Aptos Explained in All Its Aspects: Technology, Token Economics, Network Activity, Ecosystems

By Peter Horton, L1 Protocol Analyst

1. Key insights

• Aptosis an L1 blockchain designed around the core principles of scalability, security, reliability and scalability. It was born out of Meta'sDiemand Novi programs, which came out in October 2022.
• Aptos' technology stack features many novelties, such as the AptosBFTv4 consensus mechanism, the Quorum Store memory pooling protocol, the Block-STM parallel execution engine, and the programming language Aptos Move.
• Since July 2023, Aptos has processed an average of over 475,000 transactions per day with over 72,000 daily addresses. Network activity was driven by a one-day public art creation campaign on social media platforms Chingari, oracle Pyth and Graffio.
• Aptos Labs and the Aptos Foundation have partnered with a number of high-profile companies and groups, such as Microsoft, Aliyun, NPIXEL, Rakuten Group, Coinbase Pay, and many more, with many of the growth plans focused on the Asia-Pacific region.

The debate about modularity vs. integration is rotten, and in short, both sides tend towards a similar endgame: modular chains were initially optimized for verifiability and decentralization, while integrated chains were optimized for low latency and high throughput.

Aptos is one of the biggest players in the integration camp, and its development team, Aptos Labs, has raised around $400 million. Since going live in October 2022, the network has rapidly escalated to over 40 AIPs and 8 major releases.The Aptos ecosystem is relatively young, but already has projects like an on-chain order book, perp DEX, and a social media platform. In a recent mainnet test environment, Aptos achieved a peak of 30,000 TPS and over 2 billion daily transactions, with a goal of exceeding 1,000,000 TPS. if it can continue to make technological upgrades to attract developers and users, Aptos is sure to be a success.

2. Background

Aptos was born out of Meta's Diem and Novi projects.In 2019, Meta (then known as Facebook) officially announced the upcoming launch of a blockchain-based payment network. The project consists of the permissioned chain Diem (initially called Libra) and the Novi wallet (initially called Calibra). Development is led by Diem Association and Facebook subsidiary Novi Financial. Diem and Novi were never released due to regulatory resistance.Diem sold its assets to Silvergate Capital in 2022.1 In September 2022, Meta announced the end of Novi.

Founded in December 2021 and officially launched in February 2022, Aptos Labs was co-founded by Mo Sheikh, Head of Strategic Partnerships at Novi, who led strategy at Consensys and founded blockchain-based real estate platform Meridio, and the latter has a background in supercomputing. The rest of the founding team consists of PhDs, researchers, engineers, designers and strategists, many of whom have also worked at Diem or Novi.

In March 2022, Aptos Labs announced a $200 million fundraising along with the launch of its public devnet and open source codebase. The funding, which included stock and token options, was led by a16z, with participation from Multicoin Capital, ParaFi Capital, Coinbase Ventures, and many other investors.In July 2022, Aptos Labs announced another funding round of $150 million at a valuation of $2 billion, led by FTX Ventures and Jump Crypto.FTX Ventures also participated in the first round of funding; its investment is now managed under the control of the FTX bankruptcy process.Further strategic investments from Binance Labs and Dragonfly Capital bring the total funding to approximately $400 million.

In Aptos Labs released the Aptos whitepaper in August 2022 and went live in October 2022 on the mainnet. Prior to the public release of the full token economics information, centralized exchanges increased their support for APT, the native Aptos token, and some expressed concerns about this.Mo Sheikh candidly acknowledged these concerns in a tweet the following day. Since going live on the mainnet, the Aptos network has completed several upgrades and is now at v1.8.0. The non-profit Aptos Foundation leads the development of the Aptos ecosystem.

3. Technology

The Aptos technology stack is designed around the core principles of scalability, security, reliability and scalability. It brings new mechanisms to Aptos in many ways.

(1) Consensus

Aptos is a Delegated Proof of Stake (DPoS) L1 network using the AptosBFTv4 consensus protocol.

(2) AptosBFT

AptosBFT (originally called DiemBFT) went through four iterations during Diem and was then used in the license-free Aptos blockchain. The first AptosBFT was based on HotStuff, which itself was based on the traditional Practical Byzantine Fault Tolerance (pBFT) protocol.Aptos' current deployment - AptosBFTv4 - is now based on the Jolteon, which improves HotStuff latency by 50% with a secondary view change in the form of pBFT.

In addition, to mitigate delays caused by leadership errors, AptosBFT selects leaders not only based on pledges, but also based on performance (in short, "reputation").Validators' performance is used to measure how successful they are as leaders (how often their proposals are submitted) and how successful they are as non-leaders (how often they vote on proposals). Validators' performance is used to measure their success as leaders (how often their proposals are submitted) and as non-leaders (how often they vote on proposals).

