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In just four months since the Aptos (APT) mainnet launched, the novel layer-1 network achieved its all-time high over the weekend. On Sunday, the chain’s native APT cryptocurrency reached $14.48. This is a 368% increase from Aptos’ (APT) all-time-low in December and a 70% increase since its October launch price of $8.5. At a $2 billion market cap, the latest APT rally places the Aptos network as the 31st largest cryptocurrency, just ahead of ApeCoin (APE).
The question is, what is driving Aptos’ rally after a somewhat botched launch in October?
Binance Adds Aptos Liquidity Pools in January
On January 20th, Binance announced that it would launch its much-anticipated Aptos liquidity pools, consisting of APT/BTC and APT/USDT trading pairs. This way, users can add funds into liquidity pools in return for a yield, otherwise known as yield farming. As the world’s largest exchange at $20B daily volume and ~60% market share, Binance is the gateway into crypto ecosystems.
With Binance support established, APT trading and speculation began in earnest. This includes Aptos-based NFT marketplace Topaz. As we have seen with Solana’s BONK surge, trading volumes for Aptos’ NFT collections increased.
Some notable NFT collections on Aptos are AptoPunks, Spooks, BabyApetos, MAVRIK, and Kreachers. If some of them sound familiar, AptoPunks is an Aptos take on the blue-chip CryptoPunks, having the largest trading volume increase at over 2,500%. With AptoMonkeys, BruhBears, and Aptomings, the Aptos network has experienced a surge in user transactions.
Peaking at an all-time high, user transactions reached 176k on Saturday. This was a precursor to Sunday’s all-time-high APT price hitting $14.48. However, this is still far from Ethereum’s daily transactions, which typically reach one million without counting its multiple layer-2 networks.
Nonetheless, Aptos’ NFT trading uptick shows that a significant portion of the crypto market thinks Aptos will become the next Solana. Whether that turns out to be true depends on Aptos reputation in the future.
Aptos Investment Buzz and Facebook Legacy
Last year, Aptos Labs raised $350 million from well-established venture capital (VC) firms. This included not only Andreessen Horowitz, Multicoin Capital, and Circle Ventures but also the now-defunct FTX Ventures, which led Aptos’ July funding round at $150 million.
Former Facebook employees, led by Aptos Labs CEO Mo Shaikh, were primarily responsible for this investment buzz. They had previously created the Diem crypto project for Facebook, formerly Libra, programmed in the Move language designed explicitly for Diem’s customizable transaction logic.
They had also created Meta’s wallet Navi, which has since been canceled alongside Diem. In January 2022, Silvergate Bank bought Diem’s intellectual property and technology assets.
Fundamentals Behind the Aptos Hype
Like Solana aimed to upturn Ethereum’s dominance with next-gen performance, so does Aptos. Without relying on layer-2 solutions, Aptos is a layer-1, proof-of-stake blockchain just like Solana but with a twist. Aptos has a modular architecture and a parallel transaction engine (BlocksSTM) to increase network throughput.
Aptos validators can be active or inactive, with light and full node clients that replicate transactions, while light nodes, such as wallets, maintain validators. This node segmentation, parallel transaction, and concurrent transaction execution allow Aptos to achieve theoretical 160,000 transactions per second (tps).
In real-time, however, Aptos Explorer shows the network’s performance at typically eight tps, averaging at 15 tps over the last month, comparable to Ethereum. Of course, there needs to be a traffic uptick to showcase Aptos’ capability.
Delving deeper into Aptos architecture, its Move language defines two critical cogs – modules and signer objects. Aptos module, as a blockchain-based script, doesn’t store data. Instead, modules call other modules directly without signing transactions. When a transaction is signed, a resource object is created – signer.
As resource objects, signers register transaction data to a wallet address without being able to be copied, i.e., spammed. Therefore, only users’ accounts store resources, which enables both decentralization and security.
Less Than Forthcoming Aptos Tokenomics
Typically, crypto projects announce their tokenomics well in advance, so potential investors know what to expect. Aptos Labs chose to go against the grain. For better or worse, this generated much FUD on social media, with many speculating it was a marketing gimmick.
Aptos raised at a $2B valuation and failed to make their tokenomics information available at launch.
— Aylo (@alpha_pls) October 18, 2022
There is no way this was an oversight.
This was intentional.
After all, the value of each token is highly determined by its emission schedule and total supply. Post-launch, on October 18th, the Aptos Foundation published its tokenomics. APT tokens’ total maximum supply is 1 billion, divided as follows:
- Community 51.02%
- Core contributors 19%
- Foundation 16.5%
- Investors 13.48%
Presently, there are only 159.3 million APT tokens in supply, at ~16% of the total supply. The entire 1 billion APT tokens will be unlocked on October 13, 2032, following its vesting schedule.
Due to the heavy investment of VC firms, they may drive some rallies in the future, just as it happened with Solana. The goal is likely to increase Aptos usage so that APT tokens eventually outpace ETH usage as they are unlocked. Otherwise, the demand would fall back from the unlocked supply, lowering the APT price in turn.
Do you think Aptos has what it takes to become an accurate “Ethereum Killer”? Let us know in the comments below.