Months after launching late last year, Aptos Labs became a unicorn by promising to offer a blockchain that was faster and more stable than rival efforts.
But after its technology got put to the test by the public for the first time this week, observers weren't super-impressed. The price of its newly trading token fell by more than 40%. And investors and enthusiasts complained that Aptos' blockchain was processing transactions more slowly than expected.
Even co-founder Mo Shaikh acknowledged in a tweet Tuesday that the public debut of his Palo Alto startup's technology and token "could have gone better."
Shaikh expressed optimism that things will improve. The transaction pace is slow because the network is just starting, he said. It will pick up as more projects are built on the company's blockchain, he said.
"Building a decentralized protocol from the ground up is tough!," he said in the same tweet.
Aptos representatives did not immediately respond to a request for comment.
Others weren't convinced that Aptos — legally Matonee Inc. — will work out its bugs anytime soon. Many blockchain projects that predate Aptos have made similar promises about speed and the ability to scale up, Ryan Watkins, co-founder of cryptocurrency-focused hedge fund Pangea Fund Management, told The Defiant, an industry-focused news outlet. Those have largely been unrealized.
What's happening with Aptos is "a story we've heard before," Watkins told The Defiant. The startup's technology, he continued, "ultimately faces a long road like every other chain that's come before them."
The brouhaha was the result of the opening of Aptos' blockchain to the public on Monday and the beginning of public trading of its eponymous token on Tuesday.
Aptos token's price fell
Tokens serve as the currency of blockchain projects. Blockchain operators sometimes sell them to investors to raise cash or issue them to developers or miners to reward them for participating in their ecosystems. Tokens can also be used to pay for services recorded on the blockchain.
In Aptos' case, it reportedly gave away 510 million of its first 1 billion tokens to community members. It gave another 190 million to core developers on its service and divided the remaining 300 million between private investors and the Aptos Foundation, whose mission is to support adoption of the network.
After debuting at $13.73 each — at least according to CoinGecko, which tracks cryptocurrency prices — the aptos token quickly fell. Thursday afternoon, it was trading at $7.30 a piece. The total value of all the tokens in circulation — about 130 million — was around $950 million, according to CoinGecko.
In addition to the price plunge, some investors and cryptocurrency enthusiasts took to Twitter and other online forums to complain about the performance of Aptos' blockchain. The startup's founders had projected the system would handle three times the amount of transactions per second that Solana's rival blockchain does. But the network reportedly moved at a much slower pace than that on its first day.
Even so, the company, which has has designed its blockchain to be used in gaming, social networks, media and entertainment and finance, asserted in a tweet Monday its system was "performing as expected."
Shaikh and co-founder Avery Ching launched Aptos last year after leaving Meta Platforms Inc. (Nasdaq: META), where they had worked on the tech giant's cryptocurrency effort. They left Meta last fall, just before it started to wind down that project.
Aptos raised $400 million total in jumbo-sized seed and Series A rounds earlier this year. Its investors include Andreessen Horowitz, FTX Ventures and cryptocurrency exchanges Coinbase and Binance.
