Former Meta employees seek to revive Diem with Aptos blockchain in the midst of struggling crypto markets
Diem, Facebook’s parent company Meta Platform Inc.’s doomed crypto payment project came to an untimely end in early 2022 after years of attempts to gain regulatory acceptance, and the assets were sold, including the blockchain technology that supported it.
Reluctant to accept this fate, former Meta veterans Mo Shaikh and Avery Ching founded the start-up Aptos Labs as CEO and Chief Technology Officer, respectively. The goal of Aptos was to revive Diem’s technology and use the code language Move to produce secure infrastructure that could compete with current blockchains such as Bitcoin and Ethereum. The founders also wanted to escape from the corporate and government bureaucracy that had killed the original project and release it with open source code so that it would be safe, secure and scalable.
This bold philosophy attracted the attention of Kyle Samani, CEO of Multicoin Capital, when Shaikh and Ching presented him with their idea, he told Fortune.
“I love the fact that they said ‘Fan this,’ like ‘I do not care what Facebook and the government say, we’ll make it happen,'” Samani said.
After that, Shaikh and Ching quickly found additional venture capital financing for their startup and raised $ 200 million in financing in March from a list of prominent investors including Andreessen Horowitz, Multicoin Capital, Katie Hawn and FTX Ventures. The valuation of the company is now reportedly between 1 billion and 2 billion dollars.
“Aptos is for people who want to build software that affects billions of other people,” Shaikh said at the time of the fundraiser.
At the moment, the platform is already capable of scaling to 10,000 transactions per second, but Shaikh said it is well on its way to more than 100,000. In comparison, Bitcoin can support seven transactions per second, Ethereum 30 per second and blockchains like Solana around 2700 per second. The company has entered into partnerships with major crypto exchanges Binance and Coinbase, peer-to-peer video infrastructure platform Livepeer and the NFT platform Rarible.
“They build next-generation social media platforms, rich non-fungible token experiences, Web3 games, creator-first media and entertainment businesses, cheap and secure payments, DeFi-integrated fintech products and much more,” Shaikh added.
Apto’s blockchain is already in the testing phase, and users are welcomed into an “incentivized test network” where testers are rewarded with tokens for their participation. The next phases that will lead to the final launch of the blockchain to full production are expected to be completed by the end of 2022.
Although Aptos has had a fairly steady launch so far, it may not be all praise for the startup. The crypto markets have been stormy and it is a bad time for tokens. The largest markets, such as bitcoin and Ethereum, have lost more than 60% of their value in 2022 since their all-time highs in November. Market crash followed the collapse of TerraUSD “algorithmic” stablecoin and the sister currency Luna lost 99% of its value in May, wiping out almost $ 60 billion in value.
These market conditions may prove unfavorable for a brand new blockchain, and its own native cryptocurrency, which is trying to compete against struggling markets.
In addition to this, Shaikh is facing a lawsuit filed by Shari Glazer and her company Swoon Capital alleging that he deprived her of a fair share of a “blockchain technology investment” in a “fraud scheme”.
Glazer, whose family owns large sports franchises including the Tampa Bay Buccaneers NFL team and Manchester United football club, wrote that she entered into a consulting deal with Shaikh and offered him $ 35,000 to identify potential blockchain companies that Swoon Capital could buy.
In the complaint, she said that after several meetings and telephone conferences, she agreed to make him an equal partner in venture prospects and developed a business plan. During these discussions, she claims that they reached an oral agreement to share the profits “50/50”, and Glazer also agreed to provide an initial investment of 10 million dollars and secure another 10 million dollars from Fox.
She then says she introduced him to her “extensive network of contacts in the sports, media and blockchain industries.”
In response, Shaikh’s lawyers said that an oral agreement would not have legal significance because the consultancy agreement could only be amended in writing, and it was not. Shaikh also denied that there has ever been such an agreement discussed with Glazer as described. Shaikh has filed a motion to dismiss Glazer’s lawsuit.
Although the lawsuit is ongoing and the markets can withstand a “crypto winter”, Shaikh and Ching have not slowed down the pace of launching the Aptos blockchain later in 2022.
