Aptos: A Home for High-Performance DeFi

On October 18, 2022, the Aptos mainnet went live, marking the emergence of another significant blockchain in the Web3 space. A year has passed since the launch of the Aptos mainnet. Aptos is a continuously evolving blockchain, where engineers are committed to optimizing performance, reducing costs, and enhancing decentralization and security. The progress Aptos has made since the investment from Bixin Ventures in 2022 convinces us that it is one of the prime choices for DeFi projects.

Key Points:

1. DeFi demonstrates a more open and efficient model and is the future of finance. It challenges and replaces traditional finance by enhancing financial efficiency and democratizing assets, presenting enormous opportunities for future development.

2. Aptos uses the Move language, aiming to achieve 160,000 TPS and sub-second finality blocks according to its roadmap, while maintaining low costs suitable for DeFi deployment. The developer-friendly Move language allows for parallel execution and Diem-BFT consensus. Aptos is currently the blockchain with the lowest latency and highest throughput in the market (according to Messari).

3. With 850,000 followers and over 200 projects developed on Aptos, its robust infrastructure supports DeFi development. The Aptos community has grown to 850,000 enthusiasts, and basic tools like wallets, explorers, security audits, bridges, and domain services make it convenient for developers to create and deploy DeFi applications.

4. Multiple generous Grants programs aid DeFi and other types of projects. The Foundation’s grant program, along with the recently launched Registry Program, offers numerous opportunities for developers on Aptos. Additionally, there are more DeFi reward programs, including initiatives launched by Aptos with Google Cloud and the DeFi incentive program Thala Foundry by Aptos and Thala.

5. Many well-known DeFi projects are already deployed on Aptos. For users, numerous DeFi projects such as Pancake, Thala, Amnis Finance, and Merkle Trade are already operational. Additionally, projects like Sushi and Econia are set to launch their mainnets in Q4.

Unlimited Potential in DeFi

We all know that Web3 will change the way the world uses the internet. But in this realm, decentralized finance (DeFi) is particularly revolutionary, poised to disrupt the opaque, centralized traditional financial system established over decades.

Centralized exchange meltdowns have prompted a shift towards DeFi

In centralized exchanges, users entrust their funds to the platform, effectively lending assets to the custodian, making the user a creditor of the platform. The centralized operational nature has made people aware of the potential risks of such exchanges.

Why are users turning to DeFi? Firstly, for asset security. The advent of DeFi allows users to control their assets through private keys, meaning no one can misappropriate their funds, significantly enhancing security. Secondly, users enjoy a degree of privacy as no personal information is required, separating wallets from real identities. Thirdly, users can experience and utilize a variety of chain-based DeFi applications, such as DEXs, stablecoins, perpetual contracts, lending, on-chain payments, yield aggregators, and liquidity staking.

As of 2021, 23.8% of adults globally still don’t have a bank account

According to the World Bank, as of 2021, only 76.2% of the global population aged 15 and above had a bank or mobile account, meaning that 23.8% of the population (15+) still lacks access to financial services. The World Bank’s annual report in 2023 also pointed out that an estimated 574 million people will remain in extreme poverty by 2030. Although there are many factors leading to poverty, the lack of financial services is a significant contributor.

In 2021, the global population with bank accounts accounted for a certain percentage, according to the World Bank database.

For these reasons, we believe the development of DeFi is not a short-term phenomenon, but rather it is showing a long-term positive trend. In fact, as of October 24, 2023, the 24-hour trading volume of DEX (Decentralized Exchange) was $5 billion, which, while only accounting for 1.7% of the total trading volume, represents a 42% increase compared to the daily average of $3.5 billion in 2022. Additionally, the average monthly trading volume of DEX has also exceeded $10 billion.

DEX Monthly Average Transaction Volume

Source: DefiLlama & A16Z

Stablecoins, serving as the foundational transaction currency in DeFi, have also exhibited a rapidly growing trend. As of now, their issuance scale has surpassed 120 billion U.S. dollars. This further demonstrates the demand for a decentralized, value-stable U.S. dollar asset.

The Scale of Stablecoin Issuance on the Blockchain. Sources: The Block, Coin Metrics, DeFiLlama.

The development of DeFi, which holds such potential, inevitably requires a secure, high-performance, and cost-efficient public blockchain. On this blockchain, reliable and innovative DeFi applications will flourish. We believe that in the next wave of DeFi innovation, Aptos is the most promising public blockchain.

Aptos is prepared for the next wave of DeFi growth, with upgradable features ensuring its continuous iteration.

In its early stages, the Aptos tech stack was designed by the top 30 blockchain engineers from the Meta team. Over the following three years, a total of 292 developers and dozens of communities participated in the development and proposal improvements of the protocol. Compared to other blockchains, Aptos has more distinct advantages in terms of security, scalability, cost, decentralization, and infrastructure. It is especially suited for DeFi applications with a large user base and high value.

It’s important to note that since the launch of the mainnet, the Aptos team has implemented monthly upgrades to smart contracts. The team collaborates with developers, listens to their needs, and actively assists in addressing these needs. Therefore, continuous improvements in performance, cost, decentralization, and ecosystem are expected. In the coming months or years, significant changes in Aptos can be anticipated. In the Aptos Improvement Proposals (AIP), one can witness the extensive updates that have been made so far.

