New public chains Sui, Aptos, and Linera: The "successors" of Diem backed by top venture capital

Author: Nianqing & Biscuit, Chain Catcher

Today, the public chain project Aptos, founded by former Meta employees, has been reported to be seeking new financing at a valuation of $2.75 billion. Just a few days earlier, another public chain project, Sui, developed by Mysten Labs, was also reported to be seeking to raise at least $200 million at a valuation of $2 billion.

At the end of June, a Layer 1 blockchain named Linera also announced the completion of a $6 million seed round financing led by a16z. Why, in today's heated Layer 1 race with a weakening narrative, are well-known institutions like a16z, FTX, and Coinbase still making significant bets on these new public chains? What makes them special?

The founders of these three public chains are not only former employees of Meta but were also major creators and core developers of the company's cryptocurrency project Diem (formerly Libra) and the crypto wallet Novi.

In 2021, as Diem faced regulatory setbacks, a group of developers working on innovative projects in Meta's crypto department realized that to build new applications for the groundbreaking Web3, they needed to move from the original domain to the crypto field. After leaving Meta, Evan Chang and Sam Blackshear founded the crypto infrastructure development company Mysten Labs, which subsequently launched the new public chain Sui; Mo Shaikh and Avery Ching built the new public chain Aptos based on the open-source Diem codebase.

In early 2022, the crypto-friendly bank Silvergate confirmed the acquisition of Diem's technology and assets, marking the official end of the project. Mathieu Baudet, the chief researcher and engineer of Novi, created Linera, deciding to carry forward the FastPay and Zef protocols he previously developed at Meta.

This is the initial story of the three new public chains, all of which inherit some of the innovative technologies from the once highly regarded Diem project. Because of this, even as the crypto market gradually shifts its attention to L2, top institutions like a16z, FTX, and Coinbase are still injecting substantial funds into these new public chains, with a16z adopting a comprehensive betting strategy, leading rounds in all three projects.

Why do they generate such market enthusiasm? Let's take a look back at Diem.

01 Diem and the Move Language

Diem is a permissioned stablecoin payment system based on blockchain technology. As a crypto project launched by social giant Meta, Diem attracted significant attention from the outset.

The market had high hopes for Diem, believing its launch would change the global payment landscape. Super giants in various fields such as social media, e-commerce, ride-sharing, music, travel, and payments, including Visa, Uber, eBay, Spotify, and Coinbase, all became partners of Diem.

However, the project faced strong opposition from government regulatory agencies in the EU, the US, and other countries due to concerns over monetary sovereignty, financial stability, privacy, and antitrust issues. Originally scheduled for release in 2020, Diem underwent renaming and suspension before ultimately concluding its journey at the end of January this year.

Nonetheless, Diem left behind many important technological "legacies," the most significant of which is the design of a new programming language called Move.

Move Programming Language

Move is a Rust-based programming language initially developed by Facebook for the Diem blockchain. Currently, the Move GitHub codebase is primarily managed by Mysten Labs, and team members from Aptos and Sui are also core developers of Move. Move aims to become the JavaScript of Web3, enabling more developers to quickly build blockchain products.

The semantics of Move are inspired by linear logic. According to the Linera team, Web2 initially lacked the scalability it has today; it was only after the transition from "horizontal scaling" to "linear scaling" around the year 2000 that significant acceleration was achieved. Currently, blockchains prioritize a "sequential" execution model, which allows accounts and smart contracts to interact arbitrarily across a series of transactions but hinders linear scaling. Thus, Linera's name directly indicates that it inherits the characteristics of the Move programming language and will continue to develop and promote a new execution model suitable for "linear scaling."

Moreover, Move's linear logic can define digital assets, treating them like resources that satisfy certain characteristics of linear logic: digital assets cannot be copied; digital assets cannot disappear into thin air.

In short, Move is a smart contract language designed for operating digital assets. Its static type system allows most resource usage errors in smart contract code to be checked by the compiler at compile time, i.e., before deployment, ensuring that smart contracts are no longer as fragile as before.

When designing Move contracts, security is also fully considered. We won't delve into the specific technologies here, but in summary, Move differs from Solidity in that it performs better in terms of security and verifiability, being specifically designed to represent and securely operate on digital assets.

