If you have to choose any kind of 'deadly sin', never choose jealousy.
Organized & Compiled by: Deep Tide TechFlow
Podcast Source: Bonnie Blockchain
Original Title: It's impossible to make money in one market cycle! Don't rush! Don't be jealous! [Bonnie Blockchain]
Broadcast Date: March 13, 2025
Highlights Summary
In this episode of the podcast, BackPack founder Armani Ferrante delves into several core topics in the crypto industry, from the market significance of meme coins to the unique value of NFTs, from the role differences between centralized exchanges and decentralized exchanges to how to design user-friendly self-custody solutions.
He also shares his journey from being an Apple engineer to diving into the crypto industry, along with his unique insights on market cycles, project evaluation, and long-term value creation. Here are the highlights from this podcast:
Meme coins are not just 'toys' in the market; they are an emotional expression of the good and bad things that have happened in the industry over the past few years. They express frustration towards 'air projects', scams, and regulatory uncertainty, like giving the world a 'middle finger'.
Centralized exchanges and decentralized exchanges are not oppositional. The role of centralized exchanges is to bridge traditional finance and the crypto economy, and their compliance makes it possible to bring real-world value (like government bond yields) onto the blockchain.
Do not try to 'make all the money' in one cycle; instead, participate in the industry with a multi-cycle perspective.
If you have to choose any kind of 'deadly sin', never choose jealousy. Instead of envying others who made 2000% with meme coins, focus on what you can create value in for the long term.
We have designed a brand new trading platform where users can earn both lending and staking rewards simultaneously, and also use these assets for cross-asset margin trading. This design significantly improves capital efficiency, which is difficult for existing exchanges to achieve.
The true value of the crypto industry lies in its global nature, not just serving a specific country or region.
Market Significance and Emotional Expression of Meme Coins
Armani Ferrante begins by mentioning that the popularity of meme coins is not just a "toy" in the market; it actually reflects the collective emotions and history of the entire crypto industry. He views meme coins as a form of market expression, responding to the good and bad things that have happened in the industry over the past few years. Specifically, meme coins express the following emotions:
Frustration towards 'air projects' and scams: The rise of meme coins is a counterattack against those 'air projects' (vaporware) and scams (rug pulls) that have no real value.
Anger at market unfairness: Many investors feel that the market is unfair, and meme coins have become a way to vent those emotions.
Response to regulatory uncertainty: Regulatory uncertainty has made it difficult for many genuinely useful projects to advance, and meme coins respond to this predicament in a mocking way.
He points out that meme coins carry a sense of "rebellion," as if giving the world the middle finger, conveying the attitude of "you made us this way."
Additionally, Armani mentions that the essence of meme coins is actually "story"; they embody collective beliefs and experiences. As he quotes Chris Dixon: "The next big thing always comes in the form of a toy." Meme coins may be the current "toy," but the stories and emotions behind them are worth pondering.
Value and Cultural Significance of NFTs
When discussing NFTs, Armani emphasizes their unique value. He believes that the special aspect of NFTs lies in their combination of art, identity, and cultural expression, making them the "luxury goods" of the digital age. Here are his in-depth analyses of NFTs:
Intuitiveness and Broad Appeal: The artistic attributes of NFTs make them easier for the public to understand and accept. Compared to traditional crypto assets, NFTs can attract mainstream cultural attention, such as participation from celebrities (like Eminem and Snoop Dogg) and brands (like Zara and OK Bears).
Redefining Digital Luxury: NFTs represent a more efficient form of luxury goods. Traditional luxury items (like Rolex watches or Hermès bags) are limited by physical display scenarios, while NFTs can be showcased globally 24/7 and verified for authenticity through blockchain.
Fundamental Human Needs: He believes that the value of NFTs lies in their ability to meet human needs for identity, status, and community belonging. This "status signaling" and "tribal signaling" are rooted in human nature, and NFTs provide a digital form to fulfill these needs.
Armani also mentions that while some NFT projects may experience price fluctuations, blue-chip projects like CryptoPunks will become increasingly valuable as the crypto industry mainstreams. He concludes: "Everything valuable is essentially a meme, but not all memes are valuable."
From Apple Engineer to Crypto Entrepreneur
Armani shares his journey from leaving Apple to entering the crypto industry. He recalls being deeply attracted to the concept of the "world computer" in the Ethereum white paper, considering it one of the coolest technologies he had ever seen. His transition involved several key points:
Apple's Closed Culture: While working at Apple, he felt the company's culture was closed and secretive. For instance, to participate in the development of the iPhone X, he had to undergo strict security training and even cover devices with black cloth in the office to prevent other colleagues from seeing them. This environment made him feel a lack of trust and openness.
