by @Guaaronnnn
editor @FriedWagyuu

Part I. The Raising of New Layer 1s

TL;DR

• Both Aptos and Sui are new Layer 1s developed by Meta’s ex-Diem team
• Both projects are invested by star-investors in the field
• Both chains uses Move language and focuses on scalability
• Aptos is relatively faster in development while Sui is still at early stage
• Aptos focuses more on technicals while Sui focuses on user experience
• Rather than being ETH-Killers, both are more likely to be Solana-Killers
• The story about future mass adoption still has a lot of uncertainties

About Aptos

Aptos is one of the most buzzworthy projects of 2022. Back in March 2022, Aptos raised a $200 million investment at $2 billion valuation, led by a16z, with participation from Tiger Global, Katie Haun, Multicoin Capital, Three Arrows Capital, FTX Ventures, Coinbase Ventures and others. The all-star investors are together with the all-star investors: Aptos is led by ex-Diem developers from Meta—CEO Mo Shaikh and CTO Avery Ching. Aptos is using Move language which was originally developed for Diem.

As a Layer 1 project, Aptos’s mission is to build the safest and most scalable L1 for the next billion users. In other words, they aim to solve the blockchain trilemma and to be capable for mass adoption.

About Sui

Sui is another L1 founded by veterans of Meta and Diem team. Mysten Labs—the team behind Sui—raised $36 million in Series A led by a16z, and now they are looking to raise at least $200 million in Series B at a $2 billion valuation. This round is led by FTX Ventures, who have committed at least $140 million.

Sui is developed with Rust. Similiar to Aptos, Sui also uses Move as smart contract language.

Highlights of Aptos

Move Language
Compared to Solidity, Move language is designed for safe resource management and verifiable execution on a blockchain. It has a formal tool which allows developers to quickly verify and test the code if it is executing as intended.

Production-Grade, High Assurance BFT Consensus Mechanism
Aptos have successfully implemented its fourth iteration of the protocol, which is the most advanced HotSuff derivative. It is designed to ensure network continuity with no downtime during upgrades.

Safer Account Recovery and Rotation Protocols
Users and validators can rotate their private and consensus keys to mitigate key theft. Aptos is also developing key recovery methods in order to avoid “billions of dollars of value” being locked because of lost keys.

Multi-Agent Transactions
Move allows multiple atomic actions in on single transaction across multiple on-chain accounts.

Parallel Execution Engine
Block-STM is a parallel execution engine for smart contract. It can execute 160K+ non-trivial Move transaction per second through the preset order of transactions and combining Software Transactional Memory techniques with a novel collaborative schedule. By grouping transactions in blocks, & every execution of the block must yield the same deterministic outcome.

Highlights of Sui

Sui Move Language
The Move language is the core behind both Sui and Aptos. However, Sui made adjustments with the Move language for stronger network performance — Sui Move:

• Sui’s storage is designed around objects, while on most blockchains storage is centered around accounts.
• Each object is owned by an address and is mutable by default, but can be made immutable or shared between multiple addresses.
• Sui’s Move smart contracts can receive these objects as inputs, manipulate them, and return objects as outputs.

Transaction Parallelization
Sui has a special system design called parallel agreement which enables Sui can scales horizontally with no upper bound to meet application demand while maintaining extremely low operating costs per transaction.

Sui achieves parallel agreement through two different consensus:

• Byzantine Consistent Broadcast
• Byzantine Fault Tolerance (BFT)

Simple/independent transaction like transfer of assets and payments can be validated with Byzantine Consistent Broadcast. And, complex/dependent transaction can be validated with BFT. Therefore both kinds of transactions can be validated in parallel. This leads to simple transfers can be validated nearly immediately while complex transactions are executed within 2–3 seconds. Sui is essentially removing the concept of block times.

Storage Fund
Sui introduces a storage fund that redistributes storage fees from past transactions to future validators. Storage fund is a mechanism to address state bloat issue. When a user summits data-on-chain, they have to pay a fee which includes gas fees and “storage fee”. Storage fee will go into storage fund to cover the real-world cost for validators to store the user’s data. Part of the storage fee will also go to incentivize future validators as the network becomes mature.

Gas Market Design
Most blockchains suffer from large fluctuations in gas costs due to changing network demand. Sui designs a gas-pricing mechanism to achieves low, predictable gas fees. Sui runs in epochs. Every epoch (24 hours), the reference gas is agreed by validators at the start of each epoch. Users use the reference price as a credible anchor. Sui provides a number of incentives to validators to keep transaction fees close to the reference price throughout the entire epoch.

Roadmaps

2022 Q1

• Aptos: developer testnet launched

2022 Q2

• Aptos: incentivized testnet launched (already at testnet 2)

2022 Q3

• Aptos: mainnet launch
• Sui: incentivized testnet

2022 Q4 to 2023 Q1

• Aptos: deploy the next major release to Aptos mainnet with the next set of significant features
• Sui: no solid timelines

Aptos ecosystem

EconiaLabs
Hyper-parallelized CLOB exchange protocol built to provide equal global access to markets.

Hive
A mobile multi-sig wallet

Martian
A crypto wallet integrable with dapps for a holistic UX.

Njord Finance
Aborrow/lend protocol to unlock security & diversification of strategies in yield generation.

Hippo Labs
A trade aggregator on Aptos to provide users with best rates across all Aptos DEXs.

