Aptos makes full-scale entry into Japan, CEO interview, how to win in the intensifying L1 competition

Author: Takayuki Masuda, Kazuki Watanabe

Several leading blockchains are exploring expansion in Japan. One such example is Aptos, a Layer 1 blockchain based on Meta's (formerly Facebook's) global stablecoin initiative Libra, later renamed Diem.

Mo Shaikh, CEO of Aptos, who spoke at the IVS Crypto/JBW Summit in Kyoto, Japan (July 4-6), talked about the history of Aptos, its technological strengths, and inquired about its development in the Japanese market and the potential of blockchain technology in the financial and gaming sectors.

-Many leading blockchains have entered Japan and Japanese companies are hesitating which one to choose. How do you see the competition among blockchains, especially among the first layer chains?

First, let me explain our position. Having worked in traditional financial institutions such as BlackRock, I understand how the financial system is supposed to work.

In 2017, when the ethereum ecosystem was just emerging, he joined ConsenSys, an ethereum developer, at a very early stage and started to dabble in the crypto asset (virtual currency) space. They realized that blockchain technology could be of great value in various industries such as the financial system and gaming. So we started product development very early, but the protocols were very slow and very expensive at the time. After that, I decided to join Facebook's Libra. Facebook (at the time) had 3 billion users and recognized the need to build blockchain completely from scratch.

It was created using a proprietary development language called Move and implements the consensus mechanism currently being upgraded and used in Aptos. Other companies involved in the project include PayPal, Visa, Uber, Shopify, and eBay, and while it didn't come to fruition at Facebook, the technology it fostered, as well as the core development team that spun it off, is still being inherited by Aptos today, and continues to expand even after the network's October 2022 launch.

In 2023, we made over 50 improvements. No other blockchain can compete with us in allowing the blockchain to evolve as user needs grow. We studied the last 10 years of Web3 and built a blockchain completely designed from the ground up to evolve for the next 100 years. The team consists of 155 people. Most of them are based in the Bay Area, but there are also great teams in Asia like Korea and Hong Kong, and a community team in Japan. We're looking to develop this technology not only with Web3 startups, but also with Web2 companies that are building next-generation payment systems or looking to integrate NFTs and digital assets into their games.

Do you have a particular market in mind, such as finance or gaming?

All industries will benefit from blockchain. Based on this, our market entry strategy is divided into four categories. The first is finance, the second is gaming, the third is media and entertainment, and the fourth is social.

In the area of media and entertainment, we announced a partnership with NBCUniversal two weeks ago. NBC also owns theme parks, movie ticket sales site Fandango, movie review site Rotten Tomatoes, and streaming services. However, the user experience (UX) for each platform is fragmented. So we're working with NBC to see if we can unify the UX across the different platforms. In Korea, we're also working with Rakuten.

In the game space, we have a partnership with Korean game developer Supervillain Lab. They are implementing the Web3 community in their games, including collectible NFT characters. This is a very fresh way for the community to experience and benefit from Web3 gaming. They are using Aptos because they are developing games that cannot be implemented on other blockchains. Our protocol can complete a transaction from Tokyo to California in less than a second. That's faster than Visa or PayPal, and faster than anything else. This means you can exchange game items faster. Transaction costs are only about 0.0005 APT, less than a penny. There's also a feature called "Keyless" that allows users to use the blockchain without having to understand complex mechanics like seed phrases and key phrases. Technology that has been cultivated since the days of Facebook/meta is now being brought into the game.

Finance is one of the most promising categories. The traditional system for transferring money and stocks and managing complex financial instruments is very expensive and very slow. The system was built decades ago and the world has changed dramatically since then. mechanisms such as ACH (Automated Clearing House: the dominant payment method in the U.S.), SWIFT (Society for Worldwide Interbank Telecommunication), and DTCC (Depository Trust and Clearing Corporation) are no longer part of today's dynamic markets. Therefore, we have built a system called Aptos Ascent. This allows you to maximize speed and cost-effectiveness while protecting privacy.

In Japan, the company plans to expand its workforce to include community managers. We're looking for developers, entrepreneurs, or others responsible for building the Aptos community. I think the startup community in Japan is growing. We look forward to working closely with many organizations and regulators. The Japanese are aware of Aptos. In Japan, it was recently listed on two exchanges: OKCoin and SBI VC Trade.

What do you think characterizes this region of Japan?

