Author: Bixin Ventures

On October 18, 2022, the Aptos mainnet went live, marking the emergence of another important blockchain in Web3. As of today, the Aptos mainnet has been operational for a year. Aptos is a blockchain that continues to iterate and grow, with engineers continuously optimizing performance, reducing costs, and enhancing decentralization and security. Since Bixin Ventures' investment in Aptos in 2022, the achievements it has made give us reason to believe that Aptos is one of the best choices for DeFi projects.

Key Points

1. DeFi showcases a more open and efficient model, representing the future of finance

DeFi disrupts and replaces traditional finance by enhancing the operational efficiency of finance and democratizing assets, presenting enormous opportunities for future development.

2. Aptos adopts the Move language, aiming to achieve 160,000 TPS and sub-second final blocks according to its roadmap, with low fees suitable for DeFi deployment

By utilizing the developer-friendly Move language and innovations such as parallel execution and Diem-BFT consensus, Aptos aims to achieve 160,000 TPS and sub-second final blocks, with fees below 0.01 cents per transaction. Aptos currently boasts the lowest latency and highest throughput among blockchains on the market (according to Messari).

3. 850,000 followers and over 200 projects are being developed on Aptos, with a robust infrastructure supporting DeFi development

Aptos has a community fan base of 850,000, and essential tools such as wallets, explorers, security audits, bridges, and domain names (basic tools) make it easier for developers to create and deploy DeFi applications.

4. Multiple high-value grants programs support DeFi and other types of projects

The Foundation Grant Program, along with the recently launched Registry Program, has begun, providing many opportunities for developers on Aptos. Additionally, there are more DeFi incentive programs, including the Accelerator Program initiated by Aptos and Google Cloud, as well as the DeFi incentive program Thala Foundry launched by Aptos and Thala.

5. A large number of well-known DeFi projects have already been deployed

For users, there are currently a large number of DeFi projects deployed, such as Pancake, Thala, Amnis Finance, and Merkle Trade, with projects like Sushi and Econia set to launch their mainnets in Q4.

1. Unlimited Potential of DeFi

We all know that Web3 will change the way the world uses the internet. However, in this field, decentralized finance is particularly revolutionary, with the potential to disrupt the opaque and centralized traditional financial system built over decades.

1.1 Centralized exchange failures drive people towards DeFi

In centralized exchanges, users need to entrust their funds to the platform, meaning they transfer ownership of their assets to the platform, which legally equates to lending their assets to the custodial platform, making users creditors of the platform. The centralized nature of operations has made people aware of the potential risks associated with centralized exchanges.

Why are users turning to DeFi? Firstly, for asset security. The emergence of DeFi allows users to control their assets by holding private keys, meaning no one can misappropriate their funds, greatly enhancing security. Secondly, users can enjoy a certain level of privacy, as there is no need to provide personal information, separating wallets from real identities. Thirdly, users can experience and utilize a rich variety of on-chain DeFi applications, such as DEX, stablecoins, perpetuals, lending, on-chain payments, yield aggregators, and liquidity staking.

1.2 As of 2021, 23.8% of adults globally still do not have a bank account

As of 2021, according to World Bank data, only 76.2% of the global population aged 15 and above had a bank or mobile account, meaning that 23.8% of the population (aged 15+) still lacks access to financial services. Additionally, the 2023 World Bank Annual Report indicates that by 2030, an estimated 574 million people will still be living in extreme poverty. While there are many factors contributing to poverty, the lack of financial services is a significant reason.

Proportion of the global population with bank accounts in 2021 Source: World Bank Database

Based on the above reasons, we believe that the development of DeFi is not a short-term trend but will show a long-term positive growth trajectory. In fact, as of October 24, 2023, the 24-hour trading volume of DEX reached $5 billion, which, although only accounting for 1.7% of total trading volume, represents a 42% increase compared to the daily average trading volume of $3.5 billion in 2022. Meanwhile, the monthly trading volume of DEX has also surpassed $10 billion.

Monthly trading volume of DEX Source: Defillama & A16Z

Stablecoins, as the foundational trading currency of DeFi, have also shown rapid growth, with the issuance scale exceeding $120 billion to date. This further proves the need for a decentralized, value-stable dollar asset.

On-chain stablecoin issuance scale Source: The Block, Coin Metrics, DeFillama

To support the development of such a promising DeFi ecosystem, a secure, reliable, high-performance, and low-cost public chain is essential, which will foster reliable and innovative DeFi applications. We believe that Aptos is the most promising public chain in the next wave of DeFi innovation.

