- Introduction
- Teams
- Activity
- Social Traction
- Fundraising
- Tokenomics
- Technology
- TL;DR
Underpinning every debate, be it NFT marketplaces, defi liquidity, privacy, or any other, is the world of foundational blockchains. That is, layer-1 and layer-2 networks. These are the fundamental layers of the Web3 ecosystem and it is only by their existence that all other applications (dapps, wallets, etc.) are facilitated.
So Far…
Blockchain ecosystems and their communities underpin the entire cryptocurrency industry.
We’ve witnessed the expansion of the layer-1 vertical from sole-purpose Bitcoin-esque networks, through smart contract-compatible ‘Gen-1’ chains like Ethereum, to ‘Gen-2’ or the so-called Eth-killers (Solana, Near…) which sought to address Ethereum-based problems around scalability and throughput, all the way to the emergence of layer-2 scaling solutions, designed to maintain the security, decentralization, and collective liquidity aspects of Ethereum, while providing what is effectively an outsourced solution to gas-fees and TPS, be it via optimistic rollups or zero-knowledge technology.
However, the vast sums of wealth accrued by the founding teams and investors of successful layer-1 blockchains has prompted the development of what we might term ‘Gen-3’ blockchains. This, in turn, begs the question, ‘Is there opportunity for emerging baselayer networks to thrive and grow?’
Full examination of this debate is beyond the scope of this piece. However, if your belief is that there is yet room for nascent L1s to grow and thrive, then there are a number of projects that might warrant examination. These include both generalist and ‘specialist’ networks. Task-specific blockchains might include Canto, seeking to capture decentralized finance market share, or Nym, that brings with it metadata protection.
However, in the generalist camp, there are two counterpart ecosystems which have each received significant investment capital, developer interest, and notoriety, in spite of chilly market conditions. These two generalist, smart contract-compatible networks are Aptos and Sui, and they will be the target of examination for this piece.
INTRODUCTION
While Aptos and Sui certainly have their differences, it cannot be denied that they feature a number of similar traits too. Their team’s origin story, native programming language, and timing, to name just three.
Aptos and Sui are each children of former Meta employees and developers, and this is reflected in the nature of both projects. What’s more, both ecosystems held their respective devnet launches in March and May of this year and, Aptos’ mainnet went live in October ’22 with Sui set to follow in H1 of ’23. Perhaps most obviously, both networks use some form of the Move programming language (Sui uses Mysten Labs’ own iteration). Move is a Meta-born smart contract language that differs from Solidity in a number of ways, the smart contract language made famous by Ethereum.
This piece is both a comparative and analytical piece observing these two nascent layer-one ecosystems, specifically.
TEAM
Below is just some insight into the teams building out the Aptos and Sui architecture…
APTOS:
Mo Shaikh (Founder/CEO)
- Led partnerships for Meta’s wallet (Novi).
- Founded ConsenSys-backed start-up for real estate fractionalisation.
- 3x entrepreneur
- Led strategy at ConsenSys
- Former BCG
- Established ConsenSys’ Middle Eastern office
- Advised WEF on CBDCs
Avery Ching: (Founder/CTO)
- PhD, Northwestern
- Principal software engineer, Facebook
- Tech lead for Meta’s wallet (Novi)
- Principal software engineer, Yahoo
Rustie Lin: (Founding Engineer)
- Computer Science, Berkeley
- Production engineer, Meta
- Software development experience, Amazon
Rati Gelashvili: (Founding Researcher)
- Senior research scientist, Novi
- Experience, Google, Dropbox, Microsoft
Max Unger: (Community Lead)
- Head of community, Origin protocol
- Former entrepreneur (successful exit)
James Hodgkins: (Business Development Lead)
- Former Sales, Google Cloud
- Former BD, Amazon
- Director of international business development, Chainlink
SUI:
Evan Cheng: (Founder/CEO)
- 10 years experience, Apple
- Senior manager, Apple
- Director of engineering, programming languages and runtimes, Facebook
- Director of R&D, Novi Financial
Adeniyi Abiodun: (Founder/CPO)
- Product lead, Novi
- Senior engineering manager, HSBC
- Senior software engineer, J.P. Morgan
- Serial founder
Sam Blackshear: (Founder/CTO)
- PhD, Programming languages
- Principal engineer, working directly on Move language, Novi Financial
- Experience, Microsoft
George Danezis: (Founder/Chief Scientist)
- BA, Computer Science, Cambridge
- PhD, Computer Science/Cryptography, Cambridge
- 7 years of research experience, Microsoft
- Professor, University College London
- Fellow, Turing Institute
Koh Kim: (Head of Ecosystem)
- 5 years’ experience in partnerships and business development, Google Play Games
Alonso de Gortari: (Chief Economist)
- Masters, Economics, Harvard
- PhD, Economics, Harvard
- Lecturer, Harvard
- Research scientist, Novi
- Research fellow, Princeton
Team Sizes:
Though LinkedIn information is often far from perfect, it gives an indication that both the Aptos and Mysten teams are currently of around the same size. That said, with their ostensibly very aggressive hiring push, Aptos would be on track to move past Mysten in terms of team magnitude — perhaps faciliated by their larger capital raises.
