Original Author: Rubywang.eth (X: @rubywxt1)
During last week's SolanaBreakpoint, I had the privilege of conducting an exclusive 40-minute interview with the founder of Backpack, @armaniferrante, at the venue. Several questions were quite direct, such as competition with CEX and DEX. Armani's initial response was "GreatQuestion, Iloveit," and he candidly shared his thoughts on competition, product, and user growth, which was very inspiring.
Here is the full interview (I asked a total of 7 questions):
1. About SuperApp: Backpack started as a web3 wallet and has now integrated the exchange experience into the wallet. Most centralized exchanges such as Binance, OKX, Bybit, etc., are also adding web3 wallets to their CEXApps. Ultimately, everyone wants to create a SuperApp. How do you provide unique services and product experiences? What is your view on this comparison?
I think what you mentioned earlier about most products or teams considering the encrypted world and centralized exchanges as two separate things. If we look at the design, there is a similar place where the tab above is like a "Paralleluniverse."
For us, we hope that these two things are integrated, and I believe that this will be the trend in the future.
The user experience should be that when I log into my exchange account, enter my email, password, two-step verification (2FA), I can not only see my trading portfolio but also directly access all of my wallets. In our application, the boundary between on-chain and off-chain experiences is gradually blurring, and we hope to create an unprecedented seamless experience for users.
*Ruby Note: Just tried the upgraded CEX experience on the Backpack mobile app this week, and it's quite special. Logging into CEX from the wallet, the boundary between decentralized applications and centralized trading platforms is very blurred. The updated app interface:
Follow-up: Can you introduce the current internal team division and personnel situation of Backpack's products?
Backpack's three products include a browser plugin, WebApp, and a mobile app. The browser plugin only has wallet functionality, the WebApp only has exchange functionality, and the mobile app is an application that integrates wallet and exchange. The development team for each product currently does not exceed 10 people, a very lean team. Our internal culture is engineer-oriented, and everyone has a strong sense of ownership, deeply cares about the product, and everyone is concerned about the overall product. Therefore, we can act quickly and think about all Backpack products in a unified and harmonious way, which is our core competitiveness.
*Ruby Note: @Web3Brand previously wrote about Telegram, which is also a very efficient small team operation: 1 billion monthly active users, with only 30 developers, and the only product manager is the founder Durov himself. https://x.com/starzqeth/status/1818075092481622443…
2. How do you view the competition with decentralized exchanges (DEX): From the perspective of a user like me, some DEXs have upgraded their mobile product experience and also provide fiat currency deposits and withdrawals, making the DEX experience on-chain close to that of CEX, especially in low gas environments such as Solana or some Ethereum L2. How do you view this trend and its potential erosion of CEX market share?
Wow, that's a great question, I really like it!
First of all, a concise answer to you is: I like this trend, and I think it is also beneficial to us.
Fundamentally, if the on-chain economy does not grow, centralized exchanges and wallets have no reason to exist.
The success of DEX is closely related to our success, and I firmly believe in this. What we want to solve is not competition with DEX but to strive to provide users with an entry point in the wallet while addressing some of the challenges in the traditional financial world, such as legal and compliance issues, which are very important components of centralized exchanges.
I believe that finance itself has no intrinsic value; it is useless in a vacuum. Finance, decentralized finance (DeFi), and other related fields only make sense when there are real-world goods and services. Therefore, finance cannot be separated from the development of the real industry. If you want to operate and develop in the real world, you must follow rules and laws. We hope to collectively improve the traditional financial system, including stocks, bonds, etc., not just create some memecoins. We are trying to fill the gap between them, not only providing excellent products and exchanges but also hoping to provide users with the best solution that can integrate native cryptographic products to better manage personal finances.
For the younger generation, what is the reason for using the previous generation's financial applications?
"When was the last time you felt excited when using a banking app?" The mainstream financial sector does not attract consumers' experiences like Instagram or TikTok.
Compared to many DEXs, we play a different role. Our goal is to bring these assets onto the chain, making DEX more valuable. This is a long-term goal and vision that is crucial to the growth of the entire crypto economy.
I have a good relationship with the founders of these projects, and I also strongly support the development of DEX. As the saying goes, "A rising tide raises all boats," I am focused on expanding the market together. I hope people can use these decentralized applications in the Backpack wallet. If more people use decentralized applications, we will also grow with them.
3. About growth strategy: It's great to see Backpack moving closer to the goal of a SuperApp. Can you share some strategies for user growth currently being implemented?
Our growth ultimately depends on creating the best product we can.
What I think about more is how to turn Backpack into the best application for managing all personal finances, where everyone can manage their assets in a secure, easy, and good user experience.
So our first important strategy is "product priority," removing all barriers to user experience.
Unlike some other applications, we have not designed the exchange and wallet as parallel or separate applications. For example, Coinbase has separate exchange and wallet applications, and some trading platforms do not even develop Web3 wallets. Our idea is to harmoniously integrate these experiences to eliminate all usage barriers, not to separate the crypto economy from the mainstream economy but to integrate them.