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

In its early stages, the Aptos tech stack was designed by the top 30 blockchain engineers from the Meta team. Over the next three years, a total of 292 developers and dozens of communities participated in the development of the protocol and improvements to proposals. Compared to other blockchains, Aptos has more significant advantages in security, scalability, costs, decentralization, and infrastructure, making it particularly suitable for DeFi applications with a large user base and high value.

It is worth noting that since the mainnet launch, the Aptos team has implemented monthly upgrades for smart contracts, collaborating with developers, listening to their needs, and proactively addressing those needs. Therefore, improvements in performance, costs, decentralization, and ecology will be an ongoing iterative process. It is expected that in the coming months or years, Aptos will undergo significant changes. In the Aptos Improvement Proposals (AIP), you can see a large number of updates that have been made so far.

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

Aptos distinguishes itself from other blockchains by adopting the Move language to ensure the blockchain's security. The Move language is specifically designed for digital assets, defining them through Resources. It abstracts four properties of resources: copyability, indexability, disposability, and storability, allowing users to easily define any type of resource through different combinations of these properties. Additionally, the Move language features verifiability, flexibility, and composability of contracts.

The security of the Move language is reflected in its provision of code verifiers and VM-level protection to prevent modifications and attacks by other programmers. This is because no blockchain-specific content was included in the core language during its design. Furthermore, Move Prover helps prevent errors during the writing of smart contracts. In summary, the Move language is specifically designed for smart contract development, combining simplicity and security, thus changing the rules for building DApps.

Additionally, the team has designed a high-performance, low-latency BFT engine, which has undergone four iterations to date. As long as BFT verification nodes ensure honesty, the Aptos chain will not be forked, regardless of network accessibility issues or damage to non-secure core components. The security of the consensus protocol has also been audited and verified.

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

Over 100 million blocks completed since the Aptos mainnet launch Source: Aptos Explorer

We believe that DeFi, as the cornerstone of value in the Web3 world, must rely on a sufficiently secure underlying public chain, and Aptos is one of the best choices for DeFi development teams.

2.2 160,000 TPS, sub-second final blocks, and transaction fees below 0.01 cents support a large number of DeFi users

Currently, the actual TPS of most blockchains is in the double digits. However, for DeFi applications to achieve adoption by millions or tens of millions of users and daily transaction volumes in the hundreds of billions, the underlying public chain must have extremely high throughput and very low latency. If the throughput of the public chain itself is insufficient, it will greatly limit the development of DeFi.

Aptos has achieved 160,000 TPS through innovations such as decoupling consensus from execution and parallel execution and Diem-BFT consensus. This performance ranks first among mainstream public chains and is significantly higher than the performance of Ethereum L2. The 160,000 TPS also provides DeFi applications with a broader development space.

Aptos has extremely high throughput compared to other L1 / L2 chains Source: Official website or Explorer

Block time is also one of the main factors for DeFi developers when choosing which public chain to deploy on. Aptos currently achieves block times of less than one second and will continue to improve. According to Messari, Aptos is currently the blockchain with the lowest latency and highest throughput on the market.

Aptos has an actual block time of less than one second Source: Aptos Explorer

Mainstream L1 / L2 final block times Source: Various public chain Explorers

Compared to centralized finance, high transaction fees often hinder the adoption of DeFi users. Through the continuous efforts of the Aptos team, such as decoupling execution fees from storage fees and supporting storage fee refunds, transaction fees have now been reduced to below 0.01 cents per transaction, significantly lowering the trading costs for DeFi users.

Transaction fees below 0.01 cents Source: Aptos Explorer

2.3 113 validators across 25 countries and 50 cities ensure sufficient decentralization for DeFi

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

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

Validators around the world Source: Aptos Explorer

2.4 850,000 followers and over 200 projects are being developed on Aptos, with a complete infrastructure supporting DeFi development

The development of DeFi applications relies on the ecosystem of public chains. Aptos has a large user and developer community. Currently, the total number of followers across platforms like Twitter, Discord, Medium, and Telegram has reached 850,000 and continues to grow. The ecosystem has over 200 monthly active developers, and great companies like Microsoft, Google, Mastercard, and Franklin Templeton have already partnered with Aptos.

Although the number of monthly active developers has decreased due to pessimistic sentiment since the beginning of this year, it has significantly increased compared to early 2022. Moreover, we believe that as Aptos continues to upgrade and optimize the public chain monthly, more and more developers will join.