Naturally, involvement in Facebook/Meta’s blockchain initiatives (e.g. Novi) is a common theme throughout both rosters, with Aptos and Mysten being born from the ruins of Meta’s blockchain initiatives.
At a glance, there is little to set the two teams apart. Both have ample experience in relevant fields, meaningful and extensive experience at big-tech companies, and no shortage of academic credibility. That said, it would be fair to say that Mysten Labs team wins out in terms of academic track record and specialization. The team behind Sui touts PhD economists, computer scientists, and cryptographers from some of the world’s best and most competitive universities and academic institutions. What’s more, it seems that the Mysten team has had more direct exposure to the Move language itself, a key USP for both ecosystems, and this may well have translated into the development of Sui Move, Sui’s native language.
On the other hand, Aptos boasts significant experience in some of the areas related to business development, partnerships and similar strata. This, in turn, seems to be reflected in Aptos’ larger valuation and capital raises, as well as its speed in deploying mainnet.
Ultimately, both teams are extremely strong with impressive talent depth. Undoubtedly, team-caliber was not a concern for the myriad ‘A-list’ investors that took part in both organizations’ funding rounds.
ACTIVITY:
Given that Sui is yet to reach mainnet launch, we can only access ideal data on the Aptos ecosystem (and even there we are limited). We found the below data from Artemis.xyz to be helpful in giving an indication of the state of the Aptos ecosystem.
TOTAL VALUE LOCKED:
- Aptos’ TVL appears to have settled at around the $39 million mark.
- This is already roughly half the TVL of Near Protocol at time of writing (~79 million).
- Aptos is still a minnow in comparison to the likes of Ethereum and Solana ($23.9 billion & ~$290 million).
DAILY ACTIVE ADDRESSES:
- Immediately after launch, Aptos experienced its ATH with 575k daily active addresses.
- It momentarily eclipsed Ethereum and, though never increasing beyond Solana, experienced greater DAU than Near for 7 days.
- Since then, as mainnet launch excitement wanes, Aptos activity has dwindled to as low as 17.5k DAU.
At a glance, given its youth and in light of market conditions, Aptos appears to be reasonably healthy for a 2-month-old layer-one ecosystem. Certainly, various metrics have trended downwards since mainnet launch. However, this is wholly unsurprising as the excitement and experimentation around mainnet launch dissipates and is replaced with organic usership.
Applications:
The level of pre-launch development on Aptos has been lauded with some sources touting as many as 130 dapps onboarded in the space of 7 months.
As with any viable layer-one launch, Aptos has gone to market with some of the cornerstone applications we see operating on many other chains. Core defi protocols such as DEXs, NFT infrastructure and more…
DEXs: AUX is the leading decentralized exchange for the Aptos ecosystem. With current TVL of $19.24 million, it is responsible for approximately half of TVL for the entire Aptos ecosystem.
Unsurprisingly, the two next largest defi protocols are PancakeSwap’s Aptos support, and another Aptos-native DEX, LiquidSwap, with TVLs of $11 and $7 million, respectively.
