New Public Chain Sui, Aptos and Linera: ‘The Heirs’ of Diem being bet by Top VCs
Author: Irfan and @BlockCookies, ChainCatcher
Today, Aptos and Sui, both of which were created around six months ago, are trying to raise new rounds of funding at valuations of over $2 billion, this is quite rare even in the bullish phase of the crypto industry, which is known for its high valuations.
Aptos, a public chain project founded by former employees of Meta, was revealed to be seeking a new round of funding at a valuation of $2.75 billion. A few days earlier, Sui, another public chain project of Mysten Labs, was also revealed to be seeking at least $200 million at a valuation of $2 billion.
At the end of June, a Layer1 blockchain called Linera also announced the completion of a $6 million seed round led by a16z. Why are well-known institutions like a16z, FTX, Coinbase and others betting big on these new public chains when the Layer1 track has become white-hot and the narrative has weakened, and what makes them special?
The founders of the three public chains are not only former employees of Meta, but also the main founders and core developers of the company’s cryptocurrency project Diem (formerly known as Libra) and its cryptocurrency wallet Novi.
In 2021, as Diem was suffering a regulatory setback, a group of developers working on innovative projects in the Meta cryptography division realized that to build new applications for the groundbreaking Web3 that were different from those of the past, they had to work outside the original domain and into the crypto domain. After leaving Meta, Evan Chang and Sam Blackshear founded Mysten Labs, a cryptographic infrastructure development company, and later launched Sui, a new public chain; Mo Shaikh and Avery Ching built a new public chain, Aptos, based on the open source Diem code base.
In early 2022, crypto-friendly bank Silvergate confirmed the acquisition of Diem project’s technology and assets, officially ending the project. Linera was founded by Mathieu Baudet, a principal researcher and engineer at Novi, who decided to build on the FastPay and Zef protocols he had developed at Meta.
This is the initial story of the three new public chains, all of which inherited more or less the innovative technology of the highly regarded Diem project, and that is why top institutions like A16Z, FTX and Coinbase are still pouring money into these new public chains, even as L2 attracts the attention of the crypto market. A16z has taken an all-in bet approach, leading rounds in all three projects.
Why do they generate so much market enthusiasm? Let’s first look back at Diem.
Diem and Move
Diem is a blockchain-based licensed stable coin payment system As a crypto project launched by social giant Meta, Diem has attracted attention since its debut.
The market has placed high expectations on Diem and believes its launch will change the world’ s payments landscape. Social media, e-commerce, ride-sharing, music, travel, payments and other supergiants, such as Visa, Uber, eBay, Spotify, Coinbase and others, have become Diem’s partners.
But the project provoked strong opposition from government regulators in the EU, the US and other countries based on issues of monetary sovereignty, financial stability, privacy and anti-monopoly. Diem, which was due to be released in 2020, was renamed, suspended and finally retired at the end of January.
But Diem left behind a number of important technical “legacies”, the most important of which is its design of a new programming language, Move.
The Programming language — — Move
Move is inspired by linear logic. According to Linera’s team, Web2 did not start with the scalability that it has today, but it was the transition from “horizontal scaling” to “linear scaling” around 2000 that made it massively faster. Currently, blockchains give preference to a model of “sequential” execution, which allows an account and a smart contract to interact arbitrarily in a series of transactions, but prevents linear scaling. So Linera’s name is a direct indication that it has inherited the Move programming language and continues to develop and promote a new execution model for “linear scaling.”
In addition, the linear logic of Move defines digital assets. In this language, digital assets are like resources, satisfying some of the characteristics of linear logic: digital assets cannot be copied; Digital assets cannot disappear into thin air.
In short, Move is a smart contract language made for manipulating digital assets. And Move’s static type system allows smart contract code to be checked for most of its resource usage errors by the compiler before it is deployed (at the compilation stage), ensuring that smart contracts are no longer as vulnerable as they once were.
The Move contract was also designed with security in mind. We won’t explain the specific technology here, but in short, Move differs from Solidity in that Move performs better in terms of security and verifiability and is specifically designed to represent and securely manipulate digital assets.
