PONTEM x FERUM: FIRESIDE FRIDAY RECAP

On March 8, Pontem hosted a community call with Ferum, an asset-agnostic, consolidated limit order book (CLOB) building on Aptos.

You can listen to the full recording on Twitter, or Discord.

Unleashing Aptos Talent: Hackathon for Fueling Innovative Projects and Ideas

The Aptos ecosystem is endowed with a plethora of highly skilled teams diligently working towards building innovative solutions. However, there is a problem with finding the funds they require to fuel their projects and bring them to fruition.

To kick off the discussion Soju from Ferum suggests an ecosystem-style hackathon that will serve as an opportunity for these teams to receive support and funding to bring their ideas to life. By leveraging the expertise of experienced teams, the Aptos ecosystem can thrive and new projects can flourish.

Additionally, the incubation portion of this is super important as it provides the selected teams with the necessary resources, mentorship, and guidance to refine their ideas, receive feedback,  and transform them into viable projects.

Exploring the Future of DeFi on Aptos

Despite the potential of Aptos, there are still challenges to overcome. Gas fees, though lower than other platforms, can still be expensive, and the delegation of gas fees is yet to be fully realized.

Nevertheless, there are several products and primitives that are garnering attention and could potentially onboard more users, and shape the future of DeFi on Aptos.

Some of these products include:

1. User-Facing Applications:

Decentralized applications that can provide solutions for payments, lending, and other functionalities can help onboard more users to  Aptos.

2. Infrastructure and Tooling Products:

Infrastructure and tooling products that facilitate the development of DeFi applications such as MultiSig solutions, liquid staking, gas fee delegation, and other functionalities that can enhance the overall user experience are crucial for creating a robust ecosystem that can attract more developers and users.

3. Investment Products:

Vault strategies could potentially attract investors, as it reduces gas costs while automatically compounding interests for users. Additionally, the potential for leveraging the options market, particularly for yield farming and other investment strategies, presents an exciting opportunity for growth, and could further bridge the gap between traditional and decentralized finance, bringing more users into the Aptos ecosystem.

4. Gaming:

Exploring the intersection of gaming and DeFi can lead to innovative applications that can drive adoption and engagement among users.

The Aptos Advantage: Building a Trustworthy Blockchain with Responsible Development

Despite criticism about its relatively low number of users compared to other blockchains,  Aptos is on par with popular chains such as Arbitrum, and Avalanche, as well as various layer-2 and alternative layer-1 solutions given that it is built on an entirely new language.

Interestingly, Aptos has seemingly avoided the speculative and potentially harmful "Degen" products that have plagued other new crypto ecosystems, thanks to a trusted group of applications that foster a culture of accountability and responsibility among developers.

This distinguishes Aptos from other blockchains during their early launches, where issues arose due to low-quality open-source implementations and rampant code copying.

The Raydium Effect: Influence of Early Success on Development Practices on Solana

Unlike on Ethereum where most of the projects are open source, there are a majority of closed source projects and closed repositories on Solana, in addition to the presence of single signer upgrade authority in smart contracts, which challenges the traditional concept of contract immutability and trust.

The closed-source trend on Solana may have been driven by the early success and popularity of projects like Raydium and Serum. As new projects sought to emulate their success, they followed in the footsteps of these projects and chose closed-source approaches.

However, this has led to questions on the trustworthiness of closed-source projects and the reliance on third-party infrastructure for end users.

Beyond the Hype: Examining Solana's Evolution, Challenges, and Opportunities

One significant event that Soju indicated as a turning point for Solana was the launch of Serum, a decentralized exchange that showcased the incredible speed of Solana, attracting attention from developers and investors alike.

Early adopters, such as Alameda Research, played a crucial role in bootstrapping Solana and driving adoption, other institutional players like Jump Trading and Ledger also contributed to the growing interest in Solana among the institutional community.

However, despite the initial excitement and adoption, Solana has faced challenges, particularly in terms of reliability. Some institutional players have expressed concerns about the stability and reliability of the Solana network, which has led to a more conservative deployment of funds.

Nonetheless, Solana's high throughput and low transaction fees offer unique opportunities for various use cases that are not feasible on other blockchains like Ethereum.  

Aptos sets itself apart from other high throughput chains by leveraging the lessons learned from Solana's challenges and addressing them with a commitment to exceptional reliability. Although most of the institutional users are still hesitant to adopt Aptos due to how new it is.

Building a Solid Ecosystem for Long-term User Retention

Solana experienced rapid user onboarding but struggled with user retention as many low-quality projects made it to the mainnet, before high-quality ones. This is why projects building on Aptos are dedicated to spending more time building a solid ecosystem before the rate of adoption becomes too massive.

