From messari by Matt Kreiser

Key Insights

Primer

Aptos (APT) is a Layer-1 blockchain designed around the core tenets of scalability, safety, reliability, and upgradeability. Aptos was born out of Meta’s Diem and Novi projects, eventually launching in October 2022. Core developer Aptos Labs raised about $400 million in two 2022 private investor rounds.

Aptos’ technological stack features many novel aspects, including the AptosBFTv4 consensus mechanism, the Quorum Store mempool protocol, the Block-STM parallel execution engine, and the programming language Aptos Move. Aptos Move, which builds on the original Move language created by the Diem and Novi teams, offers enhanced flexibility and safety compared to other Web3 programming languages. Aptos Move is being co-developed by multiple protocols.

Other key features aim to improve user experience and safeguards, including accounts where private keys are decoupled from public keys, transaction pre-execution to explain the outcome of a transaction before a user signs it, and transaction expiration time and sequence numbers. Development of the Aptos network and growth of the Aptos ecosystem is primarily led by Aptos Labs and the Aptos Foundation.

In November, Aptos' total value locked (TVL) surpassed $1 billion for the first time and is up 19x year-over-year. Many key developments have contributed to the expansion and maturation of Aptos’ financial ecosystem amidst this runup. This report will focus on those developments as well as key metrics for Aptos’ financial ecosystem. For a full primer on Aptos, refer to our Initiation of Coverage report.

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Key Metrics

Financial Ecosystem Overview

Institutions/TradFi

In recent months, Aptos has seen increased adoption from financial institutions as they elect to tokenize financial products and bring them onchain.

BlackRock’s BUIDL

In November, BlackRock, the world’s largest asset manager, expanded its USD Institutional Digital Liquidity Fund (BUIDL), which was first launched on Ethereum in March, to Aptos alongside four other chains (Arbitrum, Avalanche, Optimism, Polygon PoS). Aptos is the only non-EVM chain to be integrated with BUIDL, and features programming in Move that offers enhanced flexibility and safety over Solidity.

Issued via the tokenization platform Securitize, BUIDL tokens are designed to offer a stable value of $1 per token and are 100% backed by U.S. Dollar cash, U.S. Treasury bills, and repurchase agreements, with daily accrued dividends paid directly to investors’ wallets as new tokens each month. BUIDL is only available to qualified investors with an initial investment minimum of $5 million. These qualified investors can transfer BUIDL tokens at any time to other pre-approved investors.

As of December 1, 2024, BUIDL has a circulating token supply of 533.3 million, with one million of those circulating on Aptos. Notably, the management fee on Aptos, Avalanche, and Polygon PoS is 20 basis points (bps), while on Ethereum, Arbitrum, and Optimism it is 50 bps.

Franklin Templeton’s FOBXX

In October, Franklin Templeton expanded its onchain U.S. Government Money Fund (FOBXX) to Aptos, one of seven supported chains. FOBXX invests at least 99.5% of its total assets in U.S. government securities, cash, and repurchase agreements fully collateralized by U.S. government securities or cash. One share of FOBXX is represented by one BENJI token, which is pegged to the U.S. Dollar and earns yield automatically reinvested for additional shares. Investors can gain exposure to FOBXX using Franklin Templeton’s Benji investments platform, which allows users to hold the BENJI token on Aptos or other supported chains via a built-in wallet. As of December 1, 2024, there are about 371 million circulating BENJI, 21.2 million of which (6% of the circulating supply) exist on Aptos.

Bitwise’s Aptos Staking ETP

On November 19, 2024, Bitwise, the largest crypto index fund manager, began trading its Aptos Staking Exchange-Traded Product (ETP) on the Swiss exchange SIX under the ticker APTB, providing both European institutions and individuals investment access to Aptos’ native token APT. The ETP stakes the APT it holds, yielding staking rewards of approximately 4.7% net of fees. In the future, Bitwise intends to list APTB on other European exchanges.

Libre

In September, Libre, a provider of tokenized investment funds, deployed several funds on Aptos, including the Brevan Howard Master Fund, Hamilton Lane’s Senior Credit Opportunities Fund (SCOPE), and BlackRock’s ICS Money Market Fund. Libre previously made these funds available on Solana and NEAR. To make these funds available on Aptos, Libre is leveraging Aptos Ascend, a product developed by Aptos Labs to provide a gateway to deliver new asset classes and financial services to users. Users can access the funds via Libre’s Gateway DeFi application, which allows accredited, professional, and institutional investors to access the funds onchain.

Real-World Assets (RWAs)

A number of other RWAs have been deployed on Aptos in addition to those offered by the traditional financial institutions mentioned above.

Ondo Finance’s USDY

Ondo Finance (Ondo) is a decentralized finance (DeFi) protocol with the mission to “make institutional-grade financial products and services available to everyone.” Ondo achieves this by bringing real-world financial instruments onchain.

In July, Ondo Finance launched its U.S. Dollar Yield Token (USDY) on Aptos. USDY is a tokenized note secured by short-term U.S. Treasuries (~99%) and bank demand deposits (~1%). The token is non-rebasing, as the per-token price increases as yield accrues each day. As of the date of publication of this report, the APY is 4.90%.

