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Core Report Vulnerabilities
Aptos as a project is riddled with controversies and red flags. The APT token’s launch was highly unusual compared to most other high-profile token launches. The tokenomics at launch were completely unknown to the general public, which led to significant criticism and even accusations that the launch was “predatory” in nature. The primary concern is the overlap and potential conflict of interest between the largest investors and the exchanges that listed the token.
Here are some examples of criticism from the broader crypto ecosystem:
The Aptos Foundation raised approximately $350 million from investors such as FTX, Coinbase Ventures, Binance, a16z, Multicoin, and Jump. Only a week after the token generation event, the APT token was listed on FTX, Coinbase, and Binance, which is highly unusual given the lack of functionality, utility, or demand for the token at that time. Furthermore, information regarding the tokenomics wasn't available until less than 24 hours prior to the listing, and the information provided was far from comprehensive.
Of the total supply of 1 billion tokens, only 13% is considered to be in circulation. The 2% airdrop (approximately 20 million tokens) to testnet users is part of the 125 million community tranche designated for ecosystem-related items, such as grants and incentives. However, the details regarding the actual float, including the distribution of tokens to ecosystem projects and the timeline for that distribution, are currently unknown.
Moreover, the so-called "lockup" isn't a true lockup as investors and core contributors do not vest for a year, but staked tokens (both vested and unvested) can be sold immediately. Furthermore, there was a one-week pre-mine before the token generation event, and with an 80% stake rate, the Foundation and community earn another approximately 60 million tokens annually. However, there are no details on distribution mechanics, making the tokenomics too ambiguous for any practical use.
There has been criticism regarding the launch, but it's seen by some as inadequate in light of past similar practices. For instance, the launch of the Internet Computer (ICP) also faced similar issues with a lack of transparency, an insane $200 billion+ valuation, and no vesting schedule for treasury tokens, among others. These practices are concerning for retail investors who trade the new APT token on exchanges without the means to access further information.
As mentioned above and in previous sections, Aptos’s high degree of centralization is undeniable. With small parties controlling the entire governance process, early investors and exchanges seemingly being given priority access to tokenomics information, and the Aptos Foundation itself releasing no information as to how it'll use its 67.5% controlling stake overall pre-mined APT tokens, the project poses significant risks to retail investors.
Aptos community members, users, and retail investors need to have immense trust in the early investors and core team members of Aptos. The entire project is only functional based on the continued community trust that the core team members and investors will align their significant controlling power over the network with the community. For investors, there's a substantial risk that the major centralization in the APT token, and the fact that staking rewards have no vesting period (they can be sold immediately), will lead to these major holders selling their rewards for profit unbeknownst to retail.
In many respects, the launch of the Aptos blockchain has the feeling of a corporate-controlled blockchain more than an open-source, decentralized smart contract network. These concerns of Aptos being a “VC-shill” project have been echoed by the crypto ecosystem since its launch without a tokenomics model in 2022.
Poor Network Performance and Development Concerns
Aptos went into their mainnet launch claiming that their testnet was able to achieve 4,000 transactions-per-second (TPS) with a hypothetical ceiling of reaching 100,000+ TPS in a fully realized system. When the Aptos mainnet launched officially, it was only able to manage an abysmal ~10 TPS, which was worse than most major blockchain networks.
As of Q3 2023, Aptos has not improved its network performance in any meaningful fashion, reaching ~12 TPS in real-time and with a peak TPS that averages between 40-60. This is worse than Ethereum’s average of ~24 TPS and peak potential of 93 TPS. It's also worth noting that other competitors such as Polygon, Solana, Algorand, and Avalanche are all well above and beyond the capabilities of Aptos in Q3 2023.
Aptos is also experiencing a sharp exodus in active developers working on the project since its peak in Fall of 2022 following its controversial launch. At the network’s peak, there were approximately 108 developers making anywhere from 50-60 GitHub commits per day. These figures have declined dramatically to roughly half the amount of developers (~53) and only 14 commits per day.
To continue, various technical issues with Aptos have been pointed out by individuals in the crypto community. One Twitter user, Paradigm Engineer #420, stated that they couldn't find the Remote Procedure Calls (RPCs) to connect with Aptos, suggesting that the newly launched blockchain was unusable for the average person. Another developer who previously worked on running an Aptos validator noted that there were zero community-run or permissionless validators, making Aptos closer to a PoA chain rather than a true, decentralized PoS chain. The developer also stated that Aptos' BFTv4 algorithm could experience network performance degradation if there were validators running on slow hardware. This could be why Aptos has a tight grip on who operates its network, with only 104 validators present today.
License Problems and Criminal Affiliations
In February 2023, an anonymous GitHub user accused Aptos of wrongly using Meta’s original source code for the Aptos project, i.e., stealing it. It's important to note that the claims made by the anonymous user are just allegations and have not been proven to be true. However, the admin of the Aptos GitHub continues to simply remove the post rather than refuting the accusations. Additionally, well-known lawyer and crypto expert Preston Byrne also weighed in on the situation, suggesting that Aptos has made errors in their GPL license compliance efforts when creating Aptos. Byrne pontificates that Meta could revoke the license if they wanted to, though he stated that there are no instances of an Apache license being revoked occurring before.
If these allegations were to be proven, it could have serious consequences for the project and potentially call into question the founders' and investors’ business ethics. It does not help that large Aptops investors, including FTX and several closely aligned FTX companies, such as Multicoin Capital and Jump Capital, were prosecuted for criminal offenses by U.S. prosecutors. This is combined with the weight of the disgraced and potentially criminal actions of another core Aptos investor in 3AC.