Liquid Staking: Following on from Lido’s pioneering success, liquid staking solutions are becoming an increasingly fundamental piece of layer-one ecosystems and Aptos is no different. After its three largest DEXs, Aptos largest applications by TVL are Tortuga and Ditto ($4 and $1 million). Each bring the benefit of being able to earn yield, while maintaining liquidity, to Aptos and are well-backed by the likes of Jump Crypto.
NFTs: With Aptos being touted as a major competitor to Solana, a network viewed as currently vulnerable, it would make sense for Aptos to have a burgeoning NFT ecosystem.
Topaz is the leading NFT marketplace on Aptos and, with many SOL-based projects migrating to Aptos, Topaz was able to accrue more than $2 million in its first week alone. Within a month, it had reached ~$5.5 million.
Monthly volume of $5.5 million appears impressive but would put Topaz’ volume at just 7% of Magic Eden’s current 30D volume (~$82 million). In addition, little data on Topaz’ volume has been released since then so we can assume with relative confidence that it has decreased signficiantly as post-launch excitement dissipates.
Comment:
Hopefully, the above can give some high-level overview of the Aptos ecosystem as it currently stands, 2 months after launch. Its defi ecosystem is not large, but it exists. Many of the cornerstone applications present on pre-existing networks are developing and seeing some traction. Interestingly, its NFT ecosystem is already in full swing and capturing some market share from these ecosystems too.
Furthermore, while I disclaimed that we could only carry out assessment on Aptos due to mainnet launch, it is worth noting that Aptos’ advantage in terms of speed-to-market, could be considered an advantage over Sui in and of itself. One factor attributed to furthering the Solana ecosystem’s rise to prominence over its NEAR-shaped counterpart was its lead on milestones and timeline. This extended across a number of factors, even ostensibly small milestones such as ICO.
SOCIAL TRACTION
While never forming the basis of analysis, social traction can be one available tool in assessing the degree of widespread interest in a specific project or ecosystem. It can also prove an indicator of the importance a project’s team places on community and engagement. Below is a TL;DR on Aptos and Sui social traction, right now:
Both Aptos and Sui have impressive social followings for early stage ecosystems and especially so given market sentiment. It is interesting that neither Aptos nor Sui appear ahead across all platforms. However, the above is only a snapshot and so does not account for the possibility that some fellowship/traction is inorganic.
That said, we can see that, despite @Aptos_Network holding a lead of ~66,000 Twitter followers over Sui, its engagement does not seem as strong with Aptos’ original tweets (including RT with Quote, and only using the first Tweet for threads) averaging at 244 retweets per post, over the last month. Meanwhile, despite its smaller following, Sui’s original tweets average retweets of 442.
While a brief visit will quickly establish that both Discord servers are active and engaged, Sui’s boasts some 216k more members than Aptos’ 154k. The fact that Discord encourages a higher degree of community, engagement, and interaction than Twitter, coupled with Sui’s ostensibly higher level of Twitter engagement, could suggest that Sui is leading ahead of Aptos by way of social traction/community quality.
For a little context, Solana and Near Protocol’s primary Twitter profiles are currently at 2.1 million and 963k followers, respectively. On this basis, both Aptos and Sui need only multiply their Twitter communities by factors of 2.83 and 3.51, respectively, to reach the social traction status of Near, whose token holds a real market capitalisation of $1.42 billion. Aptos and Sui’s communities are doubly impressive in light of hostile market conditions and the limited attention therein.
FUNDING
As mentioned, neither Aptos nor Mysten Labs are short of cash…
The past 12 months has witnessed both Aptos and Sui’s parent, Mysten Labs, collectively raise >$740 million, with a vast swathe of tier-1 VCs joining one or both of the cap-tables. The scale of the raises carried out by both parties is especially impressive given the cold market conditions being felt by countless projects and startups the world over.
What is particularly interesting is that some notable investors have looked to hedge across both ecosystems while others have taken up permanent residency in either the SUI or APTOS camps. The likes of a16z, for instance, features in no less than three of the five investment rounds detailed above. Similarly, Binance was not unwilling to invest at the higher end of valuations for APTOS and SUI (FDVs of $4 and $2 billion, respectively).
On the opposite end of the spectrum, Lightspeed and Coinbase have married themselves to the Sui ecosystem, investing initially into Mysten Labs in late ’21, only to undertake follow-on investments in Sep ’22. Equally, the likes of Multicoin and ParaFi have ‘gone big’ on Aptos, following a similar pattern between March and September of 2022.