In the Aptos V1.5 upgrade, completed on July 18, 2023, the deployment of Quorum Store further increased Aptos throughput.Quorum Store is an implementation of Narwhale, a memory pooling protocol.Quorum Store optimizes consensus by separating data propagation from consensus. The separation of data propagation from consensus was a key finding of the article "Narwhal and Tusk," a research article co-authored by researchers at Aptos Labs and Mysten Labs.

Prior to the Quorum Store, transaction processing went through a memory pool and consensus phase:

• Memory pool phase: all transactions are broadcast to all validators.
• Consensus phase: the LEADER broadcasts all transactions in the block it creates to all verifiers. Non-leaders vote on the block by sending signed block metadata.

This led to two bottlenecks:

• Repeated transaction propagation: all transactions are propagated twice to all verifiers in the memory pool and consensus phases.
• Uneven distribution of work: during the consensus phase, the LEADER accomplishes more work than the non-LEADER because the LEADER has to send raw transactions instead of signed block metadata (relatively small messages). As a result, the total bandwidth is capped at the leader's bandwidth, and the bandwidth of non-leaders is underutilized.
• Store adds an intermediate stage between the memory pool and the consensus protocol. The complete process is now as follows:
• Memory Pool Phase: transactions are no longer broadcast to the verifier, but are sent to the Quorum Store.
• Quorum Store Phase: The Quorum Store protocol receives transactions from the memory pool and packages them in sorted order according to the gas fee. the Quorum Store sends these packages to the verifier. After receiving the transaction packets, the verifier signs the packets and sends them to other verifiers. Once a transaction packet receives more than 2/3 of the verifiers' signatures, the Quorum Store creates a Proof-of-Availability that guarantees the uniqueness and availability of the batch.
• Consensus phase: the consensus protocol is the same, except that the leader now creates blocks using certified transaction packets from the Quorum Store instead of raw transactions from the memory pool.

The above two bottlenecks were solved:

• Repeated transaction propagation: the original transaction is propagated only once (from the memory pool to the Quorum Store), and after that only the transaction packet is propagated, thus reducing the amount of data in the message.
• Uneven distribution of work: during the consensus phase, the LEADER only needs to send the transaction packet metadata (and the corresponding PoAv). This is much less work than in the past and is comparable to the workload of non-leaders. In addition, all validators have equal workload in the Quorum Store phase.

(3) DPoS

Validators are compensated through inflationary pledge rewards. Currently, all transaction fees are burned off. Pledge rewards are tied to the verifier's reputation (pledge and performance). Rewards will be automatically distributed and combined within each epoch (which will last two hours). Pledge tokens are globally locked in a 30 day cycle.

Each validator sets a commission rate and the remaining tokens are passed on to their principals. In-protocol commission pledges are deployed on April 20, 2023 on the main network. Delegates need to pledge at least 11 APT to join. This will allow more of the community to participate in the pledge, and the minimum pledge to participate as a validator is 1 million APT ($10.5 million as of 12/26/2023).

For validators, the pledge is capped at 50 million APT, which is about 51 TP3T of the total supply, which is not a very stringent cap. However, validator operators will be incentivized to launch multiple validation nodes if they receive enough pledges. It is worth noting that locked tokens are also able to be used for pledging and receive a liquidity bonus (after a global 30-day unlock period).

There is currently no forfeiture mechanism for offline or malicious verifiers, but such a mechanism could be added through governance in the future.

(4) Implementation

Once the verifier agrees on the block order, they need to execute the transactions in the block and store the results permanently. Many blockchains have a sequential transaction engine where transactions are ordered and executed one by one. To speed up execution, Aptos uses a parallel execution engine. In addition, unlike other networks that process transactions in parallel, such as Solana and Sui, Aptos does not require prior knowledge of user-declared dependencies.

To do this, Aptos uses Block-STM, which is built on the principles of Software Transaction Memory (STM) and Optimistic Concurrency Control (OCC). STM libraries with OCC follow the generalized framework of executing transactions optimistically (i.e., assuming that no dependencies exist), validating them after execution, aborting in case of dependencies, and eventually executing them again. However, this approach is rarely used in practice due to performance limitations resulting from managing dependencies and cascading rollbacks.

To cater for deployment and overcome these limitations of the OCC STM system, Block-STM utilizes a pre-set order of transactions to evaluate dependencies and reduce the amount of rollbacks.One of the main findings of the Bohm (2014) study is that a pre-set order of transactions can be a good thing, not a curse.Block-STM even more fully utilizes the pre-set order than Bohm by each rollback in the system to refine the dependency evaluation (and therefore reduce the chance of further rollbacks).