Monthly active developers on Aptos Source: Developer report

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

During Token20249, Aptos announced a partnership with Google Cloud, which includes running validators on Google Cloud, co-hosting accelerators and hackathons, focusing on supporting developers in the Aptos ecosystem.

Additionally, Aptos is collaborating with Microsoft to explore digital payments and asset tokenization. Furthermore, Aptos will leverage Microsoft's Azure OpenAI services. After utilizing Azure OpenAI, Aptos will launch Aptos Assistant, a secure and user-friendly digital assistant that can answer questions related to Aptos.

3. Multiple high-value grants programs support DeFi and other types of projects

To incentivize more projects to join the Aptos ecosystem, the Aptos Foundation has launched grants for infrastructure and applications to encourage Developer Toolings, SDKs, Libraries, Documentation, Guides, DeFi, NFT, Gaming, and other applications. Applications can be submitted through Aptos's application link, with grant amounts ranging from $5,000 to $50,000. The Registry lists seven projects that will be deployed on Aptos.

For the artist community, Aptos has launched the Artist Grant Program aimed at supporting artists in the next generation of the Web3 world.

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

Recently, Aptos and Thala announced the launch of a 1 million dollar fund in September this year to incentivize the development of native DeFi on Aptos. As supported native DeFi projects go live and grow, the fund size will expand to 5 million dollars. Each project can receive up to 250,000 dollars in rewards, and five outstanding projects will receive not only the prize money but also GTM guidance, development assistance, and investor referrals. Come and apply!

4. A large number of well-known DeFi projects have already been deployed on Aptos

Currently, the Aptos official website showcases 23 DeFi applications, including Pancake, Thala, Merkle Trade, Amnis Finance, Sushi, and Econia. Below are some additional projects.

DeFi projects on Aptos Source: Aptos Ecosystem

Sushi

Sushi is a well-known DeFi project, and its first Non-EVM version, Sushi V2, will be deployed on Aptos in the coming weeks. Before collaborating with Aptos, Sushi was deployed on EVM chains such as Ethereum, Polygon, Arbitrum, and BNB Chain. This collaboration represents a significant milestone for the cooperation between EVM-based DeFi applications and Move-based public chains, crucial for advancing Sushi's cross-chain and multi-chain goals.

Econia

Econia implements an atomic matching engine that utilizes Aptos's sub-second finality to settle trades at the moment they enter. From spot trading to leveraged perpetual futures, Econia aggregates liquidity to achieve maximum capital efficiency. Econia is secure, decentralized, permissionless, fully on-chain, and always open-source, serving as the foundational layer for the next generation of DeFi and an ideal settlement engine for any digital asset.

Aptos Labs has also participated as a supporter in its seed round (raising $6.5 million). Econia is set to launch in November, with four different front ends (Kana, Pontem, Aries, SwapGPT).

Merkle Trade

Merkle Trade is a decentralized trading platform for crypto assets, forex, and commodities that uses a liquidity pool model, offering leverage up to 1000x. Its goal is to become the largest decentralized leveraged trading platform, providing a pleasant trading experience for every user.

Compared to other AMMs, Merkle Trade offers a gamified experience, allowing users to accumulate experience points during trading and improve their rankings on the leaderboard while unlocking rewards. Another feature is the provision of forex and commodity trading pairs, with forex trading fees as low as 0.0075%, enabling users to trade three types of assets on one platform.

Currently, the Merkle Trade mainnet is live, and everyone is welcome to experience it, with more rewards waiting for users.

Merkle Trade trading interface Source: Merkle Trade Official Website

Thala

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

Thala Swap is an AMM that enables dynamic LP adjustments, supporting Weighted Pools, stablecoin pools, and LP-guided pools. Thala Swap can expand the use cases of the MOD stablecoin. Additionally, the LaunchPad built on Thala Swap provides individual users with a way to participate in projects early.

In October last year, Thala announced the completion of a 6 million dollar funding round. In September this year, Thala and Aptos jointly launched a 1 million dollar DeFi incubation program, welcoming DeFi teams to apply.

Amnis Finance

Amnis Finance is a Liquid Staking project similar to FRAX, offering staking yields of up to 7%. The model of Amnis Finance is akin to Pendle, where yield-bearing assets (stAPT) are packaged into SY (standardized yield tokens), which are then split into principal (PT) and yield (YT) tokens, effectively tokenizing the yield into a separate token.

The mainnet of Amnis Finance is now live.

Amnis Finance staking page Source: Amnis Finance Official Website