In many ways, the crypto bear market adage about building was ideal for Aptos.
It diverted focus from blockchain tokenomics, which drew much criticism for being unveiled the day after mainnet launched in October. A common refrain on Twitter at the time was that after raising $350 million at a valuation of more than $4 billion, Aptos should have been quicker to share details on how its native APT token had been distributed .
Now, after months of hosting hackathons and securing partnerships, the Aptos Foundation is planning a network upgrade and overhauling its tokenomics with the aim of creating more transparency.
“We’re going to provide a bit more clarity and more detail behind the principles and how we came to the decision we made,” Aptos CEO Mo Shaikh told Decrypt. “But a lot of that comes down to thinking about the people, so we’re going to have a pretty detailed document that will eventually go live.”
“Tokenomics” is a portmanteau of tokens and economics and in plain language refers to the properties of a cryptocurrency that determine its value, such as: B. their supply and distribution. Shaikh did not share any further details on how the team will bring more clarity to its tokenomics or whether the update will change how tokens have been distributed so far.
Currently, APT has a total supply of 1 billion tokens. Of this, 51% is earmarked for community initiatives such as B. Developer grants and incentives to bring more users to the network. Another 16.5% was earmarked for the Aptos Foundation itself.
That’s 675 million tokens for these two categories. Of that, 130 million was immediately available when the Aptos network launched in October – 125 million for community efforts and 5 million APT for the foundation. The rest will be unlocked monthly over the next 10 years.
The remaining APT tokens were split between the main contributors, who received 19% of the APT supply, and the investors, who received 13.48%. These are the remaining 355 million APT tokens. Both groups are subject to a 4-year blocking period during which they cannot sell their tokens. But they can stake them with validators — the entities whose hardware keeps the network running — and earn interest.
Over time, staking rewards will increase the overall supply of APT tokens. Between monthly unlocks and validator rewards, there are currently 162 million APT tokens in circulation, according to CoinGecko.
All these details were only available less than 24 hours before the token started trading on exchanges like FTX, Coinbase and Binance. This is why Aptos — and its investors, including FTX Ventures, Coinbase Ventures, and Binance Labs — have received so much criticism.
“Certainly listing something should be a requirement so that users have the basic information about what they are buying,” Up Only podcast host Cobie wrote on Twitter.
Shaikh also said that the Aptos mainnet will be getting an update soon, although he didn’t specify when. Shaikh said the next version of Aptos will focus on “improving performance, continuing to offer scalability and also thinking about more efficiency in gas fees”.
In fact, during a recent Aptos developer call on Twitter, someone remarked that the network had “reopened the testnet faucet.” It incentivizes developers by giving them APT tokens for running code on the blockchain’s test network.
APT has attracted some attention lately, but not because of the testnet. According to CoinGecko, it started the year trading at $3.48 and then surged 385% to $16.90 on Friday.
At least some of the price action appears to be related to arbitrage traders, who have used the APT listing for higher prices on South Korean exchanges than anywhere else in the world, and Binance, which is launching two APT liquidity pools that reward users for Deposits pay their tokens.
“There aren’t many tokens out there right now. Also, you still have a large amount of short exposure,” Tom Dunleavy, senior research analyst at Messari, told Decrypt. “So I think it’s just a short push – a lot of it – in addition to some degree of speculation.”
Investors can “short” a token like APT by opening a derivative contract to bet against it. Simply put, if the price goes down, they make money. If it goes up, they lose money. A short squeeze occurs when an asset appreciates in value due to a large number of traders “squeezing” out those short sellers.
A few months ago there was a lot of interest in shorting APT. Outcry over the delayed release of his tokenomics resulted in traders lining up to sell them.
Despite this, Aptos had partnered with Google Cloud by November. The company also runs a validator on the Aptos network, but the tech giant doesn’t play favourites. A Solana validator is also running.
One of the big drivers behind Aptos’ recent momentum has been the Move programming language, originally developed at Meta (formerly Facebook) for its Diem blockchain. When the project ended, Shaikh and co-founder Avery Ching, who had been working on Diem’s Novi wallet, were able to start their own project.
As of December, Aptos had a total of 248 developers contributing to open source projects in its ecosystem. That’s a 755% increase from the same point in 2021. But the ecosystem still has a long way to go if it wants to catch up with Solana, which had a total of 2,082 developers, according to data from venture capital firm Electric Capital as of December.
Founded in 2018, Electric Capital owns the decentralized exchange dYdX and the centralized exchange Kraken. The firm is not an Aptos investor, but noted in its developer report that the blockchain has one of the fastest growing developer stables.
“I suspect a lot of that is local in the developer community,” Avichal Garg, co-founder and partner at Electric Capital, told Decrypt in an email. “They do a lot of great events, for example. This also means that many engineers are enthusiastic about Move as a programming language.”
A key feature of the Move programming language was that it was particularly easy to learn for developers who were already familiar with Rust, the language used to write smart contracts on Solana – the Goliath of Aptos’ David.
“From the developers I spoke to, it’s about a very quick transition from Rust to Move,” said Messari analyst Dunleavy. “And Move is very expressive in terms of things that developers can do. So it’s quite attractive there.”
At the moment the Web3 developer community is small enough that there is intense competition between projects.
“If you look at the Web3 space, there might be thousands or tens of thousands of developers,” Shaikh said. “That’s relatively small compared to the rest of the developers in the world who are counted in the millions.”
Since its inception, Aptos has been dubbed the “Solana Killer” because it aims to solve the same problems as Solana. And Solana itself, launched in 2019, was supposed to be an Ethereum killer. Since then, Solana has been the faster and cheaper blockchain for transactions, but it’s also been plagued by network outages.
Two of the most important metrics that blockchains compete with are speed and cost, which is why there has been so much talk about Aptos’ claims of 130,000 transactions per second. As for gas fees, or the cost of completing a transaction on the network, Aptos wrote in December that this will be a key area of development in the first half of this year.
Shaikh also teased that the Aptos Foundation has been discussing partnerships with gaming and social media companies, saying both will be big focuses in 2023.
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