The Move language & Diem-BFT consensus ensure sufficient security for DeFi

Aptos, diverging from other blockchains, adopts the Move language to ensure blockchain security. Move is a language specifically created for digital assets, defining them through Resources. It abstracts four attributes of resources: replicability, indexability, discardability, and storability. Through different combinations of these attributes, users can conveniently define any type of resource. Additionally, the Move language offers verifiability, flexibility, and composability of contracts.

The security of the Move language is evident as it provides code verifiers and VM-level protection to prevent modifications and attacks by other programmers. It’s designed without incorporating any blockchain-specific content into the core language. Furthermore, Move Prover prevents errors during smart contract development. In summary, the Move language is specifically designed for smart contract development, combining simplicity with security, and altering the rules for Dapp construction.

Moreover, the team has designed a high-performance, low-latency BFT engine, which has undergone four iterations to date. As long as BFT validator nodes remain honest, the Aptos chain will not fork, regardless of network inaccessibility or damage to non-secure core components. The security of the consensus protocol has also been audited and verified.

Since its mainnet launch, Aptos has completed over 100 million blocks. Additionally, in July this year, the weekly transaction volume on Aptos reached 4.9 million and continues to rise.

Since its mainnet launch, Aptos has successfully completed over 100 million blocks. Source: Aptos Explorer

We believe that DeFi, as the cornerstone of value in the Web3 world, must rely on an underlying public blockchain that is sufficiently secure. Aptos is one of the most suitable choices for DeFi development teams.

With capabilities like 160,000 TPS, block finality under one second, and transaction costs below 0.01 U.S. cents per transaction, Aptos supports a vast number of DeFi users.

Currently, most blockchains have actual TPS figures in the double digits. However, for DeFi applications to achieve adoption by millions or tens of millions of users and handle daily transactions in the billions or trillions, the underlying public blockchain needs extremely high throughput and low latency. Insufficient throughput of the public chain can significantly limit the development of DeFi.

Aptos achieves a high throughput of 160,000 TPS by decoupling consensus and execution and through innovations like parallel execution and Diem-BFT consensus. This performance ranks first among current mainstream public chains and is significantly better than Ethereum L2’s performance. The 160,000 TPS also provides a broader development space for DeFi applications.

Compared to other L1/L2 chains, Aptos boasts extremely high throughput. Source: Official website or Explorer

Block time is also a crucial factor for DeFi developers when choosing a public chain for deployment. Currently, Aptos can achieve block times of less than one second, with ongoing improvements. According to Messari, Aptos is the blockchain with the lowest latency and highest throughput in the market today.

Actual block time of less than one second on Aptos. Source: Aptos Explorer

Mainstream L1/L2 final block time. Source: Explorers of various public chains

Compared to centralized finance, expensive transaction fees often hinder the adoption of DeFi users. Through continuous efforts by the Aptos team, such as separating execution costs and storage costs and supporting refunds for storage fees, transaction costs have been reduced to below 0.01 U.S. cents per transaction, significantly lowering the transaction costs for DeFi users.

Transaction costs below 0.01 U.S. cents per transaction on Aptos. Source: Aptos Explorer

113 validators spread across 25 countries and 50 cities globally ensure sufficient decentralization for DeFi.

One of the core narratives of Web3 is decentralization. Aptos has done extensive work in this area, attracting more validation nodes to join the Aptos ecosystem. As of October 25, 2023, Aptos has achieved 113 validation nodes spread across 50 cities in 25 countries, with a total value of over 5 billion U.S. dollars and 886,683,319 APT staked in the network. The number and geographical distribution of validator nodes ensure the network’s decentralization and security.

In future developments, Aptos will attract more nodes to join, making the Aptos network more decentralized and secure.

Validators spread globally. Source: Aptos Explorer

850,000 followers and over 200 projects are currently developing on Aptos, with a robust infrastructure supporting DeFi’s growth.

The development of DeFi applications is inseparable from the ecosystem of the public chain. Aptos boasts a large base in both its user and developer communities. Currently, the total followers on media platforms like Twitter, Discord, Medium, and Telegram exceed 850,000 and continue to grow. There are over 200 active monthly developers in the ecosystem, and great companies like Microsoft, Google, Mastercard, and Franklin Templeton have already partnered with Aptos.

Although the number of active monthly developers has declined since the beginning of this year due to pessimistic sentiments, there has been significant growth compared to early 2022. We believe that as Aptos continues its monthly upgrades and optimizations, more and more developers will join.

Monthly active developers on Aptos. Source: Developerreport

In terms of infrastructure, Aptos already has wallets, explorers, development tools, security audits, bridges, domain names, and other types of projects. DeFi developers can directly collaborate with other projects within the community, significantly reducing the cost of acquiring partners.

During Token20249, Aptos announced a collaboration with Google Cloud, including running validators on Google Cloud, co-hosting accelerators and hackathons, and focusing on supporting the developer ecosystem on Aptos.

