The founders of Backpack, known for developing a cutting-edge crypto exchange and wallet, have witnessed impressive growth since their launch in 2022. However, the journey has been far from smooth.
In September 2022, FTX co-led a $20 million strategic investment round for Backpack. Just two months later, in November 2022, FTX faced a collapse.
“We lost 80% of the operating capital on FTX. We spent all this time building this protocol and it was like an on-the-ground knock-out and [we] needed to be resuscitated back to life,” shared Armani Ferrante, the co-founder of Backpack and the NFT collection Mad Lads, with TechCrunch.
Backpack persevered through the challenging times, largely due to the support of their community. This resilience was fueled by a mix of a strong product, engaged community, social goodwill, and good timing that attracted a dedicated group of individuals. “Since then it’s taken on a life of its own,” Ferrante remarked.
Recently, Backpack concluded its “Pre Season Phase 1,” marking the end of the exchange’s beta phase. During this period, the platform traded over $27.5 billion in total volume and filled 259 million orders at a rate of about 5,000 per minute, as reported in the company’s posts on X. Moreover, it onboarded 252,000 KYC’d users, bringing its total user base to 560,000.
With a trading volume peak of $3.66 billion on Sunday and a 24-hour volume around $2.8 billion, Backpack’s exchange is making significant strides in the crypto market, according to CoinGecko data.
Image Credits: CoinGecko (opens in a new window)
“We have caught lightning in a bottle in a weird way, where people just started talking about Backpack as this new up-and-coming exchange and seeing the promises of a next generation exchange that can learn from a lot of the lessons and mistakes that were made of previous exchanges,” Ferrante expressed.
Reflecting on the lessons learned from FTX, Ferrante highlighted that one of Backpack’s essential design objectives was to address the vulnerabilities revealed by FTX. By decentralizing the control of balances through independent nodes that validate each other, Backpack aims to minimize the risk of a single point of failure and distribute the exchange’s operations across multiple entities. “The industry has been forced to mature, for better,” Ferrante added.
Despite the setback from FTX’s collapse, Ferrante views it as an opportunity to tackle challenging issues and elevate their product offerings. Beyond the exchange, Backpack is expanding into developing a crypto wallet and platform for xNFTs, a new token standard on the Solana blockchain that integrates NFT features with a platform for web3 applications.
Mad Lads, a notable Solana NFT collection by Backpack, serves as an xNFT with a trading floor price of approximately 172 SOL, or $34,400. This innovative approach aligns with Backpack’s vision of enriching the crypto experience for its community.
Exploring the realm of xNFTs further, Ferrante pointed out examples like Solana Monkey Business, which offers an xNFT with a newsletter called the Banana Split, providing exclusive updates accessible directly in the user’s wallet on Backpack.
Securing a successful replacement for FTX as an investor, Backpack recently raised $17 million in a Series A round led by Placeholder VC, valuing the company at $120 million. With expansion plans in the UK, 11 US states, Dubai, and the Asia-Pacific region, Backpack is gearing up to serve a global audience and aims to reach 95% of the world’s GDP by the end of 2024.
As Backpack focuses on execution and global outreach, the goal remains to establish a strong presence in every country worldwide. “It’s one of those crazy things where it’s a winner take all market,” Ferrante remarked. “We want to seize the moment and given everything we talked about, that opportunity exists this year so we’re making the most out of everything.”
