BackPack Token for Equity, Cruel Self Help in the Crypto Winter Author: David, Deep Tide TechFlow Cryptocurrency Market Enters Winter, BTC High Point Halts. Beyond the price of the currency, another set of data is not much better: the cryptocurrency companies that went public in a cluster in 2025 have also been almost completely wiped out. Gemini fell nearly 80% from its issue price, Bullish fell over 52%, eToro fell 58%, and Circle fell 11%. Kraken's application has been submitted, valued at $15 to $20 billion, and is waiting in line to go public. These cryptocurrency exchange companies have chosen the traditional path: to generate large profits, then go public and let the public market price themselves, but the answer given by the public market is cruel. Meanwhile, the other path is not much better either. BNB and Binance have no legal equity relationship, FTT is directly reset to zero, and Coinbase does not issue coins, but there is no bridge between equity and cryptocurrency users. There is currently no satisfactory value anchoring solution for the category of exchange tokens. Last week, the Backpack exchange provided a new answer: tokens pledged for one year can be exchanged for 20% of the company's equity at a fixed ratio. This is also the first time in the encryption industry to do so. What is the exchange token in your hand anchored to? Is it a coupon that shrinks with transaction volume, or is it a part of the company's value? After the collective collapse of cryptocurrency IPOs in 2025, this issue has become even more urgent than before. The token empowerment plan announced by the Contemporary Coin to Equity Backpack Exchange on February 23 can be explained in one sentence: users can pledge tokens for at least one year and exchange them for company equity at a fixed ratio. Currently, the reserved equity pool accounts for 20% of the company's equity. CEO Armani Ferrante explained the reason for doing so on X: "The utility of the vast majority of tokens is a promise, unless a protocol is decentralized enough that the team can run around the Bahamas drinking coconut juice as usual, otherwise the so-called token value is just empty talk. This statement is harsh, but not exaggerated. The value of most exchange tokens depends on the continuous operation of the team, but the holders do not receive any ownership. The choice of Backpack is to pierce through this layer of window paper and directly give equity. This plan relies on the platform token that Backpack will soon issue. However, the official name of this token has not been announced yet, and the TGE time has not been confirmed. Ferrante hinted in the community that the earliest is the end of March. But the framework of the token economy has already been laid out. A total of 1 billion pieces. On the first day, unlock 25%, approximately 250 million coins, all of which will be distributed to point users and Mad Lads NFT holders. This proportion is higher than the industry's common range of 7% to 15%. The statement of Backpack is to allow early users to freely choose to sell, rather than being kidnapped by lock ups. The remaining 75% is split in half. 37.5% belongs to users, gradually released according to milestones such as product launch and regulatory approval. Another 37.5% will be deposited into the company's treasury and locked up for an additional year after the completion of the US IPO. The team does not have direct token distribution, they hold company equity, which can only be realized after the IPO. This design has an additional significance in a bear market. Pure utility tokens increase in trading volume during bull markets and decrease in trading volume during bear markets. The repurchase strength of BNB depends on Binance's profit, which in turn depends on trading volume and market conditions. The chain is long, and each link will be discounted in a bear market. Equity binding attempts to sever this chain. If the token can be exchanged for company equity, its value anchor is not only platform trading volume, but also the valuation of the company itself. According to Axios, Backpack is currently in talks for a new round of financing at a pre investment valuation of $1 billion. The theoretical value corresponding to a 20% equity pool is $200 million. Of course, this 200 million is a paper figure. The exchange rate has not been announced, legal documents have not been released, and there is no timetable for IPO. But at least in terms of design intent, Backpack provides the token with a value anchor that does not completely fluctuate with the coin price. This also explains why this plan was announced during a bear market. In a bull market, tokens can support prices based on trading volume and sentiment, and no one cares about what they anchor. In a bear market, it is only necessary to answer the question 'What is the value of this thing in my hand when the price of the coin has fallen'. What does it mean for holders to exchange tokens for equity, and what exactly do they get in exchange for? As of press time, Backpack has announced its direction but has not disclosed any details. Is it direct shareholding, options, or some form of equity certificate? Do holders have voting rights, dividend rights, and information disclosure rights? Backpack said it will be announced gradually in the coming weeks, but now there is only one thing you can be sure of. That's a one-year token pledge. The encryption industry has seen too many designs of "getting on the bus first and then paying for tickets", and the final ticket size often differs from the promise made when getting on the bus. Before the details are released, a 20% equity pool is an intention, not a contract. Assuming the detailed rules are ultimately reasonable, the