🧐Discussing the characteristics that a new generation of compliant exchanges should possess—

In the context of a declining market, the returns from CEX wealth management are becoming increasingly low.

However, just a few days ago, I saw that @Backpack's USDC has maintained an APY of over 10% with a decent yield.

After some research before depositing, I initially thought Backpack had faded from view, but upon closer inspection, I discovered some different aspects.

The current BP, which we refer to as "New BP," aims to be a new generation of compliant centralized exchanges (CEX) that provides users with a professional and secure trading experience while ensuring compliance.

How do we understand this concept?

Since the Binance penalty incident, there has been more discussion about the compliance of exchanges, making compliance a top priority. Secondly, FTX previously left a very good impression as a user-friendly CEX designed specifically for traders, indicating that there is still room for evolution in current CEXs. Therefore, I believe the new generation of compliant exchanges should possess the following points:

1) Trading Convenience

The core team members of Backpack, including Armani and Can, come from FTX, Alameda Research, and the Solana Foundation. This team not only inherits FTX's strong genes in the cryptocurrency market but also excels in product launches—

In traditional financial markets, derivative trading such as forex, gold, and commodity futures has long been a common tool for professional investors. However, in the cryptocurrency field, due to a lack of industry transparency, contract trading is often misunderstood or even "demonized."

BP is committed to becoming a new generation of compliant centralized exchanges (CEX) that provides users with a professional and secure trading experience while ensuring compliance, allowing these functions to work better through security and convenience.

It is reported that BP has launched innovative features such as interest-bearing contracts and automatic lending, specifically designed for professional traders, providing opportunities for arbitrage, high-frequency trading, and rolling trades.

Additionally, BP improves lending efficiency through algorithm optimization, offering users higher annualized percentage yields (APY). The platform does not rely on intervention in trading for profits but instead introduces features like interest-bearing contracts and automatic lending through technological innovation, specifically designed for professional traders, providing opportunities for arbitrage, high-frequency trading, and rolling trades.

The previously mentioned BP stablecoin has consistently maintained an APY of over 10%, which is attributed to this algorithm.

2) Compliance;

BP has currently obtained licenses in Japan, Dubai, and the European Union. As we all know, the Japanese market is phasing out several well-known exchanges, and BP may obtain more licenses in the future to further expand its compliant business.

Additionally, it is reported that Backpack has made significant efforts to obtain this European contract license, which is said to be very secure and supported by a complete algorithm.

Due to the enforcement of the EU's Markets in Crypto-Assets Regulation (MiCA) and stricter legal enforcement, several unlicensed offshore trading platforms have been forced to close their derivative businesses in Europe.

Backpack has become the only entity in the EU holding qualifications for crypto derivative services, including perpetual contracts. As a developed economy, the EU region's trading volume can account for 20-30% of the global business volume of various cryptocurrency trading platforms. The license obtained by Backpack EU is similar to those held by traditional financial institutions in Europe, allowing for the provision of more traditional financial services, including stocks and bonds, in the future.

(From: https://www.theblockbeats.info/flash/277038)

3) Asset Security;

Compliance is the first line of defense for security, and the second line of defense is to eliminate certain issues from the wallet end.

Founder Armani has mentioned that BP is about to launch user-abstracted self-custody wallets, which means that the platform does not need to hold KYC information, allowing users to directly control their wallets without needing private keys.

I don't know when this attempt will be launched, but it seems imperative.

So, looking at it, I believe we should not demonize derivative trading; derivative trading platforms will have their own ecological niche. If BP can accurately position itself, I think it will be a great attempt!

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