Ex-Meta Employees Aim to Revive Diem and Build the Next Big Blockchain

10 July 2022, 19:00 GMT+0000
Updated by Geraint Price
10 July 2022, 19:00 GMT+0000
In Brief
  • Two former employees working on Meta's Novi wallet are testing a new scalable blockchain Aptos.
  • Aptos is a layer 1 solution built from scratch, targeting lower fees and higher transaction throughput.
  • Aptos Labs is facing a lawsuit from a member of the Glazer family who alleges that she was cut out of an agreement to co-found the company.
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Two former Meta employees are developing the Aptos blockchain using Diem’s open-source technology to create an L1 blockchain for enterprises.

Co-founders of Aptos Labs, Avery Ching, and Mo Shaik, pitched the idea to use Diem’s open-source codebase to Multicoin Capital co-founder Kyle Samani in early Dec 2021.

The pitch sat well with Samani’s co-founder Jain, and the ex-Meta duo was given the green light and seed funding to proceed.

Since then, the startup has attracted $200 million of backing from major crypto VCs, including a16z, Katie Haun, FTX Ventures, and others, and hopes to create a scalable general-purpose blockchain for non-fungible tokens, social media, and decentralized finance.

The project will be coded using the “Move” language developed at Meta. It will be incompatible with the Ethereum Virtual Machine.

Founders met at Meta and bonded over basketball

Shaik and Ching, CEO and CTO of Aptos Labs, first met in 2021 and bonded over a mutual love of basketball at Meta. Both worked on the Diem project, designed to be a global digital currency for transferring money internationally.

The project was not well received by regulators, and Meta eventually had to settle for the pilot of Novi. This digital wallet will soon be discontinued. Shaik worked on strategic partnerships, while Ching served as a senior software engineer.

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Diem’s fate was sealed when Silvergate Bank bought Diem’s assets for use on its upcoming proprietary blockchain. Aptos will not use any of Diem’s intellectual property owned by Silvergate.

Scalability the goal

Aptos joins a crowded space of Layer 1 blockchains vying for a slice of Ethereum’s stake in decentralized finance by claiming faster speeds and cheaper fees. The company aspires to reach 100,000 transactions per second. In early June, it was processing around 10,000 transactions.

To handle scaling, Ethereum proponents advocate using roll-ups or so-called Layer 2 solutions, and sharding, both of which break up a blockchain and reconnect the pieces.

But Samani is critical of this approach, which he believes adds complexity and latency and contributes to the fragility of cross-chain applications through bridges.

The founders are targeting the enterprise blockchain space for the next cohort of users. They are approaching social media, entertainment, and gaming companies to discuss possible partnerships. Ching told Fortune that they eventually want everyone to use Aptos.

The blockchain is undergoing tests with developers, with plans to launch later this year. It has yet to publish a white paper or any information on how its “tokenomics” will work.

Company now faces lawsuit

Concurrently, the company is facing a lawsuit.

Shari Glazer, an entrepreneur and philanthropist, claims that she and Shaik had reached an oral agreement to become co-founders of the project, with plans to bring on Ching as an employee. Glazer alleges that Shaik cut her out of the deal by seeking external funding.

Shaik has filed for Glazer’s lawsuit to be dismissed, affirming that Glazer had been interested in the project purely from a venture capital perspective rather than a founder perspective. Samani said Multicoin supports Shaik and Ching and that Glazer’s claims hold no water.

Mysten Labs, another Web3 startup, has risen from the ashes of Meta’s failed Diem project to build Web3 infrastructure with a few former Meta engineers. The company is developing a blockchain with Move, hoping to reach a transaction throughput of 200,000 transactions per second.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.