I‘ve just managed to get some down time this weekend so wanted to share a project I’m excited about — Aptos. I caveat that some of the figures used in the analysis are outdated but provide a directional sense which is still nonetheless insightful.

The current situation in the L1 landscape: The total market capitalization of smart contract L1 blockchains was valued at ~$400bn as of 2021 (likely declined by at least ~50% in aggregate to date). Ethereum is the largest smart contract L1 blockchain in terms of users, activity, total value locked (“TVL”). Continued demand for block space has led to network congestion and users are faced with high gas fees due to Ethereum’s capacity constraints — this is the underlying problem statement.

As of today, the current solutions to resolve Ethereum’s lack of scalability include:

1. Increase block size: Short-term band-aid solution; may compromise security as it makes blockchain node software more resource intensive.

2. L2 roll-ups: Optimistic (fraud proofs — e.g. Optimism, Arbitrum), Zero-Knowledge (“ZK”; validity proofs — Starkware, Immutable X, LoopRing, zkSync).

3. L2 sidechains: Polygon (fka Matic Network; note uses Plasma as well as Optimistic and ZK roll-ups but technically operates in parallel to the mainnet and has its own consensus mechanism and security framework is not dependent on the L1, hence distinct to aforementioned L2 roll-ups).

4. ETH 2.0: Changing Ethereum’s architecture from a single chain to multichain, initially through execution sharding; now data sharing is being considered. Ethereum’s consensus mechanism will also change from Proof-of-Work to PoS. More on ETH 2.0 here.

It is still unclear which of the above will dictate Ethereum’s future shape and form e.g. if Ethereum were to be roll-up centric, then the L1 will only be used for data availability and security while transaction execution takes place on the L2 protocols. This technical debt has therefore seen the emergence of alternate L1 blockchains. Notably Binance Smart Chain (“BSC”), Solana, Avalanche, Algorand, Cosmos, Fantom, Near— Aptos being the newest to enter the market.

I‘ve just managed to get some down time this weekend so wanted to share a project I’m excited about — Aptos. I caveat that some of the figures used in the analysis are outdated but provide a directional sense which is still nonetheless insightful.

The current situation in the L1 landscape: The total market capitalization of smart contract L1 blockchains was valued at ~$400bn as of 2021 (likely declined by at least ~50% in aggregate to date). Ethereum is the largest smart contract L1 blockchain in terms of users, activity, total value locked (“TVL”). Continued demand for block space has led to network congestion and users are faced with high gas fees due to Ethereum’s capacity constraints — this is the underlying problem statement.

As of today, the current solutions to resolve Ethereum’s lack of scalability include:

1. Increase block size: Short-term band-aid solution; may compromise security as it makes blockchain node software more resource intensive.

2. L2 roll-ups: Optimistic (fraud proofs — e.g. Optimism, Arbitrum), Zero-Knowledge (“ZK”; validity proofs — Starkware, Immutable X, LoopRing, zkSync).

3. L2 sidechains: Polygon (fka Matic Network; note uses Plasma as well as Optimistic and ZK roll-ups but technically operates in parallel to the mainnet and has its own consensus mechanism and security framework is not dependent on the L1, hence distinct to aforementioned L2 roll-ups).

4. ETH 2.0: Changing Ethereum’s architecture from a single chain to multichain, initially through execution sharding; now data sharing is being considered. Ethereum’s consensus mechanism will also change from Proof-of-Work to PoS. More on ETH 2.0 here.

It is still unclear which of the above will dictate Ethereum’s future shape and form e.g. if Ethereum were to be roll-up centric, then the L1 will only be used for data availability and security while transaction execution takes place on the L2 protocols. This technical debt has therefore seen the emergence of alternate L1 blockchains. Notably Binance Smart Chain (“BSC”), Solana, Avalanche, Algorand, Cosmos, Fantom, Near— Aptos being the newest to enter the market.