I firmly believe that, just as "software is eating the world," "cryptographic technology will ultimately dominate the financial field."
This is why we integrate all functions into one application. I believe that this integration is an important problem that urgently needs to be solved and is the direction we focus on. Through this integration, we aim to provide users with a seamlessly connected financial ecosystem, blurring the boundaries between traditional finance and crypto finance, and ultimately achieving the perfect integration of the two.
Another factor that continues to be important to us is that we have caught the wave of Solana's revival, witnessing its price rise from $8 to $200 and now.
From the feedback of many of our users, they come to Backpack to discover Alpha on SOL and trade these tokens; Solana is very important to us. I think that so far, many exchanges still do not pay enough attention to Solana. I have been involved in the Solana ecosystem (development and entrepreneurship) since 2020 and have attended Breakpoint for 4 years. Many of the projects listed and airdropped by BP, such as Pyth, Wormhole, Tensor, Parcel, Drift, Kamino, and others, are the most important projects for Solana. We have been very close friends with these excellent projects from the beginning. Therefore, we hope to continue to support and make a small contribution to the entire Solana ecosystem, providing an entry point for users and traffic, and becoming a gateway for many people to understand these projects in the Solana ecosystem.
We also have a very enthusiastic community in the Chinese-speaking region.
For Backpack and Madlads, we have various activities in Asia, including Japan, Hong Kong, Mainland China, Taiwan, Singapore, South Korea, and others. Chinese-speaking community members also fly to major cities to attend and organize gatherings, injecting vibrant vitality into the entire Backpack community. This is an important part of our brand and growth.
4. Compliance and Licensing: The last time I heard about BP's licensing news was the VASP license in Dubai. Are there any developments in other regions?
We are actively applying for various licenses globally and striving to complete them as soon as possible. The U.S. team is an important part of our future development, after all, I am from California.
By the end of the year, if we can operate compliantly in the U.S., we will be able to legally access users in countries and regions that account for 95% of the global GDP. This is consistent with the world map I presented at last year's SolanaBreakpoint. We are making good progress in compliance, and our goals are gradually being achieved.
*Ruby Note: For this part, I recommend listening to Web3brand's podcast interview with BackpackCanSun (link in the next item).
5. New Products & Ecosystem: In the next 6-10 months, what new products will Backpack launch? Will it expand to new L1 or L2 ecosystems?
We are about to launch a margin system and derivative trading, which will greatly improve capital efficiency. Since the FTX incident, few platforms have been able to recreate such a high-quality product experience.
Regarding expansion to more chains:
Monad has strong technical capabilities, and we have known them for a long time. I am very much looking forward to their development. I believe that expanding EVM is currently one of the most important issues. Sui is another public chain worth paying attention to, with an impressive team behind it. I believe that as long as the team is composed of excellent, intelligent, and hardworking individuals, they will excel in whatever they do. In addition to the two mentioned earlier, in the future, we will certainly collaborate with more excellent ecosystems.
We will continue to increase our collaboration with more decentralized applications and protocols. At the same time, the development of crypto applications requires more innovation from us in terms of technology, such as researching account abstraction, smart accounts on Solana, etc., to improve the on-chain experience.
6. About Payments and Stablecoins: I saw the collaboration with StraitX in Singapore for payments, enabling QR code conversion to the Singapore stablecoin XSGD. Are there plans to enter the stablecoin business?
Great question! Regarding whether to enter the stablecoin business, centralized exchanges (CEX) will be important partners for stablecoins. We do not have specific plans in the short term, but we are exploring some collaboration opportunities, such as strengthening cooperation with stablecoin issuers. Our collaboration with StraitX on the Singapore dollar stablecoin can be seen as the beginning of this exploration.
7. About Vision: In your mind, what will Backpack and Madlads become in 5 years?
I hope that crypto can be used by as many people as possible. I believe this is an inevitable trend, just a matter of time, and it requires us to solve some technical challenges.
I firmly believe that for the younger generation, cryptographic technology will become a very natural part of their lives and will be meaningful to them. As the proportion of millennials, Gen Z, and the Alpha generation born after 2010 (note: coming of age in five years) in the population continues to increase, cryptographic technology will become more and more popular, until all financial activities are used in a meaningful way with cryptographic technology.
We have the opportunity to participate in this growth process, to be part of these products, to be part of the people promoting this technology, solving problems, and potentially changing the world. We hope to be part of shaping the new era of financial infrastructure, just like Charles Schwab accounts, Robinhood, and bank accounts have become an indispensable part of people's daily lives.
Our ultimate goal is to become the preferred provider of financial management services for you. And I believe that this mission must be accomplished by a company native to cryptography.
*Ruby Note: After our conversation, Armani is really very sincere, humble, practical, and polite, and he has a strong belief in crypto.
Of course, I also know that he recently changed his name and hopes that everyone will call him "disgustingly convenient." lol
Many thanks to Armani for taking the time to communicate with us during the conference.
Looking forward to more product innovations!
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