Additionally, Aptos is exploring digital payments and asset tokenization in collaboration with Microsoft. Furthermore, Aptos will utilize Microsoft’s Azure OpenAI Service. After using Azure OpenAI, Aptos will launch Aptos Assistant, a secure and user-friendly digital assistant that can answer questions related to Aptos.

Multiple high-value grant programs support DeFi and other types of projects

The Aptos Foundation has launched infrastructure and application grants to encourage more projects to join the Aptos ecosystem. The grants, aimed at Developer Toolings, SDKs, Libraries, Documentation, Guides, DeFi, NFT, Gaming, and other applications, can be applied for through Aptos’s application link. Grant amounts range from 5,000 to 50,000 U.S. dollars. The Registry has already listed 7 projects that will be deployed on Aptos.

For the artist community, Aptos has launched the Artist Grant Program to support the next generation of artists in the Web3 world.

In addition, Aptos has established an accelerator program with Google Cloud to support web3 entrepreneurs and developers. Outstanding projects will receive APT token rewards and Google credits.

Recently, in September this year, Aptos and Thala announced the launch of a 1 million U.S. dollar fund to encourage the development of native DeFi on Aptos. As supported native DeFi projects launch and grow, the fund will expand to 5 million U.S. dollars. Each project can receive up to 250,000 U.S. dollars in rewards, and 5 outstanding projects will receive additional guidance in GTM, development assistance, investor referrals, and more. Applications are welcome.

Numerous renowned DeFi projects are deployed on Aptos

Currently, Aptos’s official website showcases 23 DeFi applications, including Pancake, Thala, Merkle Trade, Amnis Finance, Sushi, Econia, and others. Here are some additional projects:

DeFi projects on Aptos. Source: Aptos Ecosystem

Sushi

Sushi, a well-known DeFi project, will deploy its first non-EVM version, Sushi V2, on Aptos in the coming weeks. Before the partnership with Aptos, Sushi was deployed on EVM chains like Ethereum, Polygon, Arbitrum, BNB Chain, etc. This collaboration represents a milestone in the cooperation between EVM-based DeFi applications and Move-based public chains, crucial for advancing Sushi’s cross-chain and multi-chain objectives.

Econia

Econia has implemented an atomic matching engine, utilizing Aptos’s sub-second finality to settle trades at the moment they enter. From spot trading to leveraged perpetual futures, Econia aggregates liquidity for maximum capital efficiency. Safe, decentralized, permissionless, fully on-chain, and always open-source, Econia is the foundational layer for next-generation DeFi and the ideal settlement engine for any digital asset.

Aptos Labs has actively supported the development of DeFi projects, participating as a supporter in their seed round of financing, which amounted to $6.5 million. Econia is set to launch in November and will feature four different front-ends: Kana, Pontem, Aries, and SwapGPT.

Merkle Trade

Merkle Trade is a decentralized trading platform for cryptocurrency, foreign exchange, and commodities, utilizing a liquidity pool model with leverage up to 1000 times. Its goal is to become the largest decentralized leverage trading platform, offering every user a delightful trading experience.

Compared to other AMMs, Merkle Trade’s first unique feature is its gamified experience. Users can accumulate experience points during trading and improve their ranking on the leaderboard, while also unlocking rewards. Another feature is the availability of foreign exchange and commodity trading pairs, with forex trading fees as low as 0.0075%. This allows users to trade three types of assets on a single platform.

Currently, Merkle Trade’s mainnet has gone live. Everyone is welcome to experience it and enjoy the various rewards awaiting them.

Merkle Trade’s trading interface comes from the Merkle Trade official website.

Thala

Thala is a native DeFi protocol on Aptos, having already launched its mainnet. Thala offers two products: a stablecoin (Move Dollar) and an AMM (Thala Swap). The Move Dollar (MOD) is generated by over-collateralizing a basket of on-chain assets, including LSD derivatives, LP Tokens, Deposit Receipt Tokens, and RWAs.

Thala Swap is an AMM that allows for dynamic adjustment of LPs, supporting Weighted Pools, stablecoin pools, and LP incentive pools, among others. It expands the use cases of the MOD stablecoin. Additionally, a LaunchPad built on Thala Swap provides individual users with a method to participate early in projects.

In October last year, Thala announced a successful fundraising of $6 million. In September this year, Thala and Aptos jointly launched a $1 million DeFi incubation program, also inviting DeFi teams to apply.

Amnis Finance

Amnis Finance is a liquid staking project similar to FRAX, offering up to 7% in staking yields. The model of Amnis Finance is akin to Pendle, wrapping yield-generating assets (stAPT) into SY (standardized yield tokens). Then, SY tokens are split into principal and yield components, labeled as PT (Principal Token) and YT (Yield Token), respectively. In this process, the yield is tokenized into a separate asset.

The mainnet of Amnis Finance is already live.

Amnis Finance Staking Page - Source: Amnis Finance Official Website

Join the development of the great Web3 applications within the Aptos ecosystem today! Follow Aptos on Twitter and Medium, and keep an eye on job postings for exciting opportunities. Bixin Ventures will continue to support the expansion of Aptos’ ecosystem in the Asia-Pacific region.

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