In total, Mysten Labs/Sui has accrued ~$340 million. However, given the fact that Aptos raised $400 million across the first two major rounds, coupled with the undisclosed capital injection coming from Binance Labs in late ’22, we could be forgiven for assuming that Aptos has significantly more capital to deploy. Neither project is poor, but Aptos is richer.
That said, the impact of this advantage is yet to be determined as both parties have more than enough capital to onboard serious talent, orchestrate monstrous G2M pushes, and grow their respective ecosystem by way of direct project investments and grants.
Summary:
- Both Aptos and Sui have sufficient runway to survive and build through the bear market. However, Aptos’ war-chest is larger to the tune of at least $60 million.
- Both have impressively filled cap-tables that will facilitate reach into every corner of the blockchain ecosystem. There a small number of investors that participated in funding rounds for both Aptos and Mysten Labs.
- On balance, Aptos may have the edge over Sui in terms of capital-to-deploy, and this seems to be being put to use in Aptos’ aggressive hiring push.
TOKENOMICS
At core, both Aptos and Sui are layer-one proof-of-stake blockchain ecosystems and, as a result, their tokenomic plans are crucial to ensuring/facilitating wider ecosystem success, in terms of smooth running of the network, community excitement and developer onboarding.
APTOS
Aptos’ tokenomic plans and implementations have stoked significant controversy.
Aptos’ native APT token is currently trading at around $4.8 with a fully diluted market capitalization just shy of $4.8 billion, and a real market capitalization of around $624 million.
At mainnet launch, APT had a total supply of 1 billion tokens with a possible 8 digits of divisibility. According to Aptos’ own blog, the distributions, allocations and lockups are as follows:
Concentration: At a glance, APT’s distribution does not seem hugely worrisome. Certainly, the 19% of APT distributed to the core team is steep next to Ethereum and some other L1 solutions. However, the investor allocation sits at just 13.5%. A total ‘insider’ allocation of 32.5% is lower than what we regularly see for many decentralized applications’ native tokens and has been facilitated by lofty valuations granting investors altogether lower portions of supply.
Emissions: Equally, it is not until late 2026 that investors and team members should expect to have their tokens fully released and available to be sold, with release schedules coinciding with Aptos mainnet’s 4-year anniversary. That said, APT 12-month lock-up is set to end in late 2023 — a period which many hope will hold brighter conditions for the cryptocurrency markets. The result could be serious supply injections and major selling from early investors and the team alike.
Treasury: What’s more, the importance of community expansion, and developer onboarding is not lost on Aptos’ token economists with some 12.5% of APT’s initial supply allocated to various initiatives and grants:
At current APT value, this allocation equates to ~$600 million and, if deployed efficiently, could jumpstart a thriving Aptos ecosystem.
Community Backlash: However, as mentioned, APT’s tokenomics have not been without controversy and criticism. The Aptos community has decried the large portion of tokens allocated to developers and Aptos’ core team.
On balance, I empathize with Mo Shaikh in his claims that Aptos’ tokenomics are “amongst the most fair we have seen”. SOL’s initial distribution saw a full 49.5% allocated to the team and investors. That said, SOL’s core team allocation was only 12.5% compared to APT’s 19%. Perhaps it is this specific allocation that most concerns Aptos’ community.
Maybe the most concerning aspect of APT’s tokenomics is highlighted by a glance at Aptos’ blockchain explorer dashboard which details some ~83% of total APT staked:
The implication here is that early investors and team members are able to receive the 7% staking reward on tokens that have not been released to them. This would mean that APT’s supply could become even more concentrated in the hands of insiders and result in price suppression as institutions and team members sell to retail investors on various CEXs and DEXs.
Fee-Burn: One final thing to note is that, at present, APT tokens used to pay for transactions are effectively burned and removed from supply. This may help to assuage the inflationary nature of APT’s supply but will, in turn, only become meaningful if there is sufficient activity on the network to ensure a meaningful APT allocation is removed from supply.
