Multicoin Capital Partner: Why are we investing in the Aptos public blockchain?

Original Author: Kyle Samani, Partner at Multicoin Capital

Original Title: “Move Move Move”

Compiled by: Hu Tao, Chain Catcher

Broadly speaking, there are two ways to think about scaling blockchains: breaking them down into smaller pieces and trying to connect them, or optimizing and scaling a single shard.

Rollups and sharding are the main examples of breaking blockchains into smaller pieces. These approaches create several second-order problems:

1. They break composability
2. They increase latency
3. They increase technical complexity for developers
4. They increase social coordination costs among many uncoordinated developers
5. The cross-chain applications they create are inherently fragile

Another approach is to optimize and scale a single shard. The main issue with this approach is that, at a fixed point in time, the overall system performance must have a certain upper limit (however, hardware continues to get faster).

The crypto industry has built this debate in a relatively binary way. But there are nuances. These approaches are not mutually exclusive. While most in the industry have traditionally advocated for breaking state into multiple pieces, we advocate for optimizing single shard performance to enhance UX, DX, and maximize the design space for composable crypto applications. This belief led us to invest in Solana three times during 2019 and 2020, and it rapidly emerged in 2021. This brought us to Aptos.

I am pleased to announce that Multicoin Capital participated in the $200 million strategic financing of Aptos Labs. This round was led by a16z crypto, with participation from Katie Haun's fund, Three Arrows Capital, ParaFi Capital, IronGrey, Hashed, Variant, Tiger Global, BlockTower, FTX Ventures, Paxos, Coinbase Ventures, and others.

Aptos Labs is building a new Layer 1 blockchain focused on security, scalability, and upgradability. The team is led by Mo Shaikh and Avery Ching, two key builders of Meta's Libra/Diem and Calibra/Novi. Unfortunately, Diem was blocked from launching, preventing their work from seeing the light of day. Mo and Avery did not abandon their years of work; instead, they left Meta to build a new network called Aptos (which fittingly means "people") on the open-source Diem codebase. After leaving Meta, Mo, Avery, and many core developers from Diem and Novi came together to form one of the most impressive teams in the crypto space.

It is important to note that Meta and the Diem Association are not investors in Aptos. No one from Meta— including David Marcus, Mark Zuckerberg, or any current Meta leadership— has invested in this project. This separation is significant. However, given the maturity of the team and technology, it is not starting from scratch. In fact, as part of today's financing announcement, several brands, including Anchorage, Binance, Blockorus, Coinbase, Livepeer, Moonclave, Paxos, Paymagic, Rarible, and Streaming Fast, have expressed plans to build on Aptos in the near future.

The Aptos team believes in scaling single shard performance as described above. In addition, Aptos technology prioritizes several key aspects:

• Given how easy it is to write flawed smart contracts, security is paramount. It is clear that the code written today will be used to protect trillions of dollars in value in the coming years. Since the programming language Move used by Aptos was released three years ago, it has been widely praised as an excellent VM and development environment. It rivals the efficiency of Rust and C++, while offering many security features that make it harder to write vulnerable smart contracts. Additionally, the Move Prover makes formal verification of Move contracts very straightforward, providing very strong security guarantees. We have always believed in the importance of optimizing and stubbornly maintaining a solid development environment, and we believe that Move will become one of the most important development environments in the coming year.
• Hotstuff consensus, which is currently in its fourth major iteration. Like Move, Hotstuff has also been well-received and formally verified. Hotstuff is fast, provides battle-tested security performance, and has low overhead.

Building an organic community around a new public chain is challenging. Given our experience with Solana, we learned that one of the best things a Layer 1 team can do is to launch with a custom programming environment, rather than just another EVM chain. Move is an outstanding technology, and we believe it will attract developers from diverse technical backgrounds and accelerate the growth of the crypto ecosystem more broadly.

Due to its emphasis on security, we believe it will help many developers and companies break free from constraints and build. No one wants to be the person advocating for a project that ultimately becomes riddled with bugs and causes people to lose money. Meaningful Move reduces this risk, and we hope many developers will write their first smart contract in Move deployed on Aptos.

Aptos has hundreds of millions in R&D funding and is a mature technology. Developers can start building on the Aptos testnet beginning March 15. Aptos will launch an incentivized testnet and mainnet in the second and third quarters of this year. The Aptos team already has over 20 people, and with years of familiarity with this codebase, they are moving quickly and hiring like crazy.