Original | Odaily Planet Daily (@OdailyChina)
Author | DingDang (@XiaMiPP)
On February 24, Backpack CEO Armani Ferrante announced a staking-to-equity conversion plan, allowing users who stake Backpack's native token for at least one year to exchange these tokens for real company equity at a fixed ratio. The company has reserved 20% of its equity for this plan.
This brief statement conveys far more information than a conventional TGE narrative.
In traditional TGE narratives, users are seen as traffic and community token holders; in this design, Backpack attempts to elevate users from product users to legal company owners.
The question is: Can it really work? Is this a financial innovation or a high-risk experiment dancing on the edge of regulation? Does it change the power structure, or is it just a more advanced form of chip management? To understand this, we must look back at Backpack's own history.
Backpack: A Company Rising from the Ruins
Backpack is a "wallet + exchange" integrated platform centered on the Solana ecosystem, founded by Armani Ferrante, a former member of FTX and Alameda Research. It was established after the collapse of FTX, emphasizing compliance and user custody.
However, unlike the "trading first, ecosystem later" development path of centralized exchanges like Binance, Backpack's path is the reverse. It started with a wallet and NFTs, gradually accumulating users, community, and technical foundations, and eventually launched an exchange.
Looking back at Backpack's history. In 2022, the collapse of FTX not only tore apart the credit structure of the entire crypto industry but also directly impacted projects associated with it. Backpack had just completed a $20 million funding round led by FTX Ventures and Jump Crypto before FTX's collapse. But as the empire crumbled, about 80% of Backpack's operating funds evaporated. At that time, Backpack was positioned as a "wallet + xNFT operating system," aiming to provide Solana users with a safer, integrated entry point, avoiding reliance on centralized platforms.
In April 2023, during the bear market trough, Backpack quietly launched the Mad Lads NFT series, with a minting price of 6.9 SOL. It quickly became one of the top NFT communities on Solana, with the floor price once reaching 229.4 SOL. Today, despite the overall decline of NFTs, the Mad Lads floor price remains at 18.8 SOL, more than double the original minting price.
In November of the same year, Backpack obtained a Dubai VARA license and launched Backpack Exchange, though it was only in a limited testing phase at the time. By then, it had accumulated user trust through its wallet and NFTs, leveraging the exchange to monetize traffic. In February 2024, Backpack completed a $17 million Series A funding round, valuing the company at $120 million. In January 2025, it acquired FTX Europe's assets for $32.7 million, obtaining a European MiFID II license, further strengthening its compliance foundation and committing to handle FTX EU customer claims.
Backpack was born with a silver spoon but rebuilt from the ruins. After nearly three years, Backpack has accumulated a trading volume of over $400 billion and user assets exceeding $350 million.
Now, it is poised for a greater leap.
Token Issuance Plan and Equity Linkage
On February 17, Backpack announced the start of identity verification before TGE, the first step for users to claim tokens.
According to Backpack's token economic model, the total token supply is 1 billion. The pre-IPO total supply is 625 million tokens (62.5%), released in three phases:
- Phase 1 (TGE): Releases 25% of the total supply, or 250 million tokens. Of these, 240 million (24%) are allocated to points holders, and 10 million (1%) to Mad Lads holders. This phase is 100% allocated to users, with no internal team share.
- Phase 2 (Pre-IPO): Accounts for 37.5%, or 375 million tokens, as "growth-triggered unlocks," released gradually based on key milestones (such as regulatory approvals, new product launches, and geographic expansion).
- Phase 3 (Post-IPO): Also accounts for 37.5%, or 375 million tokens, deposited into company treasury, locked for one year after IPO, for the team and investors.
From its token distribution plan, we can already see that token issuance is closely tied to an IPO. Backpack is currently negotiating terms for a new $50 million funding round at a valuation of $1 billion. At this valuation, the 20% equity reserved is worth $200 million.
In the short history of the cryptocurrency industry, token issuance has quietly evolved from an optional financing tool to an almost "instinctive choice" and default path for nearly all projects. As users, we are familiar with this method, but Backpack's approach goes beyond what we know.
From an industry perspective, this model fills a gap. Coinbase successfully IPOed in 2021 but never issued a native token; DeFi projects like Uniswap issued governance tokens but did not pursue an equity listing. Backpack is attempting a "dual-track" system: tokens for community incentives and equity for long-term ownership, which is unprecedented in the crypto industry.
Is Token Issuance + IPO Feasible?
Although this plan is bold and innovative, it faces regulatory challenges.
Under U.S. regulatory context, most tokens could be considered securities by the SEC. If so, companies must comply with registration, disclosure, and anti-fraud rules. If an IPO is pursued in the future, the SEC will review the history of token issuance, structural design, and potential compliance violations.
More complex is the potential "ownership conflict" between equity and tokens: IPO investors worry about dilution of rights (such as voting rights and dividends), while token holders expect value capture, which could be seen as "dual financing" or misleading behavior. Especially during the Gensler era (2022-2024), enforcement tightened, and many projects abandoned IPOs altogether.
In short, token issuance takes the "decentralized/on-chain financing" fast lane, while an IPO takes the "centralized/compliant/equity financing" slow lane. Backpack is trying to drive both vehicles simultaneously, which requires极强的 structural design and regulatory communication skills. Otherwise, it could face delays in listing or regulatory fines.
While there is no complete precedent in the crypto industry, there are partial ones. Coinbase, also a centralized exchange, completed its IPO in 2021, but it had considered issuing a token. Backpack co-founder Can Sun revealed in a podcast two years ago that he participated in Coinbase's上市 work, helping design its token economic model. Although Coinbase ultimately chose a pure equity listing, this experience provided valuable reference for Backpack. At that time, he already planned to realize this unfulfilled ambition at Backpack.
Can It Change the Industry?
Today, the reality of the crypto industry is that many tokens lose over 80% of their value within a year of listing. "Peak at issuance" has almost become a curse. Backpack seems to be寻找 another path: giving tokens the possibility of converting to equity,推动 incentive methods to change.
In the past, the familiar model was "earn tokens with product," where projects first build a good product, and users earn token rewards through usage, such as fee sharing, liquidity mining, airdrops, etc. Token value comes from the product's actual performance. Backpack's approach更像 using token expectations to feed company valuation, i.e., equity binding, IPO narrative, using the expected value of tokens to quickly gather funds, community, and attention, thereby raising the company's valuation and accelerating financing and product iteration. Tokens are no longer just reward tools but valuation engines.
Of course, this transformation is full of uncertainty. How will regulators define it? How to balance rights between equity and tokens? Will the market really buy into the narrative of future shareholders? These questions have no ready answers. But in a pessimistic moment for the crypto industry, Backpack is at least trying to provide a new tension.
Backpack once rebuilt from the ruins; this time, it is building a bridge in the cracks of the system.