In addition, Move draws lessons from the EVM smart contract language. Currently, many smart contract languages for public chains are trying to replace Solidity, but in reality, they don’t take into account ethereum’s network effects and just want to replace EVM, not Solidity.
Aptos, Sui and other public chains have developed additional frameworks and base packages on the basis of Move. Among them, Sui Move has made major changes to the original version of Core Move. The main differences include: Sui uses its own object-centric global storage, address represents object ID, Sui object has a globally unique ID, Sui has module initializer (init), Sui entry point takes object reference as input. These changes inherit the security and flexibility of Move, and provide certain optimizations to the storage mechanism, address types, etc. to improve the network performance and reduce the validation time of transactions.
In addition to the Move language, Diem has two other technical features:
1） Use of Byzantine Fault Tolerance (BFT) consensus method: protocols using the BFT consensus method enable high transaction throughput, low latency, and a more energy-efficient consensus method than the proof-of-work mechanism used in some other blockchains.
2） Adopt and iterate on a widely adopted blockchain data structure: The Diem blockchain is a single data structure that records the history and status of transactions over time. Enables the work of applications that access the blockchain to be simplified so that there can be a unified framework that allows data to be read from any point in time to verify the integrity of that data.
Sui, Aptos, and Linera: Who will be the first dark horses in L1?
While promising not to use any Diem IP owned by Silvergate in building the blockchain, comparing Diem’s white paper, you will find that the three public chain projects, Sui, Aptos and Linera, inherit some aspects of the development language or technical logic.
Next, we will compare the development progress and technical highlights of these three public chain projects.
1. Sui/Mysten Labs
Sui’s development team came from Mysten Labs, the founding team includes Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Danezis, and Kostas Kryptos, all of whom worked on Novi and Diem projects at Meta. Among them, CEO Evan Cheng served as Director of Engineering and Technology for the development of the Meta blockchain from 2018 until September of this year.
Last December, Mysten Labs received $36 million in a funding round led by a16z, with participation from Coinbase Ventures, NFX, Slow Ventures, Scribble Ventures, Samsung NEXT, Lux Capital, and others.
In May, Mysten Labs released its first test network Sui DevNet and the token economics model, announcing that it would launch a total of 10 billion Sui tokens.
In July, Mysten Labs was seeking to raise at least $200 million in Series B funding at a $2 billion valuation, led by FTX Ventures, which has already raised $140 million in that round.
At present, Sui Network has launched two encrypted wallets for testing: Sui Wallet, an official Chrome plug-in Wallet, and Ethos Wallet, a third-party wallet that allows users to experience the Sui Network for transferring and casting NFTs. Sui will launch the motivation test network in August.
The key to Sui performance is transaction Parallelization. In most blockchains, transactions must be ordered and placed in blocks for sequential execution. Sequential execution unnecessarily limits throughput on these chains, since most transactions are independent of each other. Because Sui requires the subordination of the transaction to be explicitly stated, it is able to process them in conjunction with each other. In cases where a few transactions are intertwined, Sui can still sort them and execute them sequentially.
In terms of technology, Sui uses Move language to realize smart contract, ensuring standardization and security. In terms of consensus protocol, Sui uses BFT consensus for affiliated transactions and uses Byzantine broadcast algorithm for parallel verification of independent transactions. Therefore, high TPS is guaranteed while communication between nodes is reduced to achieve extremely low latency. Simple transactions can be verified immediately, and complex transactions take less than 3 seconds.
Aptos is the fastest growing public chain of the three in terms of development progress and the start of the ecosystem. Technically, Aptos also uses the Byzantine Fault Tolerance (BFT) consensus protocol and the Move programming language to build a more scalable blockchain.
In March, Aptos closed a $200 million round of funding led by A16Z, Tiger Global, Katie Haun, Multicoin Capital, Three Arrows Capital, FTX Ventures, Coinbase Ventures and other prominent VCs. Since then, Binance Labs has announced an investment in Aptos Labs. Payment giant PayPal also said it was involved in the venture, which is PayPal Ventures’ first Layer1 public chain project.