Takeaway: Despite a significant portion of APT’s intial supply being allocated to core team and developers that has been met with anger from the community, Aptos’ token distribution is not wholly atypical. What’s more, the release schedules imposed on the team and early investors is reasonably lengthy with full release not ocuring until 4 years hence.
That said, as APT injections begin to take place in less than a year, we could see price suppression when early investors choose to sell, depending on FDV and liquidity at the time. What’s more, retail investors could have serious concerns over the portion of all APT tokens currently staked.
SUI
The Sui team/Mysten Labs have put a lot of consideration into their ecosystem’s tokenomic mechanisms and have published details in various locations. However, what is not readily available is the information that would most interest investors. That is, details regarding supply allocation, distribution, and release.
Broadly speaking, SUI’s tokenomic mechanisms will operate altogether similarly to most other proof of stake networks with the primary use cases for the SUI token being:
- Staking to participate in network validation
- Facilitation of on-chain governance rights
- Payment of gas/transaction fees
There are some small elements of uniqueness to the SUI token and for a more an indepth look, the published SUI tokenomics whitepaper can be useful. However, real assessment of SUI’s mid-to-long term viability requires details which are not yet forthcoming.
What we do know is that SUI has a capped supply at 10 billion tokens, meaning that investors might feel marginally more comfortable over the much longer time horizon.
One thing to note is that SUI’s token concentration is likely to be significantly higher than that of APTOS. Mysten Labs have raised nearly as much capital as Aptos by selling off SUI allocations to early investors (see ‘fundraising’ section). However, much of this investment has taken place at a far lower fully diluted valuation: $2 billion vs APT’s $4 billion. The result is that Mysten Labs will have had to forfeit larger portions of SUI’s supply. My guess would be that, given the negative community response to APT’s tokenomics, Mysten Labs is concerned that they will face an even more intense response if and when allocations, distributions, and release schedules are made public.
With Sui mainnet launch expected in the first half of 2023, we would hope that tokenomic details will be released in the coming weeks/months.
Comment:
With Aptos ahead in terms of mainnet, token launch, and listings, there is far more information available on APT’s tokenomic landscape than there is for SUI.
APT’s allocations and distributions are in no way perfect, and this is reflected in community feedback on various token-related developments. However, Aptos’ founder, Mo Shaikh, is correct in that APT’s concentration is by no means the worst when it comes to team and investor allocations. Indeed, APT’s sizable valuations for later rounds have helped to ensure investor allocations remain below the 15% mark.
That said, the vast majority of APT tokens which are already staked could trigger some concern around exactly where the lion’s share of staking rewards will end up.
In contrast, Mysten Labs are yet to release comprehensive details around the supply concentration and vesting schedules regarding the Sui ecosystem’s native token. What’s more, given the altogether lower fully diluted valuations at which Mysten raised, it is likely that their allocations are wholly more concentrated than their Aptos counterpart’s. This, in turn, may have the Mysten Labs team worried about the community reaction when tokenomic details are eventually made public.
TECHNOLOGY
As is the case with all layer-1 blockchains, both Aptos and Mysten tout their superior technology as the key to their future success. As mentioned, both teams have their origin in Meta’s failed blockchain projects and much of the technology behind Aptos and Sui began at Meta too.
Scalability:
One of the most significant limiting factors of the Ethereum Virtual Machine or EVM (the world’s most prolific smart contract execution engine) is that it operates sequential execution. In these instances, the transactions waiting to be validated and to have their details appended to the chain, form a queue with each transaction flowing through separately in time.
In contrast, both Aptos and Sui utilize parallel execution. Individual, unrelated transactions can be distinguished and processed in simultaneously, improving throughput and avoiding bottlenecks in times of high network demand. However, as discussed by Lefteris Kokoris-Kogias of Paradigm, throughput is only half the battle. The parallel execution used by Aptos and Sui allows for improved transaction latency too, owing to the more efficient use of node resources.
It is worth noting that Aptos and Sui are not the only networks using parallel execution to their advantage and the likes of Fuel and others also feature in discussion of the topic.
Move:
Typically, a network implementing its own language is disadvantageous. Zilliqa is an example of an early blockchain project, with a sound, well-qualified team, that was effectively DOA, largely owing to its own programming language. An ecosystem can only succeed if a sufficient number of sufficiently good applications are built using its infrastructure. If a developer needs to learn an additional language to build with that blockchain, it presents a huge barrier to entry.