Any individual or institution can complete Ondo’s onboarding and KYC requirements to become eligible to create new USDY from either U.S. Dollar wire transfers or USDC transfers. Notably, USDY is not offered or sold in the U.S., to U.S. persons, or other restricted jurisdictions. USDY tokens become available for transfer after a 40-50 day “Restricted Period” and can also be redeemed for U.S. Dollars by KYC’d individuals and institutions, less a 20 bps redemption fee.

As of December 1, 2024, approximately 14.7 million USDY are circulating on Aptos, approximately 3.5% of the circulating supply of USDY across all chains. Notable integrations of USDY within the Aptos DeFi ecosystem include its acceptance as collateral within Thala vaults to borrow Move Dollar (MOD), Thala’s overcollateralized stablecoin, as well as liquidity pools on leading decentralized exchanges including LiquidSwap and Cellana. USDY can also be lended and borrowed on Aries Markets’ money market protocol. Other possible use cases for USDY include being used as collateral for perpetual markets trading to offset funding rates via native yield and as collateral for other forms of derivative contracts, such as options trading.

In its announcement of its partnership with the Aptos Foundation in February, Ondo stated it is exploring solutions that combine onchain native and RWA yields on Aptos, including new staking and restaking processes.

Propbase

Propbase is a real estate tokenization marketplace built on Aptos that allows users to invest as little as $100 to receive fractional ownership and rental yield in real estate assets in Southeast Asia. Prospective users must create an account to access the platform and complete KYC requirements to make an investment. Both investments and rental yield are paid/received in USDT from a user’s Aptos wallet linked during KYC verification. To date, one offering has been completed on the platform, a $215,200 sale of a two-bedroom unit at the Wyndham Gardens in Bangkok, Thailand. For this property, each fractional ownership share was tokenized and sold at 100 USDT at the offering, which sold out in July. Notably, LayerZero bridged USDT was used at the time, as native USDT had not yet launched on Aptos. Going forward, Propbase will use native USDT. Propbase also intends to launch a peer-to-peer (P2P) marketplace in the coming months for users to buy and sell property tokens.

Stablecoins

A stablecoin is a cryptocurrency pegged to another asset or underlying currency such as the U.S. dollar or the Euro. Stablecoins serve as a medium of exchange that allows tokenholders to transact on blockchains while mitigating price risk and are used across DeFi applications for purposes such as liquidity provision, token swaps, lending, borrowing, being used as collateral, and funding perpetual contract trading. In recent months, issuers of the two largest stablecoins by market capitalization, Tether (USDT), and Circle (USDC), announced native token contracts of their U.S. Dollar pegged stablecoins on Aptos.

USDT

At the end of October, USDT, the largest stablecoin by market capitalization, went live with a native token contract on Aptos. USDT is a stablecoin pegged 1:1 to the US Dollar (USD) collateralized “100% by Tether’s reserves.” As of December 1, 2024, native USDT on Aptos has a circulating supply of 130 million. Previously, only bridged USDT from various providers was available on Aptos. Notable bridged USDT token contracts on Aptos by total supply as of December 1, 2024, include LayerZero lzUSDT (17.2 million) and Wormhole whUSDT (4.5 million). As part of the transition to native USDT, multiple leading DeFi protocols on Aptos including Aries Markets, Echelon Market, and Thala Labs are offering zero-fee conversions from lzUSDT to native USDT on Aptos.

USDC

Likewise, on November 21, 2024, Circle announced a native USDC token contract is coming to Aptos. USDC is a stablecoin pegged 1:1 to the US Dollar (USD) collateralized by cash and cash equivalents, and the second largest stablecoin after USDT by overall market capitalization. Circle’s Cross-Chain Transfer Protocol (CCTP) will also be enabled. CCTP facilitates the transfer of native USDC across supported networks through a “burn and mint” bridging method, rather than the traditional “lock and mint” method. As of December 1, 2024, there is 120.4 million in LayerZero lzUSDC on Aptos bridged from various chains. As part of the announcement, Circle stated bridge providers such as Stargate will enable conversion from lzUSDC to native USDC on Aptos. Concurrently, the Aptos Foundation announced Stripe will launch its payment services on Aptos, enabling users to convert fiat currencies into USDC directly through Aptos-compatible wallets.

Move Dollar (MOD)

After USDT and USDC, Move Dollar (MOD) is the third largest stablecoin on Aptos with a market cap of $9.2 million as of December 1, 2024. MOD is an overcollateralized stablecoin pegged to the U.S. dollar and can be minted, and thereby borrowed, by depositing a supported collateral asset in a vault on Thala. A minimum collateral ratio (MCR) set by the protocol for each asset determines how much MOD can be borrowed for vault deposits of each asset. Notably, there is a minimum mint quantity of 500 MOD per vault. When a vault falls under its required MCR, a liquidation process is automatically initiated. Liquidations are first routed through the Stability Pool, which provides the MOD required to absorb the vault's outstanding debt. However, if the Stability Pool has insufficient funds, a collateral auction is initiated in which bidders can buy the liquidated collateral at a discount, and the proceeds of the auction are used to repay the vault’s outstanding debt. As of December 1, 2024, there is about $90,000 in the Stability Pool.