Block-STM further improves the generic STM by utilizing aspects of the blockchain, specifically:

• VM Security: Move VM (Move is described in more detail below) ensures that uncommitted status does not negatively impact other ongoing transactions by catching errors and levying gas fees.
• Block granularity: garbage collection is simple because it can be done between blocks. While Block-STM initially only tracked block commitments to reduce synchronization costs, Aptos Labs has since improved the algorithm. It now supports rolling commits within a block, and not at the expense of performance.

Before describing the specific steps of Block-STM, it will be helpful to first explain a term that has already been mentioned - dependencies. Blockchain transactions consist of smart contract code that reads and writes shared memory. At execution time, each transaction has a list of read and write locations (called read-set and write-set, respectively). If Mo's transaction reads from a location in shared memory (first written by Avery's transaction), then Mo's transaction depends on Avery's transaction. Transactions with dependencies must be executed sequentially, in which case Avery executes before Mo.

Knowing this, we can look in depth at the various steps of the Block-STM process, which is divided into five main stages:

Stage 1: Pre-set ordering of transactions

Since the last consensus phase, there exist transaction blocks that contain sequential ordering. As mentioned above, this pre-determined order is a key advantage of Block-STM. A parallel execution result must produce the same rea-set and write-set (read-write set) as a sequential execution result.

Phase 2: optimistic implementation

Block-STM optimistically (optimistically) executes transactions in parallel. In other words, it executes transactions without dependencies.

Stage 3: Validation

The executed transaction is then to be validated, i.e., the dependencies are checked. This is done by re-reading the read-set of the transaction and comparing it to the most recently executed read-set. If the two read-sets are not equal, the transaction is rolled back.

A key part of Block-STM is to continuously schedule execution and verification tasks in an efficient manner, in particular:

• Prioritize tasks in advance in a preset order.
• Schedule validation waves early to detect missed dependencies to avoid cascading rollbacks.

Note that validation is much cheaper than execution, so continuous validation (read-sets and then reads) is not a major bottleneck.

Phase 4: Rollback and re-execution

When a transaction is rolled back, an ESTIMATE tag is applied to the transaction write location. Then, if later transactions read that location, they will see an ESTIMATE tag.While the ESTIMATE tag is being read, the transaction will be suspended until the value overwrites the ESTIMATE tag.This occurs once the original, suspended transaction has been successfully re-executed. Whenever a transaction is re-executed, scheduling ensures that any transactions that are ahead of the preset order and depend on it will be revalidated.

This dynamic dependency management is a key concept of Block-STM. If there is no ESTIMATE tag, the second transaction is executed and then may be rolled back because it reads at a certain write location of the transaction being rolled back. Thus, Block-STM avoids a lot of wasted work in executing transactions that may be rolled back. In addition, Dynamic Dependency Management introduces several improvements to the pre-dependency system. The first is that the user does not have to declare dependencies and supports atomicity for arbitrarily complex transactions (complex transactions do not need to be decomposed). Second, it manages dependencies only when needed, rather than storing dependencies for all transactions. Finally, most of the dependencies are based on a state that is updated compared to the start of the block.

Stage 5: Submission

Once Block-STM detects that the OPTIMISTIC execution output of a transaction is correct, it is committed by the rolling commit mechanism. Rolling commit relies on lightweight synchronization to validate and commit each wave of transactions before processing the next wave.

Block-STM achieved 170,000 TPS in the Aptos benchmark with 32 threads. this is a 17x improvement over sequential execution.

(5) Storage

When a block is committed, its data is permanently stored in the storage layer. While commits are done on a block-by-block basis, each individual transaction is stored separately in the Merkle tree after execution. Everything that happens on the blockchain - including transactions, status updates, and events - can be cryptographically proven based on a digest called the "root hash," which is signed by the current verifier. This digest is authenticated by the signature of the current authenticator. This approach differs from other blockchains, where one would need to trace the blockchain to verify historical transactions, thus allowing access to provable data at a finer granularity.

To handle large amounts of data, Aptos uses two types of Merkle trees: the Jellyfish Merkle tree for storing data on disk, and the in-memory Sparse Merkle tree for fast updates. These trees are optimized to store data efficiently and allow for concurrent updates.Aptos Labs is exploring further ways of scaling storage, in particular storage sharding as detailed in the roadmap section.

(6) Move Language

Move is a bytecode language inspired by Rust and created by the team of Diem and Novi.Move offers greater flexibility and security than Solidity and other Web3 programming languages.

Move consists of two types of programs: transaction scripts and modules. Transaction scripts are atomic and can only be used once, while modules are published in a global state and stored there indefinitely.

Modules are similar to smart contracts in other programming languages. They define resources and their associated processes. A resource is like an object, and a process is an operation that can be performed on the resource, such as creating, modifying, or deleting. Resources are specifically designed to represent scarce assets like tokens. They have built-in protection to help these assets avoid being incorrectly copied or discarded.

