Contributor, Benzinga
January 31, 2023

Have you run into APT in a hunt for the hottest cryptos of 2023 and wonder what Aptos is? Look no further.

Aptos is an innovative, venture-capital-backed crypto project that was built by former Meta Platforms Inc. (NASDAQ: META) engineers. Though still in the early stages, the proposed features of Aptos have already created shockwaves in the crypto industry – generating life-changing wealth for savvy investors that got in early. 

Since the start of year, Aptos has skyrocketed by more than 500%, solidifying itself in the top 30 cryptocurrencies by market capitalization. Aptos aims to compete against Ethereum and other blockchain networks by supporting a scalable ecosystem that doesn’t sacrifice reliability or safety.

The following discussion will explore how Aptos works, how the project compares to competitors and whether Aptos has the potential to sustain its growth heading into the future.

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Overview of Aptos

Aptos is a Layer 1 blockchain that employs a unique smart contract programming language called Move, which was developed by the same engineers that previously worked on Diem (formerly Facebook) blockchain. 

Layer 1 blockchains are the foundation or core layer of a blockchain network. They are responsible for maintaining the security of the network, verifying transactions and creating new blocks of data. As the underlying infrastructure, Aptos serves as the foundation on which other decentralized applications (dApps) are built on.

In technical terms, Aptos operates under a proof-of-stake (PoS) consensus mechanism to power its blockchain. Aptos’ PoS design can achieve a theoretical transaction throughput of over 150,000 transactions per second (TPS). Currently, the team aims to reach 10,000 TPS in the short term and is taking promising strides toward reaching 100,000+. 

APT is the native token of the Aptos network. The current use cases for APT include:

  • Governance: Participation in on-chain community governance (the decisions made regarding the direction and development of Aptos)
  • Network fees: Pay for the transaction fees on the network
  • Validator staking: Participate in network consensus and secure the blockchain.

Why Do People Use Aptos?

Currently, there isn’t much real utility with Aptos. The project is still in its early stages of development and is yet to achieve many of the milestones set out in its roadmap. 

The lack of activity on the Aptos blockchain is reflected by its meager $60 million in total value locked (TVL). Aptos’ TVL pales in comparison to multiple competitors, many of which with a lower market capitalization. Ethereum, the market leader, has a TVL of $28 billion, while Fantom, a project with half the market cap of Aptos, has a TVL of $500 million.

TVL is a metric that measures the value of assets that are locked into decentralized finance (DeFi) protocols on a blockchain. It is a great way to examine the health, and amount of money held on a blockchain.

Aptos History

Aptos is the brainchild of Avery Ching and Mo Shaikh, both former employees of Meta and current members of Aptos Labs – the diverse team of strategists, developers and engineers  behind Aptos. 

Ching and Shaikh worked together on the Diem blockchain project at Meta. Ching was a principal software engineer, leading several of Meta’s innovative development projects. Shaikh specialized in scaling products and has extensive experience in venture capital and private equity markets. When Meta decided to end the Diem project, Shaikh and Ching joined forces to build Aptos Labs. 

Aptos Labs is on a mission to create the safest and most reliable network in the cryptocurrency industry. Its dedication to creating an infrastructure with these qualities has attracted immense support. Despite being a relatively new player, the company has raised $350 million in funding, launched its developer test net and successfully processed millions of transactions across thousands of nodes.

Notable partners include venture capital firm Andreessen Horowitz (a16z), crypto heavyweights like Multicoin Capital and Tiger Global, and most recently, Binance Labs. 

Where to Buy APT

APT can be traded on major exchanges such as Gemini, Binance.US (or Binance for non-U.S. investors), OKX, and KuCoin. Many of these platforms allow you to purchase APT using your credit card, through swapping features or via trading pairs such as APT/USDT or APT/BTC.

Aptos Blockchain vs. Other Blockchains

Aptos faces intense competition within the Layer 1 sector of the industry. Notable competitors include Binance Smart Chain, Avalanche, Tron, Cardano, Polkadot, Near Protocol and most importantly Ethereum – the second-largest crypto by market capitalization (by a large margin). It is for this reason that Layer 1 projects besides Ethereum are referred to as “Ethereum Killers.”

Ethereum possesses over 50% of the total value locked (TVL) across all Layer 1s, followed by Tron and Binance Smart Chain with 10% each respectively. Ethereum is the undisputed gold standard, boasting the largest ecosystem of dApps and a strong historical track record.

However, despite Ethereum’s dominant market share, many critics point to Ethereum’s lack of scalability as a fatal weakness – a weakness that will likely magnify as cryptocurrency becomes more widely adopted by the mainstream. This factor ultimately provides an opportunity for competitors to take market share away and position themselves as substitutes in the long term. 

Aptos is positioned to compete against Ethereum by offering a far superior level of scalability. The Aptos team claims that the network has the potential to process over 150,000 TPS. By comparison, Ethereum aims to achieve 100,000 TPS in the future. 

Aptos’ high theoretical transaction throughput is made possible through a unique parallel execution engine. Its system enables Aptos to process transactions simultaneously and validate afterwards, meaning that failed transactions can be either aborted or re-executed without holding up the entire chain. 

The most significant difference between Aptos and other blockchains is Aptos’ native programming language Move. The Aptos team claims that Move offers several advantages to Solidity, the native programming language of Ethereum, including increasing modification of private keys, modular design and verification. However, time will tell if these claims hold true since Aptos is still in the early stages of its development.

How to Store APT Safely

APT can be stored using hardware wallets or software wallets. Software wallets, such as Exodus Wallet and Trust Wallet, enable users to easily manage their cryptocurrency, including buying, selling, swapping and lending through the internet. Conversely, hardware wallets, which keep private keys offline, are considered the most secure way to store APT. Hardware wallets cannot be hacked through cyber attacks or phishing schemes. 

Given the increased security, it is best practice to store long-term APT holdings in hardware wallets. The Ledger Nano S Plus is an industry-leading hardware wallet that provides top-notch security and a user-friendly experience. It supports APT and 1,800+ altcoins such as Ethereum (ETH), Avalanche (AVAX), Polygon (MATIC) and all ERC-20 (and BEP-20) tokens.  

So, is Aptos a Good Investment?

As it currently stands, Aptos is a hyped cryptocurrency project that still has a lot to prove. While the team has raised an impressive amount of capital and created a compelling narrative for the future, the reality is that Aptos is still quite small compared to blockchain behemoths such as Ethereum.

If Aptos Labs manages to continually execute future milestones, increasing transaction speed and the size of the ecosystem as promised, there is no telling where the price of APT will go.

Disclosure: ²Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts
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