Category: Layer-1

Aptos (APT), a Layer-1 blockchain network, has shown significant growth in key metrics during the fourth quarter (Q4) of 2023, following the overall recovery of the crypto market. Furthermore, according to a recent report by Messari, Aptos experienced notable advancements in various aspects of its ecosystem.

Inflation And Genesis Supply Unlocking

The circulating market cap of APT witnessed a remarkable 126% quarter-on-quarter (QoQ) increase, reaching $2.9 billion. This growth surpassed that of similar market cap projects, leading to an improvement in APT’s market cap rank from 35 to 33 (currently 30).

Although the price of APT did not rise as much as its market cap, it still recorded a solid 75% QoQ increase.

Revenue generated by Aptos, represented by the fees collected through the protocol, also continued to grow in Q4 after recovering from lows in Q2. Denominated in APT, quarterly revenue grew by 10% QoQ, exceeding 46,000. 

With the appreciation of APT’s price, revenue in USD experienced an even greater surge of 30% QoQ, totaling $345,000. Notably, there was a spike in daily revenue towards the end of December due to an “inscription craze”.

Moreover, Aptos implemented an inflation model for APT, beginning at a 7% annualized rate and gradually decreasing by 1.5% each year until it reaches 3.5%. In mid-October, the inflation rate reduced to just under 6.9% as per the initial total supply of 1 billion APT. 

Additionally, APT faced inflationary pressure from the unlocking of the genesis supply, which includes the initially allocated 1 billion APT tokens.

By the end of Q4, over 23% of the genesis supply was distributed, marking a 30% QoQ increase.

In Q1 of 2024, another 7.5% of the genesis supply is set to unlock, with 48% allocated to core contributors and 34% to private investors. This unlocking is expected to release $574 million worth of APT tokens, representing 20% of Q4’s circulating supply. 

Additionally, $91 million worth of APT will unlock towards the Ecosystem category, although the immediate distribution of these tokens may not occur. It is important to note that, before distribution, 80% of these tokens are held by the Foundation, while 20% are held by Aptos Labs. 

These tokens are intended for grants, incentives, and other initiatives. So far, slightly over 20 million APT from this allocation has been airdropped.

Aptos Dip In Network Activity

Network activity on the Aptos blockchain, as measured by transactions and active addresses, decreased slightly in the fourth quarter, but remained at elevated levels compared to the first half of 2023. Average daily transactions decreased 1% sequentially to 483,000, while average daily active addresses decreased 31% sequentially to 60,000.

According to the report, the surge in network activity during Q3 was primarily driven by the integration of the social media platforms Chingari and Oracle Pyth with Aptos. In Q4, two notable events contributed to increased network usage: the Graffio communal art creation event in mid-October and inscriptions towards the end of December.

However, the number of new addresses created per day decreased by 33% QoQ in Q4, following a significant increase of 419% in Q3. The weighted average one-month retention rate also fell by 41% QoQ to 5%, marking the lowest rates since December 2022 for the October and November 2023 cohorts.

Looking ahead, Aptos has outlined key priorities for Q1 2024, which include further enhancing the stability and scalability of the network, expanding partnerships and integrations, and implementing new features and improvements based on community feedback. 

Additionally, the upcoming unlocking of the genesis supply and the subsequent distribution of APT tokens will be a significant event to monitor, as it may impact the token’s price and overall market dynamics.

APT is currently trading at $9.82, which corresponds to a price correction of 5.9% over the past 24 hours.

Featured image from Shutterstock, chart from TradingView.com