NFTs also emerged as a popular use case on Solana due to its low gas fees as users were able to quickly onboard and participate in NFT speculation. The Aptos Foundation is also focused on NFTs and has been making efforts to integrate DeFi and NFTs, recognizing the potential for NFTs to serve as access tokens for DeFi projects.

This could create more accessibility and gamification opportunities for NFT projects, and enable a wider intersection of DeFi and NFTs on Aptos. We at Pontem have also been exploring initiatives like open permissionless farming pools, where any project can incentivize liquidity provision with their NFTs as access tokens.

What's Next for Pontem? Anticipated Updates to Enhance the Ecosystem

Pontem has an exciting roadmap ahead with a range of promising updates on the horizon. Some of these key updates include:

1. Concentrated Liquidity:

Concentrated liquidity promises to make the markets more capital-efficient. By optimizing the price impact for trades, and eliminating impermanent losses. Thereby providing a better experience for traders and market makers alike.

2. Introduction of Prop Trading Firms:

The introduction of prop trading firms and market makers on the Pontem is expected to bring a new level of sophistication to the ecosystem. This is anticipated to increase liquidity and adoption, providing more opportunities for users to engage in various activities on-chain.

3. Wallet Upgrades:

On the wallet front, the Pontem team is working on some account abstraction features which are requirements from the Aptos protocol upgrade to enable things like gasless transactions or delegating gas fees.

4. Integrating Move-VM with Ethereum:

Looking beyond the short term, Pontem is exploring ways to enable the Move Virtual Machine to work on Ethereum and is exploring several frameworks that will facilitate a lot of use cases such as cross-chain swaps from Liquidswap to Ethereum without maintaining solidity code bases that incur a lot of technical debt.

5. Research on Game Theory for Liquidity Pools:

Pontem is closely monitoring game theory and the changes in pain curves related to liquidity provision. Inspired by Andre's recent project that tackles the imbalance of incentives between liquidity providers and stakers/voters, Pontem is committed to iterating and enhancing its models.

Sui Move vs. Aptos Move

Sui Move operates with a central pool of objects, while Aptos Move takes a different approach by using own objects. This distinction has significant implications for transaction throughput. In Sui Move, transactions on own objects can theoretically achieve higher throughput, as updates to the state of these objects can occur seamlessly and rapidly.

This could potentially revolutionize use cases such as gaming experiences where upgrades and updates are frequent, allowing for a seamless and immersive user experience.

In terms of consensus mechanisms, Aptos employs a Byzantine fault tolerance consensus mechanism which is derived from HotStuff, a battle-tested protocol used in various blockchain networks. This gives Aptos a solid foundation in terms of consensus. However, Sui handles consensus more innovatively.

Balancing Innovation and Security: Insights from Solana

One of the key lessons learned from Solana's journey is the need for caution when pushing the boundaries of what is possible. While Solana has introduced groundbreaking features and capabilities, chain halts and other issues have highlighted the importance of taking a measured approach to development and deployment.

Moving too quickly without thoroughly testing and evaluating the impact of changes can lead to unintended consequences and disruptions. This mindset prioritizes the long-term success of the ecosystem over short-term gains, and it requires a delicate balance between innovation and security.

As Alejo highlighted, there are several potential areas for exploration, including the development of secure environments to safely test experimental features and applications, in addition to implementing mechanisms like withdrawal periods, transparent upgrade authority, and usage limits to safeguard against possible hacks or spam attacks.

Furthermore, effectively managing user influx and transaction volume is vital to ensuring smooth operations. Implementing measures to control borrowing, for instance, can mitigate excessive risk-taking by users and minimize the potential for adverse outcomes such as congestion and spam.

ABOUT FERUM

Ferum is a cutting-edge platform on Aptos that offers an asset-agnostic, consolidated limit order book (CLOB) solution, providing unprecedented control to liquidity providers.

This consolidation of liquidity creates a unified order book, enhancing the trading experience for users by providing them with access to a larger pool of liquidity. Additionally, market makers can benefit from increased trade volumes, resulting in improved pricing and execution.

ABOUT PONTEM

Pontem is a product development platform that enables global financial inclusion through blockchain technology. Pontem is developing infrastructure and decentralized tools for the fastest and most scalable Layer 1 blockchain – Aptos.

The Pontem Wallet is the gateway to the Aptos ecosystem available for Chrome,  Firefox, and iOS. Pontem Wallet users can send and receive tokens, connect to decentralized applications, and explore the Aptos ecosystem.

As a result of its partnership with Aptos, Pontem has developed foundational dApps like the Move Playground IDE, Liquidswap AMM, and ByteBabel code translator.