Modules enforce data abstraction, where types are transparent within their declaration module and opaque outside the life module. In other words, only the original module can create, destroy, or update values. External access to module data is limited to public procedures that are exposed by the module. These guarantees are enforced during execution by Move's bytecode validator, and all module and transaction scripts must pass through this process before they can be executed by the Move VM. This data abstraction is more pronounced in Move than in Solidity/EVM, which has encapsulation but a less strict implementation.

Move aims to eliminate the attack vectors present in Solidity and EVM, especially those due to the lack of first-class assets other than Ether and re-entry (re-entrancy) attacks.

• First-class assets: on EVM, ERC-20 and other assets do not have the same built-in scarcity and access control attributes as Ether. solidity developers need to implement these protections manually to avoid introducing bugs that lead to replication, reuse, or loss of assets. in contrast, all resources on Move (not just native assets) are treated as having these protections First-class assets.
• Reentry Attacks: Unlike EVM, Move does not have insecure dynamic scheduling. With insecure dynamic scheduling, the VM (Virtual Machine) does not know what operations are being performed by external contract functions until the contract is running. Dynamic scheduling introduces reentry attacks, which are one of the most prevalent root causes of blockchain hacking, including the recent Curve/Vyper vulnerability attack. In a reentry attack, a contract calls an external contract which calls back to the original contract and updates the balance before the original contract's execution is complete, which can cost money over and over again.

Move's goal is to make it harder for developers to make mistakes. In addition to the bytecode verifier, developers can also use Move Prover, a formal verification tool. Of course, Move doesn't eliminate the possibility of smart contract vulnerabilities. Programmers still need to build proper security invariants into their modules. Furthermore, bytecode verifiers and Move Prover do not replace the need for auditing. Auditing firm CertiK observed several instances where developers did not use Move's built-in protection mechanisms or did not adopt programming patterns, likely ported over from legacy code designs that ran counter to Move's design philosophy.

(7) Other main characteristics

User safety and security

Aptos has several features that optimize user experience and security, including flexible key management, transparency of transaction results and light client support.

Aptos accounts separate private and public keys for flexible key management. Users can rotate their account private keys to pre-empt or respond to attacks without transferring all assets to a new account. Users can also set up their accounts for multi-signing with different permissions for each public key. For example, a user can create an account with two hot public keys that can sign transactions and one cold public key that can sign transactions but also rotate private keys. The user could then specify that 2/3 of the account keys are needed to sign transactions.

To prevent phishing attacks and increase transparency, wallets can use transaction pre-execution to explain transaction results in a readable format before the user signs.

Aptos also enhances transaction security by adding expiration times and sequence numbers to transactions. Sequence numbers function similarly to random numbers (nonces) on EVMs and help prevent replay attacks.

The light client allows one to easily verify the blockchain state by downloading only the block header. This minimizes trust assumptions when accessing blockchain data. Doing so is especially important for high-performance blockchains like Aptos with higher node hardware requirements.

scalability

Aptos is designed to support frequent protocol upgrades. This is in large part due to the fact that the validator management is on-chain, allowing the validator to easily synchronize to new upgrades.A part of Aptos itself is written in the Move language, which reduces the time to market, as described above. Since its release, Aptos has implemented about 46 optimization recommendations.

4. Token economics

(1) Overview

Aptos' native token APT is used for security and resistance to Sybil attacks (validator and delegator pledges), resource consumption (transaction fees) and on-chain governance. Initially, 1 billion APT was allocated into several baskets with different lockup periods. there is no fixed supply of APT and the current annual inflation rate is 6.8951 TP3T. all transaction fees are currently burned off.

(2) Initial distribution

As mentioned earlier, only 1 billion tokens were initially distributed. Additionally, 131 TP3T of tokens were left unlocked at the outset, and the remaining tokens were distributed according to the distribution schedule. The exact distribution is as follows:

• Ecosystem (51.021 TP3T of total initial supply): the largest share of the initial APT allocation is geared towards ecosystem development. About a quarter of these tokens were unlocked during the genesis phase, and the remainder were unlocked linearly every month for the next 10 years. Prior to distribution, approximately 80% of these tokens were held by the Aptos Foundation and the remainder by Aptos Labs. The APT airdrop in the Genesis phase distributed more than 20 million tokens to over 110,000 participants from the ecosystem as a basket.
• Team (191 TP3T of the total initial supply): these tokens were distributed to Aptos Labs on the following four-year distribution schedule: a one-year lock-up period, unlocking 6.251 TP3T per month for the next six months, and then unlocking 2.0831 TP3T per month for the next 30 months.Please note that if Aptos Labs employees join after Genesis, they will still be subject to the same four-year distribution schedule.
• Foundation (16.51 TP3T of the total initial supply): These tokens were distributed to the Aptos Foundation, of which 31 TP3T (5 million tokens) were distributed during the founding phase, and the rest were distributed according to the same four-year distribution schedule as the tokens distributed to the team. The foundation plans to use the tokens to organize events, aid legal support, and sponsor research. Among other plans, the foundation will cover operating expenses to help validation node operators and to advance a more decentralized geographic distribution of validation nodes.
• Private Investors (13.48% of the initial token supply): these tokens will be distributed to private investors in Aptos Labs, Inc. who choose to purchase the tokens and adhere to the same four-year distribution schedule as the Team and Foundation token distributions.

