Aptos vs Sui: A Move-Based L1 Game

Introduction

The “L1 war” is a closely watched narrative in the 2020-2021 cycle, with major alternative Layer-1 blockchains capturing a lot of value and developer talent alongside Ethereum. Solana, Cosmos, Avalanche, BSC, and nearly a dozen other L1 blockchains had a market cap of over $300 billion at market peak. While that narrative has cooled, discussions about scalability at network scale, security, and continued innovation around technology design are gaining weight again. These discussions are fueled by the massive funding rounds of two new L1 unicorns, Aptos and Sui, with teams and structures drawn from Meta’s now-defunct Diem and Novi projects.

Diem and Novi

Novi Financial, a wholly-owned subsidiary of Meta and a member of the Diem Association, is the main project built for Diem by Meta's digital asset team. It’s a crypto payment wallet that uses the same technology as its predecessor , Calibra, which Facebook announced in June 2019. The Novi pilot followed a similar fate as the Diem Association began to unravel in the face of continued regulatory scrutiny and a lack of mainstream enthusiasm for adopting products that contradicted the overall ethos of web3 and decentralization.

While the Meta-backed project was dead at 1 Hacker Way, the team behind the technology has big ambitions to bring it back in a completely different way. Most notably, Diem aims to be a permissioned network, while Aptos and Sui are decentralized and permissionless, allowing anyone to join them as a validator.

Originally dubbed Libra , Diem is a permissioned blockchain-based stablecoin payment system proposed by Facebook (Meta), independently and cryptographically entrusted to the Diem Association — a group of companies from payments, technology and telecommunications to VCs and non-profits . Membership organization of companies such as for-profit organizations including Visa, Mastercard, eBay, Shopify, Anchorage, Coinbase, Ribbit Capital, a16z, Union Square Ventures, Mercy Corp, Uber, Lyft, and many others.

move

Move is a Rust-based open-source programming language developed by the Diem Association team for creating customizable transaction logic and smart contracts. It is a new language that arose out of this project along with the Move Virtual Machine (MoveVM). This mechanism is designed to maximize security without increasing transaction compilation costs, and minimizes gas fees compared to other PoS chains such as Ethereum. It is touted as a safe and productive language that helps developers avoid mistakes that can lead to vulnerabilities.

According to the whitepaper , Move's executable format is "bytecode, which is higher-level than assembly language but lower-level than source language. The bytecode is checked on-chain for resource, type, and memory safety by a bytecode verifier, and then verified by The bytecode interpreter executes directly." The main factor that distinguishes Move from other programming languages and enables Move to enjoy a high level of safety and expressiveness is its use of resources, which is extracted from the mathematical ideas of linear logic. of. To dig deeper into the technical nuances of the language, Pontem Network — a product studio building wallets and asset exchanges on top of Aptos — outlined it in detail.

While both protocols leverage the Move programming language, Aptos and Sui adopt slightly different models. Aptos uses the original MOVE language created by Diem's team, Sui uses their own alternative version " Sui Move ".

Financing overview

After a few staggering funding rounds, the popularity of Aptos and Sui has skyrocketed. Aptos Labs received a US$200 million strategic investment led by a16z in March 2022, followed by a US$150 million Series A investment led by FTX Ventures in July 2021, and Mysten Labs’ US$36 million A round in December 2021 round and the recent $300 million Series B round also led by FTX Ventures in September. Binance Labs and Dragonfly also joined the ranks, each making a strategic investment in Aptos at the end of September following Mysten's announcement of its latest funding round.

Building a new L1 is a huge project, and there is no perfect playbook. It's capital-intensive, talent-intensive, and takes years to build, scale, market, and move toward decentralization. The recent rounds of financing have been like a capital arms race to see who can build the biggest bear market position to generate meaningful innovation in the next expansion cycle. Still, there has been some criticism from the community and investors that such a valuation is too high in a deep bear market, given the lack of an active ecosystem, governance framework, or users to support its double-unicorn status.

The recent fundraising tells another interesting story. Exchange funds have poured into both projects, with FTX, Coinbase, and Binance all funding recent funding rounds for both protocols. Their parent exchange will list these tokens and earn substantial fees from traders rotating into another L1 narrative, while also getting token allocations at early discounts. Beyond ETFs, it’s worth noting that the size of the funds backing these protocols is huge — the top 15 funds in a recent VC ranking . Some of Solana’s investors are also funding protocols that also seek to maximize network capacity, including Multicoin, Blocktower, Sino, ParaFi, a16z, and Jump. Although people are still skeptical about the high valuation, early investors hope to obtain excess returns through future token warrants.

Founder-Market Fit

Both Aptos and Sui's founding teams are deeply rooted in the Diem and Novi projects. It is undeniable that both projects have the technical capability to execute on the vision of over $4 billion valuation. There is no question that both teams have strong founder-market fit. The Mysten Labs team includes two co-authors of the MOVE programming language white paper , as well as additional R&D strength from the Novi/Diem team. As CEO of Aptos Labs, Mo Shaikh brings business development and partnerships - an important aspect for any new protocol looking to gain traction in the growing L1 market. This is a stark difference between Solana and Polygon and more technology-focused protocols like NEAR and Algorand in the last cycle. Aptos has also brought in several former Solana employees, including Solana's ex-head of marketing , who have first-hand experience scaling the replacement L1, to drive the Aptos ecosystem.