However, while a deep dive on the tech would be a separate piece in its own right, the Meta-born object-centric Move smart contract language appears wholly necessary to both the Aptos and Sui ecosystems.
Move is required to facilitate the parallel execution we mentioned earlier. It allows network validators to establish which transactions are causally related and unrelated, meaning transactions can be validated independently and therefore in parallel. In addition, Move may well present security advantages. According to Marthe Naudts of White Star Capital:
“Move [focuses] on scarcity and access control. It treats formulas as fundamental resources that can never be cloned or discarded — only moved. This improves security by preventing re-entry vulnerabilities, poison tokens, and spoofed token approvals.”
Sui Move: While Aptos uses a largely copy-paste version of Meta’s Move language, the Mysten Labs team have further augmented the base language, to better suit their needs. Mysten Labs believes that Diem-Move, though elegant and useful in several ways, is not entirely fit to accommodate the contemporary blockchain economy, especially concerning NFTs, owing to its originally permissioned nature.
Here is a more in depth explanation of the motivations behind Sui Move, and here is a closer look at its breakdown.
Developer feedback to Sui Move is largely positive with some Sui-native projects publicly discussing their reasoning behind its adoption.
For instance, the Ethos Wallet team, the leading wallet provisioning project associated with the Sui ecosystem, mentions security, readability, and (unsurprisingly!), the accommodation of NFTs, as the driving reasons behind their selection of Sui.
Ethos believes that safety and security are crucial in onboarding more users to Web3 and blockchain technology and Sui Move allows for this with its asset-based model. At high-level, Sui Move makes it easy to identify the specific permissions of a function, when you provide it with the assets in question.
‘while this may seem like a relatively small detail, we think this change could make the experience of using and developing dApps much safer and more user-friendly’
We, at Metamatic, are looking to hear first-hand feedback on what it’s like to build with both Aptos and Sui. If you’re a project building in these ecosystems, please contact us at team@metamatic.co . We would love to hear from you.
TAKEAWAY
The prospect of two well-funded, technologically advanced, layer-one ecosystems with highly credible teams, emerging into the blockchain ecosystem (at a time when things seem to only go from bad to worse), is hugely exciting for anyone immersed in the space.
On the basis of the above, however, there are a few things to take away regarding both Aptos and Sui.
Both ecosystems seem to have small advanatages over each other in different aspects. On the one hand, Aptos has more runway in terms of funds raised, has been quicker to go to market regarding both mainnet and token, and already has verticalised ecosystems growing within its economy. On the other, Sui appears to be ahead on community/social traction, despite not yet reaching mainnet. Furthermore, the Mysten Labs team appear to have had more proximity to the underlying technology behind the networks and Sui’s native developers believe that Sui’s iteration of the Move language will make the network altogether more viable.
Meanwhile, though Aptos has come under fire for APT token concentration, Mysten Labs are yet to release details of Sui’s distribution and allocation and, given SUI’s lower investment valuations, it could be even more so.
Of course, regardless of their differences, the success of both Aptos and Sui will depend largely on the long term viability of the Move language and the parallel execution upon which they rely for scalability.
Both are furthermore reliant on the assumption that there is indeed space for additional layer-1 ecosystems in the Web3 industry. Whilst Ethereum appears evermore unassailable in terms of TVL, developers, and most other KPIs, the space more alternative L1 smart contract platforms is certainly not closed off. With famous scalability plays like Solana and Near experiencing real vulnerabilities and disappointing developer and user activity, both Aptos and Sui could begin to contest the non-Eth L1 industry.
The coming months will be crucial for both Aptos and Sui, and Electric Capital’s 2022 Developer Report, expected in January, could prove very revealing in indicating which of the two networks is ahead in terms of construction. Whilst there is no surefire way of telling who specifically will emerge from the pack, the next few months are going to be very revealing indeed and further assessment will become feasible after the Sui ecosystem’s mainnet launch.
At Metamatic, we are fascinated by and see potential in both ecosystems. If you’re a project building with either Sui or Aptos, please reach out to us at team@metamatic.co .