As noted above, APT inflation occurs as pledgers receive consistent returns. In the first year after creation, the annual inflation rate is set at 71 TP3T, then declines by 1.51 TP3T per year (i.e., 6.8951 TP3T in the second year) until it stabilizes at 3.251 TP3T.Note that this rate is set based on an initial total supply of 1 billion APT and is subject to governance.

The unlocking schedule for the initial APT distribution is designed to avoid a major unlocking event.The most dramatic increase in the supply of APT liquidity will occur during the six-month unlocking period from mid-November 2023 to mid-April 2024.The unlocking period will begin in mid-April 2024, when the team and private investors will begin unlocking tokens. This period begins with the unlocking of tokens for teams and private investors. During this period, the supply of liquidity tokens for the initial distribution (i.e., excluding staking rewards) will increase by approximately 601 TP3T, from 209 million to 334 million.

Locked tokens can be pledged and receive liquidity rewards. Since in-protocol delegation didn't kick in until mid-April, airdrop recipients and other smaller token holders were diluted for the first six months online on the mainnet unless they self-coordinated to pool more than 1 million tokens.

5. Networking activities

(1) Utilization rate

After the excitement of the network's launch, network utilization (as measured by transactions and active addresses) declined until July 2023 when it picked up. Since then, Aptos has processed an average of over 475,000 transactions per day with over 72,000 daily active addresses. Several factors have contributed to the rise in utilization, including the integration of social media platforms Chingari and oracle Pyth.

Chingari is a video-sharing mobile app, similar to TikTok, with over 100 million downloads on the Google Play Store. It was originally released as a Web2 platform in 2018, and has since added on-chain features such as virtual gifts.

Pyth integrated with Aptos on July 13th, bringing with it its low-latency price feeds.Since July 13th, Pyth has accounted for about 17.71 TP3T of Aptos' total volume. Note that this volume size is not uncommon for the network on which Pyth resides.

On October 19th, the daily address surpassed 600,000, driven by Graffio's public art creation campaign. To celebrate the first anniversary of the network's launch, Aptos contributors invited community members to paint on a public digital canvas for 24 hours. Each individual painting was registered as an on-chain transaction. Participants then received an NFT version of the final canvas. The campaign brought in 605,000 unique addresses and 1.3 million transactions.

The growth in activity brought on by Graffio caused a network outage and block production was halted on October 18th. The incident was resolved in approximately five hours, and the Aptos Foundation published a report on October 20 identifying the root cause of the incident as non-deterministic code, stemming from an August 22, 2023 performance-focused code change to the Aptos core codebase.

Recent trading activity has been driven by inscriptions, a common trend on many blockchains.The NFT marketplace BlueMove launched the APT20 standard in mid-December.On December 23rd and 24th, there were 6.8 million trades, largely due to APT20 casting.

(2) Security and decentralization

As of December 26, 2023, the Aptos Network had 123 active verifiers from 27 countries and 54 cities. The number of validators has gradually increased since the network's launch, with an initial number of approximately 100 validators. The validator network currently has a Nakamoto coefficient of 18, which is higher than the median of other networks. Since the Aptos Foundation holds a large portion of the total token supply, it can help to distribute the equity fairly equitably among the validators.

There are a total of 907 million pledged APTs (valued at $9.8 billion as of December 26, 2023), representing 84.61 TP3T of the total APT supply.As noted above, locked tokens are available for pledging and receiving liquidity rewards. Relative to its circulating supply, 961 TP3T of tokens are in a pledged state.On October 5, Coinbase Cloud performed an APT authorization to its verifiers and added APT pledges on Coinbase Prime.

6. Ecosystems

(1)DeFi

In just over a year since its introduction, the Aptos DeFi protocol has amassed nearly $127 million in TVL from 32 protocols, ranking 26th in TVL across all networks.Aptos' DeFi TVL has come from five main protocols; Thala Labs, Liquidswap, Aries Markets, PancakeSwap and SushiSwap.