Additionally, a Peg Stability Module exists whereby MOD can be swapped 1:1 for lzUSDC, lzUSDT, whUSDC, and whUSDT. This module allows anyone to profit by arbitraging MOD when its price diverges from the $1 peg. For example, if the price of MOD is above $1, arbitrageurs can convert one of the abovementioned stablecoins to MOD at a 1:1 ratio and sell MOD on the open market. Conversely, if MOD is below $1, arbitrageurs can buy MOD on ThalaSwap and convert it to one of the abovementioned stablecoins at a 1:1 ratio.

USDT and USDC's market capitalizations on Aptos are up 1,300% and 380% year-over-year as both tokens have seen steadily increasing adoption with the expansion and maturation of Aptos’ DeFi ecosystem.

Hong Kong Digital Dollar

In September, the Hong Kong Monetary Authority (HKMA) began Phase 2 of its pilot program for a Hong Kong Digital dollar (e-HKD), with Aptos as its only blockchain partner. Under Phase 2, eleven firms have been selected to explore e-HKD settlement, programmability, offline payment, and commercial use cases. The HKMA stated that the results of Phase 2 will help in understanding practical issues, with the potential issuance of an e-HKD for individual and corporate use in the future.

Also in September, Aptos Labs announced a partnership and investment in RD Technologies, one of three initial issuers approved by the HKMA to its stablecoin issuer sandbox. Within the sandbox, RD InnoTech Limited plans to issue HKDR, a stablecoin backed 1:1 by Hong Kong dollars. RD Technologies also offers a licensed virtual wallet and KYC/KYB tools providing a regulatory-compliant suite of products.

DeFi

In November, the total value locked (TVL) on Aptos surpassed $1 billion for the first time and has continued to hold above that threshold. Year-over-year, TVL on Aptos has increased more than 1,800% in USD terms and 900% in APT terms. This difference reflects that the majority of TVL gain has come from increased usage rather than mere appreciation in the price of APT, even as the token’s price has increased by 84% year-over-year.

Likewise, the TVL of the top protocols on Aptos has increased by 10-40x year-over-year:

Some other notable protocols include:

Daily DEX volume on Aptos has increased by 2,700% (28x) in the last year from $750,000 to $21.5 million. In December of last year, LiquidSwap and PancakeSwap were the first and second-largest DEXs by volume with ThalaSwap emerging as the largest DEX by volume in December. Cellana Finance then became the largest DEX by volume in March and held on to that position until the end of October when ThalaSwap again became the leader. Since the end of November, ThalaSwap and LiquidSwap have had roughly equivalent volumes. Notably, ThalaSwap daily volume increased by 8,000% year-over-year, outpacing LiquidSwap, the next closest competitor with one year of data available, by roughly 2x.

Aave V3

In July, a proposal introduced by the Aptos Foundation to deploy lending and borrowing protocol Aave V3 on Aptos passed an initial temperature check via Aave’s Snapshot. The proposal still needs to pass an Aave Request for Final Comments (ARFC) on Snapshot and onchain Aave Improvement Proposal (AIP) before Aave V3 can be deployed on Aptos. Once deployed, it will be the first instance of Aave on a non-EVM blockchain. The Aptos team is currently sponsoring and collaborating on security reviews with Aave Labs and a number of other partners to ensure security standards are met before deployment. Notably, Aave V3 will not be launched on Aptos until after ChainLink’s Price Feeds are deployed on Aptos as ChainLink will act as the protocol’s oracle provider.

Closing Summary

In November, Aptos' total value locked (TVL) surpassed $1 billion for the first time and is up 19x year-over-year. Many key developments have contributed to the expansion and maturation of Aptos’ financial ecosystem amidst this runup. In October, USDT, the largest stablecoin by market capitalization, went live with a native token contract on Aptos. Likewise, a coming native contract for USDC, the second-largest stablecoin by market capitalization, was announced in November. Aptos has also seen increased adoption from financial institutions as they elect to tokenize financial products and bring them onchain. In November, BlackRock, the world’s largest asset manager, expanded its USD Institutional Digital Liquidity Fund (BUIDL) to Aptos, while Franklin Templeton expanded its onchain U.S. Government Money Fund (FOBXX) to Aptos in October.

Outside of traditional financial institutions and leading stablecoin issuers, new innovative financial platforms are also being built on Aptos. Propbase, a real estate tokenization marketplace, sold out its first offering in July, while Echo Protocol, which brings Bitcoin liquidity to Aptos, launched in August. Amidst these developments, traditional markers of DeFi activity remain strong, as daily DEX volume on Aptos increased by 2,700% (28x) in the last year from $750,000 to $21.5 million. Moving forward, continued expansion of both traditional and innovative real-world assets and DeFi products will be crucial as Aptos aims to be the premier chain for the future of finance.

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