Additionally, Move has learned from the lessons of EVM smart contract languages. Currently, many public chain smart contract languages attempt to replace Solidity, but they fail to consider Ethereum's network effects, aiming to replace EVM rather than Solidity.

Public chains like Aptos and Sui have developed additional frameworks and foundational packages based on Move. Among them, Sui Move has made significant modifications to the original Core Move, with key differences including: Sui uses its own object-centered global storage, addresses represent object IDs, Sui objects have globally unique IDs, Sui has module initializers (init), and Sui entry points take object references as inputs. These changes inherit the security and flexibility of Move while optimizing storage mechanisms and address types, thereby improving network performance and reducing transaction confirmation times.

In addition to the Move language, Diem has two other technical features:

1) It uses a Byzantine Fault Tolerance (BFT) consensus method: Compared to the proof-of-work mechanisms used in some other blockchains, protocols using BFT consensus can achieve high transaction throughput, low latency, and a more energy-efficient consensus method.

2) It iterates based on a widely adopted blockchain data structure: The Diem blockchain is a single data structure that records the transaction history and state over time. This simplifies the work of applications accessing the blockchain, allowing for a unified framework that enables data to be read from any point in time to verify its integrity.

02 Sui, Aptos, and Linera: Who Will Break Out First from L1?

Although they promise not to use any Diem intellectual property owned by Silvergate in building their blockchains, a comparison of the Diem white paper reveals that the three public chain projects—Sui, Aptos, and Linera—inherit certain aspects and functionalities in terms of development language or technical logic.

Next, let's compare the development progress and technical highlights of these three public chain projects.

1. Sui / Mysten Labs

The Sui development team comes from Mysten Labs, with founding members including Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Danezis, and Kostas Kryptos, all of whom participated in the Novi and Diem projects at Meta. Among them, CEO Evan Cheng served as the Director of Blockchain Engineering at Meta from 2018 until September this year.

In December last year, Mysten Labs secured $36 million in financing led by a16z, with participation from Coinbase Ventures, NFX, Slow Ventures, Scribble Ventures, Samsung NEXT, Lux Capital, and others.

In May, Mysten Labs launched the first test network, Sui DevNet, and announced its tokenomics model, declaring the issuance of a total of 10 billion SUI tokens.

Sui Network Economic Model

In July, Mysten Labs sought to raise at least $200 million in Series B financing at a valuation of $2 billion, led by FTX Ventures, and has already secured $140 million in this round.

Currently, the Sui network has launched two test crypto wallets: the official Chrome extension wallet Sui Wallet and the third-party wallet Ethos Wallet, allowing users to experience transfers and NFT minting on the Sui network. In August, Sui will launch an incentivized testnet.

The key to Sui's performance lies in transaction parallelization. In most blockchains, transactions must be ordered and placed into blocks for sequential execution. Sequential execution unnecessarily limits the throughput of these chains, as most transactions are independent of each other. Because Sui requires explicit specification of transaction dependencies, it can process them in parallel. In cases where a few transactions are interwoven, Sui can still sort and execute them sequentially.

Technically, Sui uses the Move language to implement smart contracts, ensuring compliance and security. In terms of consensus protocol, Sui uses BFT consensus for dependent transactions and a Byzantine broadcast algorithm for parallel verification of independent transactions, thus ensuring high TPS while reducing communication between nodes to achieve extremely low latency. Simple transactions can be validated immediately, and complex transactions do not exceed 3 seconds.

Recommended Reading: Can the new public chain Sui, developed by the former Meta team, become the biggest dark horse in Web3?

2. Aptos

Aptos can be said to be the public chain with the fastest development progress and ecosystem start among the three. Technically, Aptos also uses the Byzantine Fault Tolerance (BFT) consensus protocol and the Move programming language to build a more scalable blockchain.

Source: Aptos Blog

In March this year, Aptos completed a $200 million financing round led by a16z, with participation from many well-known VCs including Tiger Global, Katie Haun, Multicoin Capital, Three Arrows Capital, FTX Ventures, and Coinbase Ventures. Subsequently, Binance Labs announced an investment in Aptos Labs, and payment giant PayPal also stated it had participated in the investment, marking PayPal Ventures' first investment in a Layer 1 public chain project.

