Most recent update: [ October 21, 2022]
No securities regulatory authority has expressed an opinion about the Crypto Contracts or APT, made available on the VirgoCX Platform, including an opinion that APT is not itself a security and/or derivative.
What is Aptos?
Dubbed “Solana killer,” Aptos blockchain aims to provide improved scalability, security, usability, and reliability of the web3 space. The project was developed by more than 350 developers around the globe, some of which worked on Facebook’s Meta prior to switching to Aptos. It offers innovative approaches to smart contract design, consensus, performance, system security, and, above all, decentralization.
Several things make Aptos as a project stand out from the pack, ultimately leading to the popularity of Aptos (APT) — the main cryptocurrency of the Aptos ecosystem. Some of these features are the Move programming language, innovative data model, pipelined and modular approach to key transaction processing stages, support of atomicity for complex transactions, and more.
In short, the Aptos blockchain serves a similar function as Ethereum or any other similar platform, enabling users to build decentralized applications (dapps) and non-fungible tokens (NFT) while maintaining maximum reliability, safety, scalability, and more.
Who is behind Aptos?
The brains behind Aptos are Mo Shaik (Co-Founder & CEO) and Avery Ching (Co-Founder & CTO).
Mo Shaik is also a founder of Meridio and currently serves as an advisor and a board member in several organizations. He was also associated with Meta. Avery Ching has a technical background, having served for ten years as a Principal Software Engineer at Facebook.
The two joined forces to create an upgradable, scalable, and safe blockchain network, improving fair access to decentralization. Many seasoned professionals joined the team, including researchers, strategists, engineers, designers, and more. Apart from the Aptos platform, the team is also credited for creating the Move language and the Bullshark and Narwhal mechanisms that are part of the Aptos protocol.
How does it work?
First, Aptos uses the Move programming language, which shows great safety, flexibility, and performance. One of the major features built with it is the Move prover, used as a formal verifier for smart contracts, safeguarding contract invariants and behaviors. As a result, developers can enhance the protection of their software from harmful attacks.
Moreover, the data model is designed to enable hybrid custodial options and flexible key management, an uncommon sight among new blockchain-based projects. This improves the overall user experience, especially when combined with practical client protocol and transaction transparency.
The high throughput with the minimum possible latency is achieved thanks to a unique approach to the fundamental elements of transaction processing based on pipelining and modularization.
Aptos is designed to support atomicity when arbitrarily complex transactions occur, resulting in even higher throughput and minimal latency for real-world applications.
Finally, the modular architecture design paved the way for client flexibility and instant upgrades, and the embedded change management protocol opened the gate for rapidly deploying new tech innovations and supporting the future use cases for web3.
If you are interested in learning more about the features and the underlying technology, read the official Aptos whitepaper.
The APT Token and Tokenomics
The crypto community considers Aptos’ tokenomics somewhat controversial. Here’s a quick breakdown.
The total supply of APT tokens is set to one billion.
The tokens are distributed as follows:
- Community (51.02%)
- Core contributors (19.00%)
- Foundation (16.50%)
- Investors (13.48%)
However, we should consider that 80% of the community tokens are held by Aptos Foundation, while the remaining amount is in the hands of Aptos Labs. These tokens will be used to support various initiatives by the Foundation, with the rest gradually unlocked on a monthly basis for the next ten years.
Investors and core contributors will have their ATP locked up for four years, with their tokens unlocked according to the schedule specified by Aptos. Therefore, small portions of ATP will gradually become available for circulation, but it’s important to remember that both locked and unlocked tokens will be available for staking on the platform.
Please refer to the official Aptos tokenomics page for additional details.
As mentioned above, the security concerns in the web3 space have been one of Aptos's primary focuses. Therefore, the entire protocol was built with enhanced security in mind.
However secure, Aptos may not be immune to issues. For example, Numen Cyber Technology recently exposed a critical vulnerability in Aptos’ MoveVM (Move Virtual Machine) using its Web3 security vulnerability detection product. Numen was able to simulate an attack that would execute specific codes to cause a crash in Aptos blockchain nodes. The team at Aptos acknowledged this and is working on a solution.
Drawbacks and risks
Aptos faces some risks due to a shaky start after the mainnet launch.
First and foremost, it is a nascent ecosystem. The mainnet was launched on October 18, 2022, with a claimed throughput of 130,000 transactions per second (TPS). In reality, unfortunately, the reported TPS was even lower compared to Bitcoin, which is considered one of the slowest cryptocurrencies at the moment. Such a massive difference in the claimed vs. reported throughput resulted in a sudden 50% price drop at the mainnet launch.
This was just one of the many possible issues that the team behind Aptos might have to tackle, and it’s their promptness and overall capability to overcome the challenges that could affect the further destiny of Aptos.
Moreover, it is possible that a decentralized open-source project like Aptos might need time to prove the safety and immutability of its protocol. Even though Aptos keeps everything transparent regarding its underlying technologies and features, there’s always a risk that it can be nullified once enough transactions are made, and the platform is audited by many stakeholders.
Aptos is also ranked as a very hyped project, so there’s always a chance that the buzz could simmer down.
Finally, risks regarding security are not to be taken lightly, especially after Numen Cyber Technology exposed the vulnerability. The research for additional potential security weak points is already underway.
Before listing APT on the VirgoCX Platform, VirgoCX performed due diligence on APT and determined that APT is unlikely to be a security or derivative under Canadian securities legislation. VirgoCX’s analysis includes reviewing publicly available information on the following:
- The creation, governance, and location of APT and/or its primary development team;
- The supply, demand, maturity and liquidity of APT; and
- Legal and regulatory risks associated with APT.
Statutory Rights under Securities Legislation
VirgoCX is offering Crypto Contracts on crypto assets in reliance on a prospectus exemption contained in the exemptive relief decision Re VirgoCX Inc. dated May 30th 2022 (the Decision). Please be aware that the statutory rights in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under the securities legislation of each other province and territory in Canada do not apply in respect of the Crypto Fact Sheet to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.
To learn more about the technology behind Aptos, check out these in-depth resources here:
- The official site of the Aptos Foundation.
- Official information about the project is available in the white paper.
- In addition to a detailed guide to Aptos, CoinMarketCap has released an overview of the issues related to Aptos.
- Yahoo’s take on the tokenomics of Aptos and why it’s considered somewhat controversial.
- KuCoin’s overview of Aptos.
- Binance’s overview of Aptos, along with the relevant news and blogs related to APT.
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