Thala sits atop the dominant Aptos protocol with $43M in TVL, holding a market share of 45%.Thala offers a suite of DeFi products, including a CDP, an AMM, a liquidity pledge protocol, and a token issuance platform.Thala is also currently developing the governance tool Parliament.It raised $6M in its FY22 raised $6 million in a seed round in Q4 and launched the governance token THL in late March '23, going live on the mainnet shortly thereafter. Its CDP mints Move Dollar (MOD), with a total of 8.3 million flow tokens as of December 26, 2023.Both MOD and THL are on-chain alternative tokens (OFTs).OFT is a multi-chain token standard created by LayerZero Labs that is interoperable across chains with the Alternative Token Standard.Most of MOD's overcollateralization support is based on LayerZero as well as the Wormhole-based USDC.

Right at the end of the third quarter, Thala announced a partnership with the Aptos Foundation to form the Thala Foundry, a DeFi incubator.The Foundry received $1 million in initial funding and will allocate between $50,000 and $250,000 to the Aptos DeFi program, as well as other developer and business development support.

LiquidSwap was one of the first AMMs to run on Aptos. It was developed by Pontem Network, which also developed the Pontem wallet for Aptos. It has $20 million in TVL and 21% of market share.

Aries Markets is a lending and margin trading protocol. It was launched shortly after the launch of the Aptos mainnet and has recently shown significant growth in TVL, which jumped from less than $2 million in October 2023 to more than $11 million. Last December's growth brought Aries' TVL to nearly $20 million, capturing 20% of market share. This follows the launch of Aries' Econia-powered trading product at the end of November.

Econia, an on-chain order book engine that took shape during the inaugural Aptos 2021 hackathon, launched in late November. Earlier this year, it secured $6.5 million in seed funding in a round led by Dragonfly. In addition to Aries, Econia's infrastructure currently supports trading on Kana Trade, Gator Trade (developed by Pontem), SwapGPT and Hippo Labs.

BNB Chain's top DeFi protocol, PancakeSwap, launched AMM on Aptos. from the end of 2022 to mid-July 2023, PancakeSwap was the Aptos protocol with the highest TVL. However, it is now in fourth place with 61 TP3T of market share.

In late November, SushiSwap released V2 AMM on Aptos, making Aptos the first non-EVM supported by SushiSwap.To date, SushiSwap has nearly $5 million in TVL and 5% of market share.

Since the cost of not pledging is about 7% of dilution, the liquidity pledge agreement is critical to continue to grow Aptos' DeFi ecosystem.In late October, the liquidity pledge agreement Amnis Finance was released. It is now the leading liquidity pledge agreement on Aptos in terms of TVL, with nearly $33 million in TVL, ahead of Thala's $23 million TVL liquidity pledge agreement. To incentivize growth, Amnis has launched a points program that will be used for airdrops against its upcoming tokens.

Other projects and integrations are available:

• Merkle Trade: Merkle Trade is a perp DEX that launched at the end of Oct. Since its launch, Merkle Trade's total trading volume has exceeded $277 million.
• Oasis Pro: In mid-November, Oasis Pro integrated with Aptos in a FINRA (Financial Industry Regulatory Authority) registered marketplace.

(2) Consumers

socialize

As mentioned above, Chingari is one of the most popular apps on Aptos in terms of transaction volume and active addresses. Other social apps running or coming soon are TowneSquare and Overmind.

TowneSquare went public in August 2023 with plans to build it. It is building a mobile app that integrates with on-chain activity and authentication systems to support on-chain social feed, ticketing, whitelisting, affiliate marketing, and other use cases.

Overmind is the first platform to focus on Quests: a platform where developers can compete in coding challenges and rewards to earn rewards and on-chain credentials. overmind has partnered with the Aptos Foundation to offer developers around $50,000 in rewards through its Quests. in mid-October it opened early access to its open source, decentralized social network, and soon after launched its "Race to Keys" program to encourage developers to build friend.tech-style key functionality. In mid-October, it opened early access to its open-source, decentralized social network, and shortly thereafter launched its "Race to Keys" program, which encourages developers to build friend.tech-style keying capabilities.

play

Gaming has been another core consumer area of focus for Aptos Labs and Foundation. At the end of February, Aptos Labs released a game software development kit (SDK) for development building on Unity, one of the most popular game engines.Aptos Labs is also developing a verifiable on-chain randomness module, a key aspect of games and other applications.AIP-41 proposes to create a new Move module to enable developers to easily add on-chain randomness to their smart contracts. Once implemented, a hackathon focused entirely on building with on-chain randomness will be planned.

While many of the games are still in the development stage, a few have already gone live. At the end of October, the arcade-style shooter Aptos Arena was released with more than $10,000 in first-week bonuses. It attracted over 12,000 addresses in its first weekend and is being updated based on feedback from initial players.