Of course, in addition to hardware, Japan has been the center of the world in other major areas such as finance and gaming. In discussions with global gaming companies headquartered in Japan, we focus on tools that can help them build in-game digital asset processing mechanisms on our blockchain. With the recent announcement of Sony's acquisition of Amber, things are moving in the right direction. We want to continue the discussion in the gaming category. Of course, finance is also important. I won't name names, but if you talk to major financial institutions around the world and in Japan, you'll see that they are watching what's going on with Web3 and are ready to start doing business with them. We can work with partners in other regions such as the U.S. and Asia to share our lessons learned. This will enable Japanese companies to catch up quickly and perhaps even take the lead in some areas. I also have high hopes for Japan's startup community. I plan to spend a lot of time on it in the future.

There are many young people in Japan who aspire to be the next Sony.

Even big companies like Sony were startups at one point. Founders created great products during a turbulent time in history and made incredible progress as a result. The Japanese market deserves a sense of resilience and ingenuity. I look forward to seeing that strength return in new ways.

--How do you view Japan's financial sector?

In Japan, securities-based tokens (ST) and stablecoins (SC) are getting attention and growing rapidly, with major financial institutions entering the market. However, in many cases it is not a public chain. Do you still see this as a target despite it being a sensitive market? Firstly, blockchain technology will greatly benefit everything from payments and money market funds to complex financial products, securities and bonds. This is because issuance is much cheaper and easier to manage. It is highly transparent and interoperable. Dividend payments and back-end adjustments can be made more smoothly. We are working with U.S. financial institutions and Brevan Howard, a multi-billion-dollar asset management firm, on the Aptos Ascend I mentioned earlier, and we are also in talks with some of the major banks in Japan, and we look forward to seeing what happens next.

What kind of use cases do you envision? From a financial perspective, on-chain currency is probably the simplest case. The restaurants I've been to in Tokyo that serve delicious French toast have a hard time accepting only cash and PayPay. i downloaded PayPay to try it out, but since I don't have a Japanese ID, I couldn't use it. I ended up telling the waiter, "I don't have any cash on hand, so I left my cell phone, I'll be right back, please wait." Me." And then ran to the ATM. This may not be a good experience for tourists/visitors. If blockchain enables easier-to-use digital payments, it will have a huge impact. However, this is just a starting point and the need for a variety of financial products may arise in the future.

--In order to penetrate the masses, easy to understand use cases are needed. What kind of collaborations can you think of? For example, the integration of the wallet with messaging apps like Telegram is an interesting case. We want to make the wallet more part of the everyday experience. You can use it while browsing the internet, using TikTok, or shopping in your neighborhood. We also created a mechanism similar to Keyless that I mentioned before. So, for example, if a large e-commerce company builds a wallet on the Aptos blockchain, users will be able to seamlessly make payments within the e-commerce company's economic zone. Wallets are important, but they don't have to stand out on their own. The wallet should sit in the background and be ready to transact at all times. In addition, it must be implemented safely and securely. This is a very difficult task that our team is undertaking. We have to do better with security, keyless management and future additions.

Many Japanese users want to know which chain to use. Why should organizations choose Aptos?

Just because we're latecomers doesn't guarantee that the first companies will survive. Technology is constantly evolving, especially in the early days. Battery technology and cloud technology are also completely different than they were 30 years ago. Many of the companies that built cloud infrastructure 30 years ago no longer exist, and the market is now dominated by latecomers such as Google, Amazon and Microsoft. When choosing a chain for a Japanese company, it is important to understand what the chain can and cannot do. Aptos has an uptime of 99.99%. it is also the fastest protocol on the market as far as latency is concerned. The game went live on Aptos about a month and a half ago, and in 24 hours it had 154 million transactions. This is a new world record for a Layer 1 chain, and Aptos' network has not experienced any performance issues. Aptos' performance is orders of magnitude better than other Layer 1 chains. For organizations, choosing a protocol is not just about choosing the technology, it's about choosing a partner for the journey. Fortunately, we have a customer-centric and customer-focused perspective, including our experience at Facebook. It can support many companies' businesses. As I mentioned before, we also work with NBCUniversal and some of the world's largest financial institutions. We hope to be a partner to many Japanese companies in the future. The Japanese developer community has a very unique opportunity. We want them to be as bold and courageous as the founders of today's multinational companies. Mitsui & Co. and Sony both started as startups, and they both had brave founders. If you can take risks, experience many failures and mistakes, and accept them, you will eventually achieve great success.

｜Interview/Photography: Takayuki Masuda

｜Fumi: Kazuki Watanabe