Key Takeaways
- Users staking Backpack’s native token for one year or longer can convert holdings into company equity
- One-fifth of the exchange’s total equity has been allocated for token holder conversion
- Users receive 62.5% of total token supply initially, while team and investor allocations unlock post-IPO
- Backpack is negotiating a $50 million fundraising round at $1 billion pre-money valuation
- Former Alameda Research developer Armani Ferrante leads the initiative to avoid traditional token launch pitfalls
Digital asset trading venue Backpack Exchange has revealed a groundbreaking initiative allowing users to convert staked tokens into direct company ownership.
Chief Executive Armani Ferrante disclosed the details via X on Monday, confirming that one-fifth of the firm’s existing equity structure has been reserved exclusively for this conversion program.
The announcement arrives as Backpack positions itself for a prospective initial public offering in the United States. The platform has yet to finalize timing for its Token Generation Event (TGE).
Backpack intends to distribute 25% of its one million token total supply during the initial launch phase. These tokens will be allocated to participants in the platform’s points initiative and Mad Lads NFT holders.
The points system rewarded users based on trading volumes and engagement with seasonal platform activities. The company emphasizes that no direct token sales have occurred to date.
An additional 37.5% of the token allocation is designated for Backpack’s corporate treasury and contingent on IPO execution. Remaining tokens will become available to team members and early investors following the public listing.
This distribution framework reverses traditional tokenomics models that Ferrante criticized for favoring insiders with substantial early allocations while creating predictable downward price pressure on everyday investors.
“I’m just tired of false promises,” Ferrante posted on X, citing numerous historical token launches that marketed utility features that never came to fruition.
Mechanics of the Token-to-Equity Exchange
Participants must commit to staking Backpack’s token for no less than 12 months to become eligible. Following this lock-up period, they can convert their staked position into company shares at a predetermined conversion rate.
Ferrante conceded the initial framework maintains considerable centralization. However, he outlined a roadmap for gradual decentralization aligned with product maturation.
Backpack launched operations in 2022. Prior to founding the exchange, Ferrante was employed at Alameda Research, the quantitative trading operation connected to FTX, both of which imploded in November 2022.
Capital Raising and Market Penetration
The exchange is actively negotiating a $50 million capital injection at a $1 billion pre-money company value, per reporting from Axios published earlier this month. Successful completion would establish Backpack as a unicorn-status startup.
Backpack currently maintains operations under regulatory supervision across Middle Eastern and European jurisdictions. The platform serves customers in over a dozen American states, with nationwide expansion on the strategic roadmap.
Last October, Backpack formed a strategic alliance with Superstate, an SEC-registered transfer agent, to facilitate onchain tokenized equity products.
The platform requested users complete identity verification procedures last week to assess eligibility for token distribution.
Backpack’s equity-linked token structure emerges during a period of improved regulatory sentiment for cryptocurrency businesses in the United States, following leadership transitions at the Securities and Exchange Commission.
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