APT is the native token of the Aptos platform and is used to pay transaction and network fees on Aptos. All transactions are subject to fees and are paid in APT tokens. Validators can prioritize higher-value transactions and discard lower-value transactions, allowing in-memory blockchains to operate efficiently even when the system is at full capacity. Network fees are designed so that the cost of using Aptos corresponds to the cost of deploying hardware, maintenance and node operations.
In addition, APT tokens can be used for governance voting on protocol upgrades and on-chain/off-chain processes, and to secure the blockchain through a proof-of-stake model. Validators holding a minimum number of staked APT tokens can participate in transaction verification on the Aptos in-memory blockchain and decide the distribution of rewards between themselves and stakeholders. Stakeholders can choose any number of validators to stake their tokens to receive a pre-agreed distribution of rewards, which are distributed to validators and stakers at the end of each epoch.
Currently, the maximum reward rate for stakers is 7% per year, with this amount evaluated each period. However, the maximum staking reward will decrease by 1.5% per year until it reaches 3.25% per year. All reward amounts and mechanisms can be changed via governance votes.
The historical development of APT currency
Aptos was launched in October 2022, and APT was valued at US$13 billion on the day it was launched. However, after the FTX crash, the market plummeted, with APT and other "Sam coins" falling 55.9% between November 7 and December 29, 2022. Its December low of $3.08 valued the network at FDV of about $3.1 billion, down from its valuation at the time of its most recent funding round.
Sentiment across the market is gloomy, and APT is particularly radiant given its limited usage and the threat of prolonged selling pressure from the bankruptcy of its largest investor.
One of the reasons for the soaring price of Aptos: South Korea’s pull
So, why is Aptos still so vigorous after losing the important support of FTX? In addition to the recovery of the crypto market, South Korea plays an integral role in it. On January 26, 2023, the trading volume of APT on the Korean exchange Upbit exceeded US$1 billion, which was 4 times the spot trading volume of Binance, and the spot trading pair of Korean Won KRW had a significant premium.
Kimchi Premium
Before proceeding with the analysis, here is a brief introduction to what Korea’s “kimchi premium” is. As one of the hottest crypto trading markets in the world, the Korean market often has crypto assets that are more expensive than those in other countries. This phenomenon is known as the “kimchi premium.” This is mainly due to the insufficient supply of crypto assets. Because there are too many people in South Korea who want to buy crypto assets, the price of crypto assets has increased. In addition, South Korea itself is an energy-deficient country, and domestic crypto-asset mining activities are not active. This has resulted in it having to introduce a large number of foreign-mined crypto-assets for trading, and the Korean government is worried that crypto-assets will be used for money laundering. Restricting the large-scale flow of related funds, this further exacerbates the situation of insufficient supply and high prices of crypto assets in South Korea.
According to reports, in the past year, South Korea’s crypto asset market prices were on average 10%-20% more expensive than international market prices. The higher the premium, the greater the room for investors to make profits. In addition, South Korea has a strong local currency speculation atmosphere, so the Korean market has always been a must-have for crypto assets.
Aptos seizes the opportunity to enter the Korean market
After the collapse of Terra, there was a vacuum in South Korea's local encryption market, and a new protagonist was urgently needed, so Aptos seized the opportunity to enter the Korean market. Aptos’ emphasis on the Korean market can be seen from one detail. In the white paper released simultaneously on Aptos’ official website, Korean is the only language other than English. In addition, Aptos will also launch the Aptos World Tour Hackathon in 2023. The first stop will be in Seoul, South Korea. From February 1st to February 3rd, Aptos core engineers will personally participate in a period of Three days of hacking and demos.
A series of moves by Aptos have also won it favor in the Korean market. According to data from CoinGecko, about half of APT’s US$2 billion trading volume in the past day came from the Korean won trading pair of the Korean exchange Upbit, and most of the funds were It was engaged in arbitrage trading, buying at low prices and then selling at high prices, which pushed up Aptos’ DeFi trading volume. According to data from DeFi Llama, Aptos’ DeFi transaction volume has increased from US$14 million last month to US$51 million, and this data is still growing rapidly. This time, the price of APT has doubled in just one month. 7 times, and the Korean power behind it played an important role.
Aptos (APT) is a meme coin in South Korea
Regarding why Aptos is so popular in South Korea, as one of the venture capital institutions that invested in Aptos, Alex Shin, co-founder of Hashed, a Korean cryptocurrency venture capital institution, explained on Twitter on the 5th:
“For those who are wondering why APT is up to $17, it’s because Aptos is a meme coin in South Korea. The number one asset class in South Korea is real estate, more specifically apartments, and retail investors call Aptos an apartment. Claiming that if people hold APT, they can one day afford a real apartment.”
This is no joke, it's true. However, Alex Shin revealed in response to a netizen’s inquiry that he did not buy APT himself.
Netizens also explained this homophone: APT has a similar pronunciation to "apartment" in Korean, which makes many Korean investors regard it as a token for investing in apartments, further boosting its popularity in the Korean market.
Conclusion: Behind the popularity of APT tokens are not only its technical and application advantages, but also the driving force of the market. Especially in the Korean market, the APT token has become a special "meme coin". Its popularity not only reflects the enthusiasm of Korean investors, but also demonstrates Aptos' ability to seize market opportunities. In the future, with the further development of the global encryption market, APT tokens are expected to continue to shine in more markets.