What is Aptos?

Aptos is a Layer-1 blockchain project that focuses on delivering a more efficient, scalable and user-friendly platform for decentralized applications and smart contracts. This article will provide a comprehensive overview of Aptos by exploring its history, examining how it works and discussing its use cases.

History and development of Aptos

Aptos has a unique origin story in that it was initiated by developers who were previously part of Facebook's blockchain initiative, known as Diem (formerly Libra). Diem aimed to create a stablecoin and a blockchain network that could facilitate global financial inclusion. However, due to regulatory challenges and strategic shifts, Facebook shut down the Diem project.

Following the discontinuation of Diem, former Meta engineers Mo Shaikh and Avery Ching  co-founded Aptos Labs in 2021 with the goal of providing “universal and fair access to decentralized assets for billions of people.” The connection to a major tech giant like Facebook adds a layer of credibility and expertise to the Aptos project. The company raised $200 million in March 2022 from investors like a16z, Tiger Global and Multicoin Capital, and a further $150 million in July 2022 from FTX Ventures and Jump Crypto.

Aptos launched its mainnet in October 2022 after months of rigorous testing. Early testnet users were rewarded with an airdrop, with Aptos announcing a 20 million APT airdrop representing 2% of the initial 1 billion token supply.

In early 2023, Aptos announced a grant program to provide $20 million to artists who create on its blockchain. The move came after an investment into the popular Indian social media app Chingari. Aptos made several investments and partnerships to drive developers and users to its platform amidst stiff competition from Layer 1 blockchains.

In 2024, Aptos partnered with major tech and finance firms, including Microsoft, Brevan Howard, and SK Telecom, to build its institutional platform Aptos Ascend.

How does Aptos work?

Aptos leverages a unique blockchain architecture designed to enhance performance and scalability and has several notable features. 

At its core, Aptos uses a novel consensus mechanism known as "BFT-Proof-of-Stake," which combines the benefits of Byzantine Fault Tolerance (BFT), or the ability of a distributed system to continue functioning and reach consensus despite the presence of faulty or malicious nodes that may act unpredictably or provide false information, and Proof-of-Stake (PoS). This approach ensures a high level of security while maintaining energy efficiency. 

Aptos is also built on the Move smart contract programming language, initially developed by Meta's Diem team, which supports a parallel execution engine called Block-STM to boost transaction throughput, potentially reaching up to 160,000 transactions per second (tps). Block-STM incorporates a modular framework that supports the parallel execution of multiple transactions simultaneously rather than a linear, sequential approach. This reduces bottlenecks and optimizes resource utilization, enhancing the network's throughput and transaction speeds.

Aptos’s native token, APT, is used to pay for transaction fees, for governance, and is required to be held by validators under the Proof of Stake consensus mechanism, similar to Ethereum or Solana.

What is its use case?

Aptos is designed to serve a wide range of use cases within the blockchain and cryptocurrency ecosystem. Its primary focus is on enabling the development and deployment of decentralized applications dapps. These dapps can span various sectors, including finance, supply chain, gaming and social media. By providing a scalable and efficient platform, Aptos aims to attract developers who require high-performance infrastructure for their applications.

Moreover, Aptos is positioned to facilitate the creation of decentralized finance (DeFi) solutions, such as lending and borrowing protocols, decentralized exchanges, and stablecoins. Aptos' emphasis on security and speed makes it an attractive option for DeFi projects seeking a fast and reliable blockchain foundation.

Further, the Aptos Ascend initiative seeks to harness the infrastructure of the Aptos blockchain to offer scalable solutions for financial institutions — capable of processing high volumes of transactions efficiently and securely. It includes advanced digital asset controls and sophisticated network controls tailored for institutional needs.

What are Aptos competitors?

Aptos operates in a competitive landscape with several notable Layer 1 blockchain projects aiming to solve similar challenges. Key competitors include:

1. Ethereum: As the leading platform for dapps and smart contracts, Ethereum is Aptos' most significant competitor. Ethereum’s congestion issues have opened the doors to competitors like Aptos who offer faster and cheaper transactions.
2. Solana: Known for its high throughput and low transaction costs, Solana offers a scalable solution for dapps and DeFi projects. Solana's performance metrics are comparable to those of Aptos, making it a strong competitor.
3. Polkadot: With its focus on interoperability and connecting multiple blockchains, Polkadot presents a unique value proposition. Aptos and Polkadot both aim to create scalable and interconnected ecosystems, albeit through different approaches.
4. Avalanche: Avalanche is another high-performance blockchain that emphasizes low latency and high throughput. Its consensus mechanism and network structure make it a competitor in the same niche as Aptos.