On the evening of November 30th at 20:00, Solana and Odaily jointly held X Space, inviting Armani, founder and CEO of the popular Solana project Backpack, Backpack's legal and compliance officer Can, and Ande, a core contributor to Pyth Network, to discuss the development of the next generation of exchanges and oracles. 
Backpack founder Armani mentioned that now is the stage where the industry as a whole is maturing, learning from past painful experiences, and enabling the industry to move forward. We hope to build a system that is a sustainable financial system. As the blockchain industry becomes an increasingly important part of the global financial industry, Backpack exchange and ecosystem hope to become a core part of this evolution.
Pyth Network core contributor Ande stated that from the perspective of Pyth, our logic for development and innovation is to make data more accurate and reliable, allowing more ecosystem builders to access this data and expand the Pyth ecosystem to a greater extent, enabling everyone to be incentivized to build for the next generation of DeFi.
Here is a recap of the highlights of this AMA:
Part1 Backpack QA
Q1: Can you share some background about yourself and why you started the Backpack project?
Armani / Can: Armani was one of the first developers on the Solana mainnet in 2020, and at that time, there were not many developers in the ecosystem. From a technical perspective, because Solana's software is different from other ecosystems, it was not easy to attract many people at first, so he initially established a set of software to help development teams with programming. Developing on Solana was quite difficult, such as developing contracts, but it became much simpler with his Anchor suite. By 2021, Armani had become a well-known developer, and many people suggested to him to start his own company and create a team, so he started developing new things and began building Backpack. Fortunately, he quickly raised funds and then hired a very good team.
Q2: What inspired you to start the mad lads NFT series, and what sets Mad Lads apart from other NFT series? Why has it become a top NFT in the Solana ecosystem in such a short time?
Armani / Can: After completing the development at the smart contract level, Armani began to consider development at the application level. At that time, NFTs were very popular, but people's understanding of NFTs was mainly limited to PFP. Armani thought, besides PFP images, why couldn't we directly tokenize code and put it on the chain. In this way, anyone with a wallet on Solana could directly use any application, so he created the xNFT standard. Subsequently, mad lads, the first batch of xNFTs, was launched, creating a community, and now it is a very active community on Solana.
Q3: After the successful launch of the Backpack wallet and mad lads, why did you want to start the Backpack exchange? How do the wallet, CEX, and NFT work together?
Armani / Can: If we consider how to bring more people onto the chain, a neutral exchange is a necessary step. A centralized exchange is a channel for all users to participate in the web 3 industry. For example, the traditional financial industry has banks and exchanges, and the blockchain industry also has its own non-custodial wallets and on-chain exchanges. Centralized exchanges bridge the traditional financial industry and the blockchain industry, allowing users who have never used blockchain to enter web 3. So from Armani's perspective, if we want to build the best wallet in the world and bring as many people as possible from traditional finance to the chain, a centralized exchange is a necessary product. Whether it's technology, legal compliance, or community, we have a good team and community to better establish an exchange, which prompted us to establish the exchange.
Q4: User fund security is the most concerning issue for users. How does Backpack ensure the security of user funds? What are the special features of Backpack's underlying architecture that differ from other exchanges? What are the long-term development goals of Backpack?
Ensuring the security of user funds is a multifaceted issue. From a macro perspective, traditional finance has experienced multiple runs and bankruptcies over the past few hundred years. Through decades of trial and error, a financial system that is used worldwide has been developed. A series of painful experiences led to the discovery of methods to regulate and protect users, and to avoid similar incidents. Traditional finance is not yet perfect, but it has been able to reduce risks to a large extent. The digital currency industry is similar to traditional finance. Since Bitcoin's inception in 2009, it has created the entire blockchain industry and brought about some very exciting innovations to the world, including traceability, immutability, and decentralized value transfer and storage. At the same time, it is a new financial product, causing us to encounter many problems that the historical financial industry has faced. Now is the stage where the industry as a whole is maturing, learning from past painful experiences, and enabling the industry to move forward. We want to build a system that is a sustainable financial system. As the blockchain industry becomes an increasingly important part of the global financial industry, Backpack exchange and ecosystem hope to become a core part of this evolution.
Backpack has two main innovations to protect user assets. Many decentralized exchanges do not establish a compliant exchange like centralized exchanges, and many centralized exchanges do not use blockchain technology to ensure asset and privacy security. Blockchain is best at proving user assets and fund transfers, so when we established the Backpack exchange, we wanted to establish a fully compliant exchange and embed blockchain technology to ensure the security and traceability of user assets.
From a technical perspective, there are two main points. First, the construction system of the entire exchange is similar to a decentralized public chain. We have multiple nodes, and user transactions require the agreement of multiple nodes to pass. A hacker or employee cannot personally modify the state machine of the exchange, and cannot change the value of any user or coin individually. Instead, consensus from the entire exchange's nodes is required to make changes. Because we built the exchange using blockchain technology, we inherited many properties of the blockchain. From the first day of the exchange, every transaction, deposit, and withdrawal is stored in the state machine and can be traced and cannot be modified.