Nutrios Project
Building food’s web3 infrastructure with the implicit goal of launching the decentralized operating system of food.

Pontem Network
The first AMM for Aptos.

Aptos Name Service
Domain name service for Aptos.

Ending Thoughts

The narrative of Etherum killer hasn’t ended yet, after Avalanche, Solana, Near, etc. people are always looking for a blockchain that can solve the trillemma. VCs also love to invest in new Layer 1s because of their powerful narrative — mass adoption and network effect. That’s why people are willing to give higher valuation on L1s than other protocols and projects.

Valuation comparision—primary market valuation of Aptos and Sui is a bit expensive:

• Aptos & Sui — $2 billion before mainnet is launched
• Solana — $14 billion
• Polygon — $7 billion
• Avalanche — $7 billion

Aptos and Sui, instead of being another Ethereum killer, they are more like strong competitors of Solana:

• High TPS — Aptos and Sui both TPS are 120K-160k, while Solana is 65K.
• Aptos and Sui use Move language which is based upon Rust—opportunity for Solana developer to migrate out of ecosystem and shift to Aptos and Sui.
• Aptos and Sui might eat up Solana’s market due to poor performance of Solana — mulitple chain halts happened.
• All three are backed by well-known VCs.

Both Aptos and Sui are based on Move language and have addressed different issues of what Ethereum and other EVM chains have. Before mainnet launch, it is hard to tell which will win in this fight. Base on the available information, Aptos give me a feeling that they put effort on safety — key recovery, no downtime during upgrade. On the other hand, Sui more focus on user experience — no latency between transfer, gas mechanism.

I think both Aptos and Sui’s goal is mass adoption. As Solana recently announced its plan on launching a web3-focused smartphone, I wouldn’t be surprised if Aptos and Sui have similar plan in the near future.

The edge of Aptos and Sui is high-throughput and low-latency which are able to deliver user experience. They can leverage their edge in:

• DeFi —Latency and high transaction fee are problems in most blockchains. With low-latency, order-book DEX or even high frequency trading might become achievable like trading on CEX.
• Gaming —with such high TPS and low-latency, in-game transactions will not congest other activities, plus status of objects will update in real-time. It can also leverage Move’s safety and expressivity around digital objects. It will be a breakthrough if MMORPG is able to full-chain and attract gamers to understand blockchain like StepN.
• Commerce —Sui’s mechanism is designed to achieve real-world payment. For simple transfers, transaction is validated nearly immediately. Aptos and Sui’s TPS is 120K+ which is almost 2x of Visa (65k TPS). With high TPS, many daily-use application can leverage Aptos and Sui to become more transparent and efficient.

My thoughts on the next big narrative is mass adoption. After this market cycle, major DeFi protocol becomes infrastructure. NFT started to reach more non-crypto people and have usage in real world. For gaming, GameFi don’t have a sustainable model, players are mainly crypto people—not the real players outside crypto. For SocialFi, none of the social protocols run out, we are still stick with traditional social media platform even though we don’t like them very much. High TPS and low-latency is the first and basic condition of mass adoption, Aptos and Sui might be the blockchain which starts the story.

Part II. Market Updates

Christie’s launched a VC fund, Christie’s Venture
It aims to invest in web3 and blockchain that related to Art Market. It also announced its first investment in LayerZero Labs, a company that designs cross-chain applications that enables NFTs or other digital assets to be transferred between blockchains.

Matter Labs schedules zkSync 2.0 mainnet launch for October
zkSync is one of Ethereum scaling solution — “zero knowledge rollup”. zkSync 2.0 is EVM-compatible, once the launch of zkSync on mainnet is finished, developers will be able to build things on top of zkSync just as they do on Ethereum.

Three Arrows Capital (3AC) owes $3.5 billion to creditors
As per court documents show, 27 companies had lent billions to 3AC. The highest amount lent by any of them came from Genesis, a company under Digital Currency Group, at $2.36 billion.

Tesla has sold 75% of its Bitcoin holdings
According to its Q2 earnings report, Tesla sold 75% of it for approximately $936 million. Tesla made $1.5 billion investment in Bitcoin in February 2021.

Polygon announced the launched of Polygon zkEVM
Polygon claims it is the ‘’first” Ethereum-compabatible scaling solution that uses zk proofs.

Part III. Fundraising News

Gnosis Safe —Smart Contract Wallet
Raised $100 million round led by 1kx. Other backers include Tiger Global, A&T Capital, Blockchain Capital, Digital Currency Group, ParaFi, Lightspeed and 50 other strategic partners.

Animoca Brands — Gaming
Raised $75 million at valuation $5.5 billion from Liberty City Ventures, Kingsway Capital, Alpha Wave Ventures, 10T, SG Spring Limited Partnership Fund, Generation Highway Ltd, Cosmic Summit Investments Limited, and others.

Hang — NFT Membership Platform
Raised $16 million in series A led by Paradigm. Other backers include Tiger Global, Tiffany’s executive Alexandre Arnault, Thirty Five Ventures, Night Ventures and others.

XLD Finance — Cross-Border DeFi Tools
Raised $13 million in pre-series A led by Dragonfly Capital and Infinity Ventures Crypto. Other backers include Digital Currency Group, Circle, IDG Capital, Yield Guild Games and others.

Farcaster — Decentralized Social Network Protocol
Raised $30 million round led by A16Z. Other backers include Standard Crypto, Coinbase Ventures, 1confirmation and others.

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