In May, Aptos launched the registration for its incentivized testnet. According to Aptos's roadmap, the incentivized testnet consists of four rounds, and it is currently in the second round, AIT-2 staking test phase.

Today, Aptos has been reported to be seeking new financing at a valuation of $2.75 billion.

Aptos stated in a blog post that its test network has reached over 20,000 nodes, making it the largest known proof-of-stake node community today. Additionally, the test network can validate and synchronize over 10,000 transactions per second (TPS) with sub-second latency, aiming to exceed 100,000 TPS. Aptos expects to launch its mainnet by the end of September.

In terms of ecosystem incentives, Aptos has held a hackathon and launched an ecosystem grant program at the end of June to develop its ecosystem. According to Aptos, over 100 projects are already building on its network, covering use cases in DeFi, NFTs, gaming, and more. Furthermore, Austin, the former marketing director of Solana, recently announced he will officially join Aptos in August as the Ecosystem Director, bringing significant experience in incubating and expanding global communities in web3, which may greatly assist in expanding the Aptos ecosystem.

Recommended Reading: Is the new public chain battle reigniting? A preliminary overview of the Aptos ecosystem

3. Linera

Linera is the latest to start among the three 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, allowing most account-based operations to be confirmed in fractions of a second.

Linera's founder, Mathieu Baudet, previously worked as an engineer at Meta and helped create the Diem blockchain. As the chief researcher and engineer of Novi, he was a core figure in inventing the FastPay and Zef protocols. These two protocols accelerate transaction speed by completely removing the memory pool and minimizing interactions between validators, and Linera will continue to carry these two protocols forward. Additionally, the founding team of Linera consists largely of former engineers and researchers from Zcash and Meta/Novi.

On June 29, Linera completed a $6 million seed round financing led by a16z, with participation from Cygni Capital, Kima Ventures, and Tribe Capital.

As mentioned above, Linera's name directly indicates its characteristics. Linera will develop and promote a new execution model suitable for "linear scaling." Linear scaling means that it is always possible to double the system's capacity by doubling the number of machines. Currently, blockchains prioritize a "sequential" execution model, which allows accounts and smart contracts to interact arbitrarily across a series of transactions but hinders linear scaling.

In Linera's linear model, operations from different user accounts run simultaneously in different execution threads, allowing for continuous scaling of execution by adding new processing units to each validator. Currently, Linera has not explicitly stated the use of the Move language in publicly available information, only indicating that it is based on Rust, but the technical characteristics of Linera and Move are very similar.

03 Conclusion

As a once-legendary project, Diem has officially concluded, but the members of the Diem team exhibit a "gathering is a fire, scattering is a sky full of stars" spirit. Not only have many key members joined relatively mature crypto projects like Chainlink and Mina, but they have also given birth to three dark horse projects: Sui, Aptos, and Linera.

The market's enthusiasm for these three new public chains seems to stem, at least in part, from a sense of regret over Diem, transferring those high hopes onto its "successors."

From a technical logic perspective, these three new public chains inherit certain advantages from Diem, such as strong scalability and security. With the support of a new programming language like Move, they are likely to attract more developers from traditional markets and more customers from Web2.

On the other hand, while Move represents a significant innovation in smart contract languages, Solidity remains the de facto standard blockchain language, with almost all existing dApps developed using Solidity. Various chains are seeking EVM compatibility to capture the overflow value from Ethereum. The structural differences between Move and Solidity require developers to rewrite entire codebases to migrate to Move.

Currently, these three new public chains can be considered to have "a good start and promising future," gaining initial market recognition through Diem's technological approach. In some respects, their performance is even somewhat exaggerated, with Aptos and Sui reaching valuations of over $2 billion in just about six months since their establishment, which is quite rare in the crypto industry known for high valuations, even during the euphoric bull market phase.

The higher the market expectations, the more venture capital firms chase after them, and the potential bubbles and risks of the projects will also rise to some extent, as reflected in issues seen with projects like Terra. If the adoption rate of Layer 2 continues to rise significantly, will these new public chains face a "misalignment with the times" situation? Are they merely the latest narrative and capital games of venture capital firms? These questions may be answered in the next market cycle.