Aptos Labs and the Aptos Foundation have partnerships with several well-known gaming companies and conglomerates, including:

• NPIXEL: NPIXEL is a Korean AAA gaming company. It entered into a partnership with Aptos Labs in Q4 2022 to bring its METAPIXEL games to the Aptos network, concluding the second demo of its upcoming game Gran Saga Unlimited in Q3 2023.
• NEOWIZ: NEOWIZ is a South Korean game development and publishing company.The Aptos Foundation partnered with NEOWIZ and its Web3 subsidiary Intella X in mid-August.
• MARBLEX: MARBLEX is the Web3 subsidiary of Netmarble, the largest handheld game company in South Korea.MARBLEX partnered with the Aptos Foundation at the end of August to develop the MARBLEX WARP Bridge and integrate its multi-chain game with Aptos. The bridge will connect Aptos with MARBLEX's existing ecosystem, including its MBX token and game NFT.
• Lotte Group: Lotte Group is one of the largest retail conglomerates in South Korea. Lotte Group established a partnership with the Aptos Foundation at the end of August to bring its subsidiary Dahon Communications' Bellyland to Aptos.
• Readygg: Readygg is an infrastructure company that aims to bring Web2 players into the Web3 world. It works with Web2 game publishers to help integrate their games with Web3. Through Aptos' efforts, four publishers - Minijuegos, ToroFun, CimuGames and Aeria Canada - plan to integrate with Aptos by the end of the year.
• BlockGames: BlockGames is building a cross-chain, cross-game network of games and players. It recently announced plans to integrate with Aptos.
• GuardianLink: Aptos Labs has partnered with GuardianLink to integrate its Jump.trade NFT marketplace, which gives users access to Meta Cricket League NFT games.

NFT

Since launch, NFT has traded approximately $19.4 million in volume, with most of the activity centered shortly after launch. More than 74% of that volume was done through the Topaz marketplace. Since its launch on August 1, Wapal has captured 151 TP3T of volume compared to Topaz's volume market share of 501 TP3T. Wapal is an NFT marketplace for "professional traders", similar to Blur and Tensor, that uses a points system to incentivize activity and will be used for airdrops. Wapal most credentials recently launched a no-code NFT distribution platform.

NFT volume has increased since the launch of the APT20 standard on December 10th.BlueMove accounted for 41% of NFT volume, totaling $674,000 in volume.

NFT on Aptos is also used in several real-world use cases.KYD Labs is a Web3 ticketing company. It provides ticketing services for a number of live events, including the WonderBus Music Festival and SEOULBOUND, the closing event of Korea Blockchain Week.Aptos Labs has twice partnered with NBCUniversal to launch digital fan experiences for the films Renfield and The Exorcist: Believer. In early November, the Aptos Foundation partnered with South Korean amusement park and media conglomerate Seoul Land.Seoul Land's digital subsidiary, RXMeta, will be launching a new experience for festivals on Aptos called Bloom, powered by NFT ticketing and memberships.

At the end of August, Aptos Labs launched the Aptos Digital Asset Standard (DA).DA focuses on NFTs with features such as dynamic NFTs, soul-bound tokens, lower gas costs, empowering NFTs to own other NFTs, simplified airdrop support, and more.

7. Road map

(1) Technology optimization

As mentioned above, Aptos is designed to support frequent upgrades. To test and highlight several ongoing upgrades, Aptos Labs recently released the findings of Previewnet, a test environment designed to mimic Aptos' main network. From Nov. 6 to 21, the environment supported more than 9 billion transactions, with 2 billion of those transactions occurring within a 24-hour period. Peak peer-to-peer transactions reached 30,000 per second and over 1 million NFT limited collections were minted in less than 90 seconds.

One of the main upgrades to unlock this higher performance is storage sharding, which splits the state store into multiple RocksDB instances. Storage sharding is scheduled to go live on the main network in 2024. Improvements have also been made to the execution engine, state synchronization algorithm, and network stack, which Aptos Labs will detail at a later date.

Optimized NFT casting performance comes from a new solution called Aggregators. Limited-supply NFT casts have long required sequential execution because they are named sequentially (e.g., "Cryptopunk #4317").Aggregators is a novel, conflict-free counting mechanism that enables parallel execution of limited-supply NFT casts! Aptos Labs recently published a blog post detailing Aggregators.

The next goal for Aptos Labs is to first achieve the 100,000 TPS milestone on the journey to achieve over 1 million TPS. In addition to the improvements tested in Previewnet, another major upgrade in development is a new consensus mechanism, Shoal, which combines the features of DAG and BFT to reduce latency while increasing throughput.

Finally, Aptos Labs is developing a new Aptos Move compiler that introduces a number of new language features designed to simplify the coding process and extend functionality. These include receiver-style function calls, first-class higher-order functions, and user-defined capabilities.Aptos Labs expects to implement most of the new features in the first half of 2024.