Secondly, proof of reserve, which many other exchanges are also doing. We are now working with Otter Security, the most famous technical auditor in the Solana ecosystem. The upcoming proof of reserve system will allow users to verify their Backpack wallet in the proof of reserve at any time. Ultimately, we hope to do this at any time, initially being able to do it every day. We understand that no other exchange can do it every day. So this is our second innovative point. Some users are concerned about privacy in transactions and identities, so all our proof of reserves will use zero-knowledge proofs to ensure that no one except the user can see their transaction history and asset status.
Q5: Backpack is a compliant exchange. Why did you choose to first obtain a compliance license in Dubai? What is the future global compliance path like?
Can: From a compliance perspective, Dubai is a relatively advanced country in the blockchain industry. In addition to Binance having its headquarters there, Bybit, OKX, and Crypto.com have all established regional offices. The Dubai government also highly promotes virtual currencies. In the first half of this year, the UAE government announced its focus on making the UAE a new financial center. From a licensing perspective, Dubai's regulatory authorities have been relatively innovative in regulating digital currencies. Many countries' regulations rigidly apply traditional financial regulatory concepts to virtual currencies. Of course, the lessons learned from traditional finance also need to be followed in the blockchain industry, but there are some aspects that cannot be directly applied. Dubai's regulations ensure that core concepts from traditional finance can be reasonably applied to the blockchain industry, while also avoiding rigid concepts being applied to the blockchain industry. Their regulations re-examine how to regulate the blockchain industry from core principles, such as protecting users and investors, ensuring market integrity, and preventing financial crimes. This is one of the reasons why we chose Dubai.
Regarding our strategy, we have obtained licenses in five countries. We are currently in the beta version, and once we go live, we will be able to serve 74% of the global market. Armani mentioned in Breakpoint's speech that by the end of 2024, we will be able to serve 95% of the global market.
Q6: Last time during the Pyth airdrop and issuance, Backpack received some user complaints, such as slow deposits and withdrawals. What is the core reason for this? Has the team taken measures to improve the user experience?
Armani: After Backpack went live, the user traffic exceeded our expectations. In the first hour of the SOL/USD trading pair going live, we traded approximately 150,000 SOL, and 300,000 SOL was staked. Backpack's trading volume in the first hour exceeded that of all exchanges except Binance. It was much higher than we expected. We also processed over 300,000 withdrawals and deposits, with 170,000 deposits and 140,000 withdrawals. Thanks to our collaboration with Pyth, we attracted many users to experience the Backpack exchange. Third-party service providers, such as chain analysis and other verification service providers, also received a large number of user requests. We have many areas that need improvement, but through this opportunity, we can optimize our infrastructure and front-end to provide a better experience for users next time.
Q7: When will the next major exchange event take place? Will there be a token airdrop?
Armani: Generally, we do not do too much promotion before the event, so please stay tuned for our next event.
PART 2 Pyth Network QA
Ande: Core Contributor to Pyth Network
Q1: Pyth Network is one of the hottest projects in the Solana ecosystem recently and is a leading oracle project. Can you briefly introduce the operational logic of oracles? What are the special features or advantages of Pyth Network compared to Chainlink?
Pyth is currently the largest first-hand oracle network in the market, focusing on continuously releasing financial data in the market. Currently, Pyth's data comes from over 90 first-hand data providers, including the largest batch of exchanges, market makers, financial service providers, as well as funds and high-screen trading institutions, providing Pyth Network with data for various asset types. The data includes not only cryptocurrencies but also stocks, precious metals, and more. On Pyth Network, you can see asset price feed data for over 250 assets, which can be used on over 40 blockchains, with price updates mostly delayed by less than one second. Dapps can integrate price feed data on various blockchains and directly apply it to trade settlement, asset valuation, and user risk management systems. An oracle itself is a facility that connects on-chain data with the off-chain world. Blockchains cannot obtain off-chain data, but the financial scenarios on-chain require this off-chain data. The oracle serves as the intermediary infrastructure to accomplish this, allowing us to have a world of big data, high-frequency trading, and continuously updated data on-chain. Pyth went live on the Solana mainnet in April 2021 and has been in development for over two years in the entire web 3 space, and also expanded to cross-chain last year. In one to two years, Pyth has been able to transmit data from the initial Solana chain to over 40 chains, with over 200 Dapps integrating and using Pyth's data.