Architecture and Consensus

Both Aptos and Sui are proof-of-stake (PoS)-based blockchains, and both protocols employ a consensus mechanism called BFT ( Byzantine Fault Tolerance ), which operates on the idea that a third of validators can go offline or malicious behavior, and the network can still function normally. From here, their designs began to diverge.

HotStuff

Aptos relies on HotStuff, a modified BFT consensus. In HotStuff, the leader changes with each voting round, proposing a new block and validators vote on it. Since all validators communicate with a single leader, the total number of messages sent is much less than when validators communicate with each other. Once a block is deemed valid, it will reach finality in less than 1 second which Aptos claims. This is a key advantage of Aptos over competitor Solana, which requires 2-6 seconds for finality.

Similar to most L1s including Ethereum, Aptos utilizes an account-based model where transactions are sequentially packaged into blocks and form a blockchain. However, by designing Block-STM (an in-memory parallel execution engine), Aptos claims to be able to execute More than 160,000 Move transactions.

Narwhal and Tusk

Sui uses Narwhal and Tusk consensus algorithms to achieve parallelization at the execution layer. Narwhal is the mempool module - it ensures transaction data is available. It can also be used alone (without Tusk) with other consensus engines such as HotStuff or Cosmos' Ignite [2]. Tusk is a consensus module that sorts the submitted complex transactions for consensus [3].

Given this DAG (directed acyclic graph)-based or object-centric data model, some might argue that Sui is a distributed ledger rather than a blockchain. Under this design, transactions are not packaged into the blockchain in order, but its many elements are connected together into a network graph rather than a chain. Conceivably, the DAG model can enhance scalability by splitting objects and exploiting their built-in properties. This design is also asynchronous, which means it is resistant to DoS (Denial of Service) attacks and helps Sui enter the market as a security-focused protocol.

With this design, Sui takes a dynamic new approach that completely eliminates consensus for many transactions—owners transfer tokens to different addresses without any other transactions that depend on them, and are confirmed almost instantly. The sender broadcasts the transaction, collects votes from validators (handshake), and receives a so-called validity certificate. For more complex transactions involving "shared objects," such as interactions with smart contracts that can be modified by multiple owners, Sui leverages the more traditional BFT consensus described above. This approach could make Sui an ideal L1 choice for specific use cases where dApps generate large volumes of simple transactions, need them to be confirmed with low latency, and are less concerned with decentralization - such as gaming or airdrops [4] .

Thanks to Pontem Network's blog post for helping me with an overview of these highly technical parts.

scalability

After digging into these new protocol designs, it is clear that scalability is the main added value these projects hope to unlock for the ecosystem. With major discussions around web-scale scalability in blockchain, both Aptos and Sui aim to be the frontrunners in this race by maximizing network capacity. The chart below highlights how early speed tests match up with established L1 competition. Time will tell if these teams can deliver on their early promises.

attraction

It's too early to tell how Aptos and Sui's MOVE battle will play out. However, with the early signs of the ecosystem already starting to emerge, massive capital inflows will no doubt bring huge traction to both protocols. According to Move Market Cap, 181 projects are already building or supporting the integration of the Move programming language.

Aptos Ecosystem

Since the funding round in late summer, a number of Aptos-specific browser wallets have launched on testnets, including Pontem Wallet , Fewcha , Martian , and a few others available on Chrome and iOS. Pontem Network, the Aptos product studio behind Pontem Wallet, also launched LiquidSwap , the first AMM on Aptos. Additionally, several NFT marketplaces have already been built on the network, includingBlueMove ,Topaz , and Souffl3 (currently only supporting the Martian wallet), which are all launching on testnet. Aptos Domain Name Service is established by the Aptos Foundation. A few additional dApps have attracted attention in the early DeFi ecosystem, includingAptin Finance (a lending platform), Mover (EVM bridge to Aptos), Vial (algorithmic liquidity protocol), Mobius (non-custodial liquidity sex protocol) and AptosLaunch, the first decentralized launch platform on Aptos. LayerZero Labs also recently announced an integration with the Aptos mainnet, which went live on October 17. Here is a full list of projects built on Aptos curated by the community.

Sui Ecosystem

After the core team launched Sui Wallet in July, many independent browser extension wallets have appeared in the Sui ecosystem. These include Wave , Suiet , Hydro , and more. MoveEx became the first DEX built on Sui, along with BlueMove (Aptos’ NFT marketplace), which also integrated the Sui network. A recent collaboration with Axelar Network aims to help Sui developers bridge to EVM-compatible applications. A burgeoning GameFi ecosystem has also started to emerge, but it's too early to know the potential winners.

final thoughts

• The L1 game has been saturated after the last cycle. However, many other top L1s emerged from the previous bear market and quickly entered the ensuing expansion. Don't underestimate the possibility of this happening again, as new conversations around continuous innovation and scalability at web scale have taken root.
• We'll see an entire ecosystem and industry emerge built on the Move programming language -- and maybe even some Aptos and Sui replacement L1s that can iterate on innovation.
• As more builders continue to push the boundaries with scalability innovations, more projects built specifically on Narwhal and Tusk consensus mechanisms may emerge and receive funding.
• Another Rust-based programming language will push more developers to adopt other Rust-based blockchains, such as Solana, further cannibalizing Solidity's market share in the industry.