Backpack Raises $17 Million in Funding Round Led by Placeholder VC

Armani Ferrante and Tristan Yver's startup secured $120 million in funding at a valuation of $120 million.

Solana veterans secure $17 million for ‘Backpack’ crypto wallet and exchange.

Longtime Solana contributor Armani Ferrante’s crypto wallet and exchange company, Backpack, has successfully raised $17 million in a funding round led by Placeholder VC. This Series A raise has attributed to the company’s valuation of $120 million, marking its strength and growth since enduring a setback less than two years ago when its key previous backer, FTX, collapsed. The funding injection will cover compliance and licensing costs as Backpack aims to expand into more jurisdictions.

From Collapse to Resilience: Backpack’s Journey

Less than two years ago, when FTX, the renowned digital asset exchange, imploded and significantly impacted the startup’s funding, Backpack found itself in a challenging position. However, the company quickly adapted, adopting a “cockroach mode” approach, and managed to secure a clever NFT-fueled fundraising initiative to strengthen its position in the market.

Armani Ferrante and Tristan Yver, both alumni of FTX/Alameda who left before the collapse, joined forces with Can Sun, the former top lawyer of FTX, to address the gap left by the exchange’s demise. Their goal was to build an exchange that would serve as a robust onboarding point for individuals entering the world of cryptocurrency.

According to Yver, exchanges play a pivotal role in introducing people to crypto, with Coinbase at the forefront of bringing in more users than any other platform. Determined to make a significant impact, Yver and Ferrante launched their exchange product just a few weeks ago. The platform has already achieved impressive trading volumes in the hundreds of millions of dollars with users from Asia, the Middle East, and the United States.

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Adding Blockchain Transparency to Exchanges

Behind the scenes, Backpack incorporates elements of blockchain technology in its operations. Similar to distributed databases that house cryptocurrency transaction histories, Backpack uses a system that functions similarly to a permissioned blockchain. This approach ensures that every transfer and trade is recorded, maintaining transparency and mitigating the risk of fraudulent practices.

This commitment to transparency is especially crucial given recent incidents involving FTX and its customers’ deposits mysteriously disappearing. By adopting a system that regulators can easily monitor, Backpack demonstrates a cooperative approach and a willingness to work within regulatory boundaries.

The Power of Community and NFTs

Before securing venture funding, Backpack had to operate on a tight financial leash, having raised only $1.4 million through the sale of the popular Mad Lads NFT in April. This event not only popularized Backpack’s wallet app but also introduced the concept of specialty NFTs called xNFTs that can run code inside them.

Furthermore, the Mad Lads NFT sale created a community of on-chain traders and collectors who became active users of Backpack’s exchange. This ready-made user base has contributed to the platform’s impressive daily trading volumes, sometimes reaching billions of dollars, despite its relative newness in the market.

However, it’s not all smooth sailing. Backpack has implemented a ranking system for traders based on their trading volume on the exchange. This has sparked speculation among power traders that higher-ranked users will receive more significant token drops from Backpack’s partner projects. Yver, however, dispels these rumors and asserts that his team has even cautioned some traders against accumulating unnecessary trading fees.

Q&A Section

Now that we’ve explored Backpack’s recent funding round and its journey thus far, let’s delve into some common questions and concerns readers might have.

1. Is Backpack available to users worldwide?

Backpack is expanding its operations and aiming to enter more jurisdictions; however, the availability of the platform may vary depending on the regulations in each country. As the company continues to grow and secure the necessary compliance and licensing, we can expect to see its accessibility expanding globally.

2. What are the benefits of using a wallet app like Backpack’s?

Wallet apps like Backpack offer users a secure and convenient way to store their cryptocurrencies. They provide easy access to digital assets, enable seamless transactions, and often integrate additional features like NFT support, staking, and yield farming. Backpack’s wallet app, in particular, allows users to access specialty NFTs called xNFTs, which adds an extra layer of functionality and excitement to the experience.

3. How does Backpack ensure the safety of customer funds on its exchange?

Backpack prioritizes the security of customer funds and implements robust measures to safeguard them. By utilizing a blockchain-inspired system, every transfer and trade is recorded, preventing manipulation and ensuring transparency. Additionally, the company takes proactive steps to comply with regulatory requirements, promoting a safe and reliable trading environment for its users.

The Future of Backpack and Crypto Exchanges

As Backpack continues to secure funding and expand its reach, its future looks promising. The company’s commitment to transparency, user-friendly features, and partnerships with top-tier projects positions it for further growth and success. With the cryptocurrency market gaining more mainstream attention and adoption, Backpack’s focus on providing a seamless onboarding experience for newcomers could prove to be a winning strategy.

Backpack’s partnerships and collaborations with industry experts and key figures demonstrate its determination to establish itself as a leading exchange platform. By leveraging the power of the community and tapping into the increasing popularity of NFTs, Backpack has created a strong foundation for sustained success.

In conclusion, Backpack’s recent fundraising success, innovative approach to compliance, and dedication to building a vibrant community make it a key player to watch in the ever-evolving crypto landscape.

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References

1. Crypto VC Deals in 2023 Plunged 70%
2. Swiss Crypto Bank Sygnum Inches Closer to Unicorn Status with $40M Raise

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