In mid-October 2022, the launch of the new blockchain project Aptos caused a serious stir in the crypto space, marking a rare event of such significant interest. But is Aptos really as promising as it seems?
In today’s article, we’ll delve into what Aptos offers, how one can profit from it, and whether the project is likely to be profitable in the long term.
What is Aptos?
Aptos is a Layer-1 blockchain, whose core principles are scalability, security, reliability, and upgradability. Developed by a team of over 350 developers over the past three years, it aims to rejuvenate the Layer-1 space with new ideas for consensus mechanisms, smart contract design, system security, performance, and decentralization.
Its vision is a blockchain that enables mass adoption in web3 and allows the DApp ecosystem to solve real user problems.
Core Features of Aptos include:
- Built-in Move integration: Move is a programming language based on Rust, designed for fast and secure transaction execution with a focus on security. Aptos reports a current TPS (transactions per second) of 130,000, with a goal of reaching 160,000. For comparison, Bitcoin averages around 5~7 TPS, Solana manages about 3,000, and the VISA payment system handles 24,000.
- Flexible key management and hybrid storage options aim to provide a more secure and reliable user interface.
- Modular transaction processing: Transaction dissemination, block ordering, batch storage, and ledger certification all operate in parallel.
- Atomicity without prior data knowledge enhances throughput and reduces latency.
- Modular architecture allows for frequent and instantaneous updates.
- Innovative solutions for scaling: Supports internal validator segmentation and homogeneous state sharding.
All these features are designed to resolve the blockchain trilemma (decentralization, security, scalability) to facilitate mass Web3 adoption for businesses and enterprises.
About the Hype and Controversial Tokenomics
On October 18, 2022, the Aptos blockchain went live, and trading of its native ecosystem token, APT, started immediately on major cryptocurrency exchanges. The developers began announcing new projects on the network. Let’s break down why it made such a loud entrance and how well the marketing campaign worked:
- Investors: The blockchain attracted $400 million from crypto funds such as FTX Ventures, Jump Crypto, a16z, Multicoin Capital, Dragonfly, and Binance Labs. The involvement of such reputable names led buyers to trust the project even before its launch.
- Negative Publicity: Interestingly, Aptos gained popularity not so much for its innovations—as many promising projects regularly emerge—but more so due to the intense criticism it received for its tokenomics, which were called unreliable and were frequently criticized. Let’s take a closer look at it:
By the end of 2031, the Aptos blockchain will have 1.5 billion tokens, up from the initial 1 billion. The smallest unit within Aptos will be known as an Octa.
Community distribution
Approximately 51% of the blockchain tokens will go to the community, followed by 19% to core contributors, 16.5% to the foundation, and 13.48% to investors. These funds will be distributed among the community over the next decade through grants and other programs. Tokens allocated to investors and significant contributors have a four-year vesting period.
Most experts believe that whales disproportionately dominate Aptos tokenomics. The fact that 82% of APT tokens are staked has raised concerns, suggesting that a significant amount of APT could be sold to retail users. Before the release of the tokenomics summary, several crypto users expressed concern about trading the blockchain’s token starting without this information.
This view is supported, and indeed, a deeper analysis of the project raises concerns about its reliability.
Moreover, many critics mocked the seemingly random distribution of 51% of APT tokens among the «community.» Additionally, opponents welcomed the decision by all exchanges, including Binance, FTX, and others, to include APT in spot pairs on the first day as a clear warning of expected significant volatility.
Easy earnings
This is now a primary reason why Aptos remains in the spotlight. The community was baffled as a massive number of users made substantial money from seemingly nothing. Some earned up to $3,000, others slightly over a thousand. All they did was claim a free NFT in Aptos during its testnet phase. On October 19, the Aptos Foundation launched an APT token airdrop, distributing over 20 million APT among 110,000 users.
Users immediately rushed to find out what the Aptos coin was, and the demand was incredible.
APTOS Launch
It can’t be said that the exchanges greatly contributed to the Aptos hype. They did not run any marketing campaigns but simply listed the token. In the first minute, the price soared to $59, then gradually decreased in spikes and eventually stabilized at around $7-9, where it currently trades.
Alongside the mainnet, several Dapps were also launched on the Aptos blockchain:
Petra Wallet: The first version of Petra Wallet, a free web application as a Google Chrome extension, allows users to store and transfer assets, create and view NFTs, and interact with decentralized applications (dApps) on the Aptos blockchain.
On October 19th, the Aptos Name Service (ANS) was launched, enabling users to use a .apt extension for their Aptos wallet address instead of the public key.
Aptos Explorer: This blockchain explorer allows users to view all transactions, blocks, and validator actions on the mainnet.
The crypto protocol LayerZero launched the Aptos Interchain Bridge, which facilitates the transfer of USDC, USDT, and ETH into the new network from Ethereum, BNB Chain, and other blockchains.
Topaz NFT Marketplace: An exclusive exchange for trading NFTs on APTOS, enhancing the ecosystem’s capabilities in the digital art and collectibles market.
Is Aptos a Good Investment?
Straight to the point: Aptos cannot definitively be labeled as either a good or bad project, but it is certainly high-risk. One can potentially earn big or lose equally fast on Aptos, and here’s why:
- NFTs on Aptos are predominantly flip-driven
Aptos brands itself as a «Solana-killer,» yet it ignores the well-known minting errors seen on Solana. About 95% of all NFT mints on Aptos are greed-driven and aimed at quick profits. There have been numerous examples of degenerate mints accumulating, yet flippers from Solana continue to dive into these. Drawing parallels with Solana, mints with such announced supplies and pricing would likely not be viable on SOL.
For instance, consider the case of Aptos Toad Overload. These are trading at -60% below the mint price and are unlikely to ever sell out with a supply of 6969 NFTs and a mint price equivalent to $85. This scenario illustrates the volatility and speculative nature typical of new platforms like Aptos, which while offering potential high returns, also comes with substantial risk.
- DEX Mojito Markets
Investing a large amount of money into Mojito Markets was quite unwise, with nearly everyone participating. Over 569,000 APT, equivalent to more than $4 million, was invested in a single day. This raises a legitimate question: to whom will the buyers sell these tokens, especially during a public sale involving $4 million worth of tokens, given the current liquidity?
It’s not impossible that this could yield significant returns, but the risk is extremely high.
And these are some of the most apparent reasons for the high risks associated with earning on projects within this network. We must also not forget about the controversial tokenomics involved.
In conclusion
Aptos is an ambitious blockchain with potential but carries substantial risks. Its innovative features aim to address key blockchain challenges, yet the speculative NFT scene and controversial tokenomics highlight its volatile nature. Investors should approach with caution, thoroughly researching and weighing the inherent risks of the crypto market before engaging with Aptos.