(2) Growth strategy

In order to grow the Aptos ecosystem, the Aptos Foundation hosted a hackathon and launched a grant program.Aptos Labs and the Aptos Foundation have also established collaborations with many partners. In addition to these two entities, there are other groups conducting growth activities, such as Move Developers DAO (MDD), a developer community based in India. Overall, many of the growth efforts are focused on the Asia-Pacific region.

In addition to the partnerships mentioned in the ecosystem section, Aptos has established relationships with the following key partners:

• Microsoft: In early August, Aptos Labs announced a partnership with Microsoft. The partnership will bring Microsoft Azure AI capabilities to Aptos, starting with the Aptos Assistant, a chatbot designed to help users and developers log into Aptos.GitHub's Copilot feature will also support Aptos Move.
• Google Cloud: Aptos Labs has partnered with Google Cloud on several initiatives and integrations, such as Google Cloud running the Aptos Validator and indexing Aptos data for BigQuery, a gas pedal program offering APT and Google Cloud credits, and co-hosting a hackathon, to name a few.
• Aliyun: In late November, the Aptos Foundation partnered with Aliyun to grow the Web3 developer community in Asia Pacific.The Aptos Foundation became the primary blockchain sponsor of Aliyun's Singapore Innovation Accelerator program, with plans to co-launch the Move developer community in Asia and co-organize a series of hackathons and other events.
• SK Telecom: In early November, Aptos Labs partnered with SK Telecom and its technology partner, Atomrigs Labs, to plan the development of a Web3 wallet service called T Wallet.Aptos is SK Telecom's first non-EVM partner.
• Flowcarbon: In mid-September, the Aptos Foundation partnered with Flowcarbon to make Aptos a carbon-negative blockchain.The Aptos Foundation will purchase and write off carbon credits tokenized by Flowcarbon.
• Coinbase Pay: In mid-September, Aptos Labs partnered with Coinbase Pay to integrate Coinbase's fiat deposit functionality into Petra, a wallet developed by Aptos Labs. in June, the Petra mobile wallet was launched on Google Play and the Apple App Store. in late October, it was integrated with the hardware wallet Ledger integration.

The hackathon and grant programs are listed below:

• Aptos World Tour Hackathon: In 2023, the Aptos Foundation organized hackathons in Seoul, the Netherlands, and Singapore, and plans to hold another one before the end of the year. The prize money for these three hackathons totaled more than $760,000 USD.
• Aptos Grant Program : The Aptos Foundation announced the Aptos Grant Program prior to the launch of the main website in 2022. By early May 2023, the Foundation announced that it had awarded more than $3.5 million in grants to 50 teams and opened a second round of applications.
• ARTIST GRANTS PROGRAM: In April 2022, the Aptos Foundation launched a $20 million grant program for artists and creators.
• REGISTER GRANT PROGRAM: In mid-July, the Aptos Foundation released the Registry Grant Program. The registry lists a number of project ideas, initially including seven projects primarily related to gaming and Move infrastructure. Applications for these seven projects have closed and the projects are in the development phase. The Foundation plans to add new projects on a regular basis.
• Outlier Ventures Accelerator: in early August, Outlier Ventures announced the launch of the Move gas pedal in partnership with the Aptos Foundation. The 12-week program ended in early October, followed by a demo event that month.
• Move Developer DAO (MDD) : MDD has assisted in organizing several hackathon competitions and other events, most recently Indore Blockchain Day, Pune Blockchain Day and REVA HACK.
• ABCDE Highlight: Asia's Web3 Venture Capital and Accelerator Studio ABCDE Highlight has partnered with the Aptos Foundation to launch an Asia-focused grant program that promotes community stickiness.
• Aptos Winter School : Aptos Foundation is organizing a two-week gas pedal event for Indian student developers in late December.
• Galxe Mission: In early December, the Aptos Foundation announced a four-week Galxe-based on-chain mission campaign.

8. Conclusion

Aptos is an L1 blockchain designed around the core principles of scalability, security, reliability and scalability.Aptos was born out of Meta's Diem and Novi projects and is due for release in October 2022.The Aptos technology stack features a number of innovations such as the AptosBFTv4 consensus mechanism, the Quorum Store memory pooling protocol, Block-STM parallel execution engine and the programming language Aptos Move.

Since July 2023, Aptos has processed an average of more than 475,000 transactions per day with more than 72,000 daily addresses. Network activity is driven by social media platforms Chingari, oracle Pyth, and a one-day public art creation event on Graffio. Programs to grow the ecosystem include partnership building, hackathon competitions, grant programs, and more, many of which are geared towards the Asia-Pacific region.