Billion||$8.305 Billion|
|TVL to Fully Diluted MC ratio [Higher is better]||0.007||0.1878|
|Total DEX Volume(7d) (As of June 2023)||$5.1 Million||$13 Million|
Markets are cyclical, assets go from overvalued to undervalued time and time again. Certain cryptocurrencies are valued based on the speculation that they may appreciate in the future. There is no rationale behind it, rather it's a simple belief. Other cryptocurrencies are genuinely undervalued while having great adoption, utility, and constant growth.
Let’s take a look at the table above to see which cryptocurrency may be overvalued.
First of all, an important ratio that we can use is the TVL to MC ratio, which illustrates how much capital people are depositing into the cryptocurrency ecosystem and “Locking it up”. This metric gauges how much people are trusting the network with their capital and how much the blockchain network is being utilized to store value.
When it comes to valuations, The higher the TVL to MC ratio, the more undervalued the blockchain network it currently is. Looking at the TVL to MC ratio above, we can see that Aptos is far more overvalued compared to Avalanche(0.034 for Aptos VS 0.393 for Avalanche).
In simple terms, Aptos is priced in by speculation and is an expensive asset, Avalanche is undervalued and is an asset worth holding based on fundamental value.
In the long-term, we also see that the TVL to Fully Diluted MC ratio is much higher for Avalanche than for Aptos(0.1878 vs 0.007), meaning that Avalanche is still more undervalued compared to Aptos. This makes Avalanche a more desired cryptocurrency.
There are main differences and similarities between Aptos and Avalanche. We summarized all of these traits in the infographic below for better understanding and visualization.
In conclusion, the comparison between Aptos and Avalanche reveals distinct characteristics and strengths of each blockchain network. From a technological standpoint, Aptos demonstrates superior transaction throughput with 160k TPS compared to Avalanche's 4,500 TPS. Aptos also achieves faster transaction finality, confirming transactions in around 500 milliseconds, while Avalanche takes 2 seconds.
Regarding decentralization, Avalanche surpasses Aptos in terms of the number of validators, with 1242 validators compared to Aptos' 108. However, Aptos offers better security through its modern smart contract language called Move and a consensus algorithm comprising three separate parts, including AptosBFTv4 and Bullshark.
In terms of tokenomics, Avalanche presents lower inflation rates and a larger number of tokens unlocked, indicating better tokenomics. Additionally, Avalanche burns more coins than Aptos, contributing to a lower supply and potential price appreciation.
Considering the value metrics and fundamentals, the TVL to MC ratio suggests that Aptos is more overvalued, while Avalanche appears undervalued and offers potential for growth based on fundamental value.