The Diem technology assets were acquired by Silvergate Capital, which ended Facebook's attempt to create a payments network. The deal showed how Facebook, now Meta, is left with few regulatory-blessed paths to become a central player in the block chain, a realization which has cost the company plenty of talent, including David Marcus.
Some ex-Meta employees are starting to take up the mantle of the open source Diem blockchain in an effort to realize the vision of a network that is built to serve billions of users and is designed to cater to large corporate customers early on. One such effort, led by ex-Meta employees who only left the company in December, has already banked funding from top web3 investors.
We are the original creators, researchers, designers, and builders of Diem. Mo Shaikh, the CEO of Aptos, wrote in a post last month that the work is far from over.
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The startup says it has closed a $200 million investment led by a16z, with participation from Tiger Global, Multicoin Capital, 3 Arrows Capital, FTX Venture and the like. Silvergate Capital is an investor in the maiden round that the team swears will not use any of the Diem intellectual property.
The equity valuation of the round is $1 billion, according to an investor memo obtained by TechCrunch. The exact figures were not shared by the team.
The Aptos system will be a Layer 1 system, meaning it won't be designed to sit on top of any existing blockchains and will instead build its own network. The team hopes that developers will experiment and build on the platform ahead of a public release.
A number of companies are already engaging with the startup, providing feedback and contributing code.
Today's mainstream networks allow slower transactions and lower fees, but that is not what Aptos is aiming to build. The hope is that they can design a network that is more reliable and predictable for large clients.
There are a lot of ways to scale. Rollups and sharding are techniques that break a block into smaller pieces and then re- connect them for scaling.
Some players think there is a better approach to tackle this challenge.
According to the CTO of Aptos, current blockchains are not as reliable as existing financial rails, and they have seen issues of downtime that last for hours.
Kyle Samani, managing partner of Multicoin Capital, a venture capital firm known for being an early backer of several blockchains, argues that the approach to cross-chain apps makes them inherently fragile.
The debate is framed in a relatively binary way. There is more than one thing. These approaches are not exclusive. While most in the industry have argued in favor of breaking up the state into many pieces, we have argued in favor of using a single-shard performance to maximize the design space for composable crypto apps. He wrote in a post that the conviction led to triple down on Solana through 2020 and a rise in 2021.
While Diem believers like Andreessen Horowitz may rally around a team trying to pick up the mantle of what Facebook was trying to build with Diem and Libra, others in the crypt are not so sure about realizing a vision of web3 originally conceived by Facebook.
To be clear, we have no formal relationship with Facebook and no investment from them.
We are excited about a shared vision for the web3. We don't have to focus on Meta anymore because we can focus on everyone. Our goal is to work with some of the world's largest brands and tech companies to build a web3 platform for everyone.
The challenge is how quickly it can attract developers. The firm is hoping to win developers with the use of Move, an open source programming language.
The team has done extensive testing and auditing on the protocol for many years. He said that the protocol has had no downtime over the years and that they pushed upgrades to the fourth iteration.
The Move programming language has been thoroughly battle tested and is a great environment for building safe, production-grade contracts capable of serving billions of people. We expect Aptos to become a viable contender in the battle for Layer 1.
To make things more attractive for developers, Aptos is considering different paths for their Solidity support.
I have a close relationship with the community. It is clear that it is a multi-chained world, where people have built bridges, solutions that are either solving for scalability or are able to from one L1 to another in the pursuit of larger markets.
We want to be a part of that. We are not here to compete. We want to complement them and the challenges they face, and give them a clear indication that things have to be built from the ground up.
The feedback we have heard from Solidity and Ethereum developers is that they are running up against limitations, and that they are facing challenges where they have to spend hours auditing their smart contracts. Smart contract auditors have a lot of capacity. Those things are becoming more and more pain points. They are looking for other L1s to build on top of native code rather than just going through bridges and assets.
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