next issue faced by the pledger is liquidity. You lock up a token that can be sold on the exchange for one year and exchange it for equity in an unlisted company. This is switching from high liquidity assets to low liquidity assets. Private equity, unlike tokens, does not have a 24-hour trading market. There are only two ways to monetize your equity: wait for an IPO or find an off exchange buyer. And IPO is the core premise of the entire design. The performance of cryptocurrency companies after going public in 2025, as mentioned earlier, indicates that IPO does not equate to realizing valuation. The valuation of 1 billion yuan given by the primary market and the final pricing in the public market can vary greatly, and the value of the equity held by the pledger depends on the latter rather than the former. What if the IPO is postponed or even not happening? The team's tokens do continue to be locked, but your equity has not exited the channel either. Ferrante has also admitted that going public may be fast, far away, or even impossible. So for holders, the real multiple-choice question is this: not pledging, holding the token, enduring price fluctuations but retaining liquidity. Liquidity itself is the rarest thing in a bear market. Pledge for one year, give up liquidity, bet on: reasonable exchange terms, successful listing of the company, and no discount on valuation after listing. If one of the three conditions is missing, the expected return on this transaction will significantly decrease. If Backpack really achieves an IPO and its valuation stands firm, early stakers may receive the first batch of real company equity obtained through tokens in the industry. Valuation reset in bear markets Every bear market in the cryptocurrency market will force some real problems. The bear market in 2018 burst the ICO foam, and most of the utility tokens returned to zero. The industry began to reflect on "whether tokens are needed or not". After the collapse of FTX in 2022, the focus of reflection has shifted to transparency and proof of reserves. The question for this round is more direct: when the coin price drops from its peak and trading volume shrinks, where is the value anchor of the exchange token? No one paid attention to this issue during the bull market. In a bear market, trading volume shrinks, and the value of tokens is completely tied to the short-term operating conditions of the platform, with weak ability to cross cycles. The equity binding model of Backpack, regardless of whether it can ultimately be implemented or not, is at least attempting to address this issue and find a value support for the token that does not completely fluctuate with trading volume. But this response itself is also embedded in another layer of dilemma: the valuations of exchanges are undergoing a collective reset. Before 2025, the valuation logic of cryptocurrency exchanges will mainly rely on multiplying trading volume by multiples. In a bull market, trading volume increases and valuations expand accordingly. But the public market is increasingly not buying into this set. The collective drop in stock prices of several listed exchange companies is essentially the public market saying: your income is unsustainable, and I am unwilling to price at peak. This means that whether it is tokens or equity, anchoring exchange valuations inherently carries cyclical risks. Backpack links tokens with equity, solving the identity problem of "what exactly do tokens represent", but does not address the pricing problem of "how much is the exchange worth". The latter depends on whether Backpack can differentiate its revenue structure, rather than solely relying on transaction fees. From a broader perspective, most cryptocurrency projects are undergoing a generational shift in token economics design. At least in a bear market, the industry is forced to ponder a long overdue question, which is where the value of tokens should come from. In the past few years, the business model of the exchange may have been somewhat arrogant, exchanging future equity for today's lifeline: building a field, issuing a platform coin, earning transaction fees from the liquidity overflowing from the bull market, and symbolically repurchasing and destroying a small portion of profits. Users holding tokens are essentially paying for the prosperity of the platform. But the encryption winter has completely shattered this logic. When retail investors exit, trading volume shrinks, and the "ultimate exit path" of IPO is mercilessly rejected by the public market, exchanges find themselves facing a cruel self rescue. At this stage of the stock game, who can lock in the user's final funds and who can survive until the next cycle. When the elusive "token empowerment" (such as discounted transaction fees and new tickets) completely fails, in order to make users willingly leave their money on the platform in the continuous downturn, the exchange must come up with truly bone breaking chips, which are the company's most core assets: equity. This is a defensive battle where players trade their cards for survival time. In this year, as long as users' coins are still locked in the Backpack pool, the platform's TVL has a guaranteed bottom line, business data will not be too bad, and the $1 billion valuation story can continue to be told. You can't call this generosity, it's more like an extremely pragmatic self rescue strategy: using an equity option on an unlisted company to exchange for the most valuable asset to survive the bear market winter, a stable and non outflowing capital base. The exchange of Backpack tokens for equity aims to become a turning point in the design of exchange tokens, rather than another unfulfilled narrative in a bear market.