Surviving the most difficult times, Backpack is seeking a new direction - the exchange.

Written by: Deep Tide TechFlow

The bull market is filled with excitement, and the FTX and Solana ecosystems are once again attracting public attention.

Recently, according to a report by The Wall Street Journal, some former high-level executives of FTX, including former general counsel Can Sun, are joining forces to create a new cryptocurrency exchange called Backpack Exchange, which plans to use new technology to protect user funds.

With the resurgence of the Solana ecosystem, rumors have it that Backpack Exchange is about to launch a staking and new token offering activity, attracting a lot of attention from the community. Some big players have expressed their interest, with one stating that they already hold hundreds of KYC accounts and are ready to take action. What kind of trading platform is this?

The Past and Present of Backpack Exchange

In May of this year, Deep Tide TechFlow wrote an article "xNFT: The Weapon Behind the Mad Lads Craze, NFTs That Can Run Code", which briefly explains that xNFT is a decentralized application that can run within an NFT, rather than being a static image or video. The development team behind it is the Solana ecosystem wallet Backpack.

In September 2022, the development company Coral behind Backpack announced that it had completed a $20 million financing round, led by FTX Ventures and Jump Crypto, with participation from Multicoin Capital, Anagram, K5 Global, and other strategic investors.

Both FTX Ventures and Jump Crypto are among the most orthodox crypto VCs in the Solana ecosystem.

However, the good times did not last long. FTX collapsed, and the entire Solana ecosystem fell into a period of silence, and even more tragically, most of Backpack's funds were trapped in FTX.

Backpack founder Armani Ferrante stated on The Scoop podcast that the company was unable to withdraw its funds from FTX, amounting to approximately $14.5 million.

In a crisis, the company had to "enter cockroach mode," cutting expenses to maintain operations, and the Backpack team managed to survive.

In April of this year, Backpack released the first xNFT series Mad Lads on Solana, which was a great success. At one point, the total trading volume ranked first on the entire network, even surpassing established Ethereum blue-chip NFTs like BAYC.

Surviving the most difficult times, Backpack is seeking a new direction - the exchange.

In October 2023, Backpack announced that it will launch a "regulated" trading platform called Backpack Exchange and has obtained a VASP license from the Dubai Virtual Asset Regulatory Authority. Testing is set to begin in November, with plans to launch to the public in the first quarter of 2024.

Former FTX Employees' Collective Entrepreneurship

The launch of Backpack Exchange also involves former FTX general counsel Can Sun. Armani Ferrante and Can Sun have jointly established a new company, Trek Labs, to operate the exchange in Dubai. The company plans to sell 10% of its shares to investors at a valuation of over $100 million.

Ferrante's wife, Claire Zhang, is also Sun's former legal assistant and a member of the executive board of Trek Labs.

Can Sun, the former general counsel of FTX and a key witness in the criminal trial that led to action against SBF, told the jury that he "never approved" FTX lending customer funds to Alameda Research.

According to Coindesk, Backpack founder Ferrante was previously a software development engineer at Alameda Research, and Backpack's other co-founder, Tristan Yver, had worked at FTX for over 2 years.

Sun also stated that he and Ferrante have hired other former FTX legal and compliance staff to join the exchange.

Therefore, Backpack can be described as a collective re-employment of former FTX employees.

Ferrante stated that the decision to start his own exchange was inspired by the colossal disaster caused by FTX's collapse.

In a statement, he said, "It's time to end the era of opaque cryptocurrency exchanges, which represent everything our industry opposes. Using exchanges with single points of failure, no reserve proof, or no auditability should not be the norm."

Therefore, the main feature of the Backpack exchange is security and transparency.

The platform integrates multi-party computation (MPC) technology to ensure fund security and allows users to self-custody their funds, meaning that no one can access their crypto wallets except the users themselves.

Influenced by the Backpack exchange, the previously released NFT series Mad Lads has surged by 460% in the past 30 days, with a current floor price of 96 SOL.

On November 18, the exchange is expected to launch its first token offering activity, with rumors in the Twitter community suggesting that it will involve staking SOL (around 5) to receive an airdrop.

This rumor has also attracted a large number of airdrop hunters to participate. According to community participants, the price for individual KYC information skyrocketed from $3 to $15 overnight due to the requirement for KYC verification.