There are already some oracles on-chain, so why do we need a new oracle? Obviously, Pyth Network is not the first oracle on-chain. However, Pyth has been conceptualizing this on-chain project since the 2021 DeFi summer, discussing whether on-chain oracles can meet the on-chain data needs. The actual problem is that in the continuous development of DeFi, we found that the gap in on-chain oracles has greatly hindered the development of the blockchain industry. In the world of the first generation of traditional oracles, there are no oracles with ultra-low latency and institutional-grade market data on-chain. This gap mainly affects web 3 developers in three aspects:
1) Speed: For many on-chain products, the speed of oracles is not fast enough. If you want to settle a perps order, and the price provided by your order has a delay of three to four seconds or even longer, traditional oracles can only update price feed data every 10 minutes or 50 minutes, which is unacceptable for on-chain high-frequency trading execution. In such a long delay, price fluctuations become very large. The setup of traditional oracles cannot meet the increasingly innovative DeFi financial scenarios.
2) Asset coverage and availability, and whether assets can be listed on multiple chains simultaneously: Traditional oracles may have 200 to 300 price feed data on Ethereum, but if they want to cross to new chains, such as Solana and Optimism, they must redeploy to deploy new ecosystems or new blockchains. This will bring about very large future scalability and price feed listing issues. In other words, in the future, 100 to 200 ecosystems will require 100 to 200 sets of operations and maintenance processes to simultaneously list cross-chain data in different ecosystems. With more and more price feeds, the operating costs of oracles will become higher, further limiting scalability. Traditional oracles cannot adapt to the narrative of mass adoption. In the trend of future mass adoption, oracles cannot meet the demand.
3) It is a problem of data sources and data quality. Obtaining data from third-party or unverifiable data sources. For high-frequency trading and the new generation of innovative DeFi, we need data that is not only fast but also accurate and precise. A change of three to four decimal places can affect the resolution and profitability of high-frequency trading. We must ensure the quality of data sources and data. The way third-party data sources report data cannot guarantee data quality.
For Pyth, we hope to update oracle services from these three perspectives to meet the construction of the next generation of DeFi.
Q2: Pyth Network has designed a cross-chain data transmission model for these three issues. At the same time, we have designed our own app chain. Based on Solana's technology, we have specifically forked a Solana virtual machine dedicated to integrating and publishing Pyth price feed data. Relying on Solana's highest-frequency data update speed, we have a complete set of technology. This chain is dedicated to data processing and is not affected by external factors. On this dedicated app chain, we receive data from all publishers and perform algorithmic data processing. After completing the data processing, Pyth will deploy a price server on various ecosystem blockchains. The price servers on various chains will provide data updates based on demand. If there are DeFi applications on the entire chain that want to obtain Pyth data, they will request data updates from the price server, which will then directly publish the data from Pyth to the corresponding ecosystem blockchain applications. This approach has several significant advantages. In terms of speed, because we have Solana's speed, each price feed update can be achieved in 400 milliseconds. Data on Pythnet can be updated two to three times within one second. Secondly, because our data uses an on-demand data fetching model, Pyth can update data on Pythnet in 400 milliseconds. In various ecosystems, once you need to use this data, you can directly fetch the data from Pythnet using the fetch command. This ensures fast and accurate data and ensures that there are no limitations on scalability due to price feeds being only available on a specific ecosystem and not on a new ecosystem. The third aspect is data reliability. Pyth only allows data owners, the first-hand data providers, to publish data to the network, which to some extent ensures the reliability and quality of the data. These first-hand data owners are almost all very large financial institutions in the financial market, and the data they have comes from their daily work or part of their daily trading execution, which ensures the reliability and accuracy of the data. In addition, there are some security measures, including permissionless verification methods and mechanisms for onboarding new data publishers, to ensure data quality and reliability, while also ensuring speed and scalability.
Q3: After the token issuance, what are the subsequent plans for Pyth Network? What will be the focus on the market and technology?
After listing, there have been no adjustments to our subsequent technical plans, and technical development is proceeding as usual. For Pyth, our development and innovation logic revolves around a few things: making data more accurate and reliable, enabling more ecosystem builders to access this data, expanding the user base of the Pyth ecosystem to a greater extent, and incentivizing everyone to contribute to the development of the next generation of DeFi. All our development revolves around this process. In the future, we can expect to see more price feed data being listed on Pyth, including not only cryptocurrency data but also forex, commodities, and stock data. We can envision more DeFi financial use cases emerging on-chain in the future. Secondly, Pyth will also introduce more products. Oracles are not limited to finance and can contribute to the ecosystem in other ways, including providing better risk management tools. Some ecosystems not only need financial data but also require weather, random numbers, and many other types of data. We are continuously building in terms of both product and network reliability.
Q4: Why did you choose to collaborate with Backpack and distribute the airdrop to users through Backpack during the initial launch?
Our core business started with Solana. The entire Solana ecosystem has a very cooperative community atmosphere, not only among developers but also among protocols and teams. Everyone is not only partners in work but also has exchanges in many different areas, envisions the next steps in technology, and supports each other's technological development and market construction. The collaboration between Backpack and Pyth is a natural development. Backpack exchange is about to be launched, and Pyth listing is also developing at the same time. We are leveraging each other's strengths. This is a win-win situation for everyone.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