Open Culture of the Crypto Industry: In contrast, the openness and collaborative spirit of the crypto industry excited him like never before. Young people in the community share ideas through open-source projects, forums, and conferences, which deeply attracted him.
2017 Crypto Bull Market: During the bull market, he saw many people trading Bitcoin and participating in Discord group discussions in the office, and this vibrant scene led him to decide to quit and fully enter the crypto industry.
Armani mentions that he did not have a clear plan when he resigned; he just saved a year's worth of living expenses and then began participating in open-source projects. He describes himself as "probably harassing people all over GitHub" trying to find an entry point. His first crypto job was joining Alameda Research, but he soon realized he was more interested in smart contracts and open-source software rather than trading.
Roles of Centralized and Decentralized Exchanges
When discussing the relationship between centralized exchanges (CEX) and decentralized exchanges (DEX), Armani emphasizes that the two are not oppositional but complementary. He illustrates the importance of centralized exchanges through several examples:
Example of Circle and USDC: Circle is a centralized entity, but it brings real-world assets (like US dollars) onto the blockchain through compliance, providing infrastructure support for the decentralized ecosystem. For example, many DeFi protocols rely on USDC for trading and lending.
Compliance and Value Bridging: He points out that the core role of centralized exchanges is to act as a bridge between traditional finance and the crypto economy. Through compliance, they can bring value from the traditional economy (like government bond yields) onto the blockchain.
Critique of the "Decentralization Replaces Centralization" Narrative: Armani believes this narrative overlooks the important role of centralized exchanges in compliance and bridging traditional financial assets. He calls for the industry to focus more on the synergy between the two rather than creating opposition.
He concludes: "It's not a conflict between centralization and decentralization, but a balance between compliance and censorship resistance."
User-Friendly Self-Custody Solutions
Armani proposed an innovative self-custody solution aimed at addressing the current conflict between asset security and usability for users. His design is based on multi-signature wallets and account abstraction technology, specifically as follows:
Core Idea: By giving control of assets to smart contracts rather than a single device (like a hardware wallet), users can enjoy a user experience similar to centralized exchanges while maintaining self-custody.
User Experience: After logging into the exchange account, users can complete transactions through 2FA and hardware wallets (like Ledger). This experience is similar to traditional centralized exchanges, but the assets are actually controlled by the users.
Asset Recovery Mechanism: If users lose their hardware wallets, they can verify their identity through the exchange's customer support team to recover their assets. Additionally, even if the exchange goes bankrupt, users can still retrieve their assets through smart contracts and their own devices.
Technical Details: Armani mentions that this design is based on multi-signature wallets, which include instant signing and delayed signing mechanisms. For example, a user's hardware wallet can be set for a 7-day delayed signing, while the exchange's signing can be set for a 90-day delayed signing, ensuring that users always have priority.
He believes this design can significantly reduce the risk of users losing assets while maintaining the core concept of self-custody.
Market Cycles and Long-Term Value
Armani's view on market cycles is that one should not try to "get rich quick" in a single cycle, but rather look for projects that truly drive the industry forward from a multi-cycle perspective. He offers the following advice:
Focus on Talent and Project Quality: A key indicator of market health is to observe the quality of talented individuals and projects entering the industry, rather than just focusing on price or trading volume.
Avoid Short-Term Speculation: He warns investors not to be misled by short-term trends or narratives, but to focus on technologies and teams that can bring long-term value to the world.
Multi-Cycle Perspective: By adopting a multi-cycle perspective, investors can avoid making poor decisions due to FOMO (fear of missing out) and better seize long-term opportunities.
He concluded, "Do not try to 'make all the money' in one cycle; instead, participate in the industry with a long-term perspective."
Core Innovations of Backpack Exchange
Armani introduced the design philosophy and core functions of Backpack Exchange, an innovative trading platform that combines the advantages of both centralized and decentralized systems. Highlights of his design include:
Stacked Earnings: Users can simultaneously earn lending and staking rewards on the exchange. For example, users' assets can earn 2%-5% in the lending pool while also gaining an additional 8%-10% through staking.
Cross-Asset Margin Trading: Users can use these assets as margin for futures trading, significantly improving capital efficiency.
Product Differentiation: He pointed out that existing exchanges find it difficult to implement similar functions due to historical technical architecture limitations, while the zero-to-one design of Backpack Exchange makes these innovations possible.
He believes this design can create more value for users while driving further evolution of exchange products.
Future Outlook and Global Market
Armani looked ahead to Backpack's future plans, including expansion into the Japanese and European markets. He mentioned that while Japan has strict regulations, it has a deep historical foundation in the crypto industry and positive policy changes. He also believes that the Asian market is an essential growth point for the crypto industry.
He concluded, "The true value of the crypto industry lies in its global nature; we are building financial infrastructure for the whole world."
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