In May, Aptos launched its Incentive Test Net registration. The Incentive Test network has four rounds in Aptos roadmap and is currently in the second aIT-2 pledge testing phase.
Today, Aptos was again revealed to be raising a new round of funding at a valuation of $2.75 billion.
In a blog post, Aptos said its test network has reached more than 20,000 nodes, making it the largest community of proof-of-stake nodes. At the same time, the test network can validate and synchronize over 10,000 transactions per second (TPS) with sub-second latency, and is on its way to reach over 100,000 TPS. Aptos expects to launch the Aptos mainnet by the end of September.
In terms of eco-incentives, Aptos has hosted a hackathon and also launched an eco-funding program in late June to grow its ecosystem, which according to Aptos has over 100 projects built on the web with use cases covering DeFi, NFT, games, and more. In addition, Austin, the former head of marketing at Solana, recently announced that he will officially join Aptos in August as the ecosystem director. Austin spent most of his web3 career focusing on incubating and expanding the global community, and his experience may be of great help to Aptos’ ecological expansion.
Linera is the latest to get off the ground compared to the other two projects and is still in the early stages of development. Its goal is to create a low-latency blockchain that can scale as easily as Web2 applications, enabling most account-based operations to be confirmed in a fraction of a second.
Linera founder Mathieu Baudet previously worked as an engineer at Meta and helped create the Diem blockchain. As a principal researcher and engineer at Novi, he was a central figure in inventing the FastPay and Zef protocols These two protocols speed up transactions by completely removing memory pools and minimizing interactions between authenticators, and Linera continues to build on these two protocols. In addition, Linera’s founding team is comprised primarily of former Zcash and former Meta/Novi engineers and researchers.
On June 29, Linera completed a $6 million seed round led by A16Z, with the participation of Cygni Capital, Kima Ventures and Tribe Capital.
As mentioned above, Linera’s name is a direct indication of its characteristics; Linera will develop and promote new execution models for “linear scaling”. Linear scaling means that it is always possible to double the capacity of a system by doubling the number of machines. Currently, blockchains give preference to a model of “sequential” execution, which allows an account and a smart contract to interact arbitrarily in a series of transactions, but prevents linear scaling.
In Linera’s linear model, operations for different user accounts run simultaneously in different threads of execution, by which execution can always be scaled by adding new processing units to each verifier. At present, Linera has not explicitly developed in Move language in its the public documentation, only stated that it is based on Rust language. But from the technical characteristics of Linera, the logic of the two is very similar.
Although Diem, the former king of the world, has come to an end, several key members of the Diem team have joined Chainlink, Mina and other relatively mature crypto projects, and three dark horse projects, Sui, Aptos and Linera, have been born.
The market’s enthusiasm for these three new public chains seems to be more or less driven by the regret for Diem, and they have transferred such high hopes to the “successors”.
From a technical point of view, the three new public chains inherit some of the advantages of Diem, such as strong scalability and security, and with the support of a new programming language like Move, they will not only attract more developers from traditional markets but also attract more customers from Web2.
But on the other hand, while Move is an important innovation in smart contract languages, Solidity is still the current standard blockchain language, with almost all existing dApps developed in Solidity and chains seeking EVM compatibility to take on the spillover value of Ethereum. The language structure of Move and Solidity is so different that developers will need to rewrite the entire codebase to migrate to Move.
So far, these three new public chains have started well and have a promising future, With Diem’s technical ideas, they have won the initial recognition of the market, and their performance in some aspects is even quite exaggerated. Aptos and Sui reached a valuation of more than $2 billion in about half a year after their establishment, this is quite rare even in the bullish phase of the crypto industry, which is known for its high valuations.
The higher the market expectation and the higher the VCs’ pursuit, the higher the potential bubble and risk of the project will be, as projects like Terra have repeatedly shown. And if the adoption of Layer2 continues to soar, will these new public chains be born at the “wrong time”? Are they just another round of forced narrative and capital play by venture capital firms? These questions may be answered in the next market cycle.