Key Takeaways
- Users staking Backpack’s token for a minimum of one year gain the ability to convert holdings into company shares
- The platform has allocated one-fifth of its total equity specifically for token holders
- Community members receive 62.5% of token distribution upfront, while team and investor allocations unlock post-IPO
- Backpack is currently negotiating a funding round worth $50 million with a pre-money valuation reaching $1 billion
- Founder Armani Ferrante, who previously worked at Alameda Research, aims to address industry issues with “false promises” from token distributions
Backpack Exchange, a cryptocurrency trading platform, has revealed plans allowing users to convert staked tokens into actual company equity following a one-year minimum holding period.
Founder and CEO Armani Ferrante shared the details via X on Monday, confirming that one-fifth of the company’s existing equity has been reserved specifically for this initiative.
This strategic decision arrives as the exchange prepares for a prospective initial public offering in the United States. The timing of the Token Generation Event (TGE) remains unannounced.
At launch, Backpack intends to distribute 25% from a total supply capped at one million tokens. These initial tokens will be distributed to participants from a points-based rewards campaign and holders of Mad Lads NFTs.
The points system rewarded users based on trading volume and participation in seasonal initiatives across the platform. According to company statements, no private token sales have occurred.
An additional 37.5% of the token supply remains in Backpack’s corporate treasury, specifically earmarked for potential IPO-related activities. The final portion will become available exclusively after the public listing, designated for employees and early investors.
This approach reverses what Ferrante characterized as a fundamentally flawed industry practice where early participants and insiders secure substantial allocations while retail investors face inevitable selling pressure.
“I’m just tired of false promises,” Ferrante posted on X. He highlighted how previous token launches frequently promised utility features that ultimately failed to materialize.
Token-to-Equity Conversion Mechanics
Participants must commit to staking Backpack’s token for no less than 12 months to become eligible. Following this lockup period, they gain the option to convert their staked holdings into company shares at a predetermined conversion rate.
Ferrante recognized that this framework begins with considerable centralization. However, he emphasized ongoing plans to gradually shift toward decentralization as the platform matures.
Backpack launched in 2022. Prior to founding the company, Ferrante was employed at Alameda Research, the quantitative trading firm connected to FTX, both of which imploded in November 2022.
Capital Raising and Market Growth
The exchange is presently negotiating a $50 million capital raise at a $1 billion pre-money valuation, per reporting from Axios published earlier this month. Achieving this valuation would officially designate Backpack as a unicorn company.
Backpack currently functions under established regulatory structures throughout the Middle East and European markets. The platform has launched services across more than a dozen American states and continues pursuing nationwide availability.
Last October, the exchange formed a partnership with Superstate, an SEC-registered transfer agent, to facilitate onchain tokenized equities trading.
Last week, the platform requested users complete identity verification procedures to establish token claim eligibility.
Backpack’s equity-linked token strategy emerges during a period when cryptocurrency businesses are experiencing improved regulatory conditions in the United States, following leadership transitions at the Securities and Exchange Commission.
