Original author: Rubywang.eth (X: @rubywxt1)
During Solana Breakpoint last week, I had the honor of interviewing Backpack founder @armaniferrante for 40 minutes at the venue. Several questions were quite direct, such as competition with CEX and DEX. Armani's first response was "Great Question, I love it", and he frankly shared his thoughts on competition, products, and user growth, which was very inspiring.
Here is the full interview (I asked 7 questions in total):
1. About SuperApp: Backpack started as a web3 wallet, and now adds the experience of an exchange to the wallet. Most centralized exchanges such as Binance, OKX, Bybit, etc. have also added web3 wallets to CEXApp. Ultimately, everyone wants to build a SuperApp. How do you provide unique services and product experiences? What do you think of this comparison?
I think most of the products or teams you mentioned just now think that the crypto world and centralized exchanges are two separate things. If you look at the design, there is a similarity that the tab above is like "Parallel Universe".
For us, we hope that these two things will be integrated, and I think this will be the trend in the future.
The user experience should be that when I log in to my exchange account, enter my email, password, and two-step verification (2FA), I can not only see my trading portfolio, but also directly access all my wallets. In our application, the boundaries between on-chain and off-chain experiences are gradually disappearing, and we hope to create an unprecedented seamless experience for users.
*Ruby Note: I just tried the upgraded Backpack mobile CEX experience this week. It is quite unique. When logging into CEX from the wallet, the boundary between decentralized applications and centralized trading platforms is very blurred. The updated App interface:
Follow-up question: Could you please introduce the current internal team division of labor and personnel situation of the Backpack product?
Backpack's three-end products include browser plug-ins, WebApps, and mobile apps. The browser plug-in only has wallet functions, the WebApp only has exchange functions, and the mobile app is an integrated wallet and exchange application that is being built. The number of developers for each product currently does not exceed 10, and it is a very streamlined team. We have an engineer-oriented culture internally, where everyone has a strong sense of ownership, pays deep attention to the product, and everyone cares about the overall situation of the product. Therefore, we can act quickly and think about all Backpack products together in a harmonious way, which is our core competitiveness.
*Ruby Note: @Web3Brand previously wrote about Telegram, which is also a very small team project: 1 billion monthly active users, a development team of only 30 people, 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 users like me, after some DEXs upgraded their mobile product experience and provided functions such as fiat currency deposits and withdrawals, the DEX experience on the chain is 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 possible cannibalization of CEX market share?
Wow, that’s a great question, I love it!
First, let me give you a brief response: I like this trend and I think it's good for us too.
Fundamentally, if the on-chain economy does not grow, there is no point for centralized exchanges and wallets to survive.
I have no doubt that the success of DEX is closely related to our success. What we want to solve is not to compete with DEX, but to work hard to provide users with an entry point in the wallet, while solving some of the difficulties 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 and 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 real industries. If you want to operate and develop in the real world, you must follow rules and laws. We hope to improve the traditional financial system together, including stocks, bonds, etc., not just some memecoins. We try to fill the gap between them, not only providing excellent products and exchanges, but also providing users with a best-in-class solution that can integrate crypto-native products to better manage personal finances.
What are the reasons for the new generation of young people to use the previous generation of financial applications?
“When was the last time you felt excited about using your banking app?” Mainstream finance doesn’t have experiences that engage consumers the way Instagram or TikTok does.
We have a different role than many DEXs. Our goal is to make DEXs more valuable by bringing these assets on-chain. This is a long-term goal and vision that is critical to the growth of the entire crypto economy.
I have a good relationship with the founders of these projects, and I am very supportive of the development of DEX. As the saying goes, "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 grow with them.
3. About growth strategy: I am glad to see that Backpack is moving closer to the goal of becoming a SuperApp. Can you share some of your current strategies for user growth?
Our growth ultimately depends on building the best products we can.
What I think about more is how to make Backpack the best application for managing all personal finances, where everyone can manage their assets in a one-stop manner in a safe, easy way with a good user experience.
Therefore, our first important strategy is “product first” and removing all obstacles to user experience.
Unlike some other applications, we did not design the exchange and wallet as parallel or separate applications. For example, Coinbase has independent exchange and wallet applications, and some trading platforms do not even develop Web3 wallets. Our philosophy is to integrate these experiences harmoniously to eliminate all barriers to use, 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", "crypto technology will eventually dominate the financial field."
That’s why we integrated all the features into one app. I think this integration is an important problem that needs to be solved and is the direction we focus on. Through this integration, we aim to provide users with a seamless financial ecosystem, blurring the boundaries between traditional finance and crypto finance, and ultimately achieving a perfect fusion of the two.
Another factor that continues to be important to us is that we rode the wave of the Solana resurgence, seeing it go from $8 to $200 to its current price.
According to feedback from 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 many exchanges still don’t pay enough attention to Solana. I came to the Solana ecosystem (development and entrepreneurship) in 2020 and participated in 4 years of Breakpoint. Many BP’s listing and airdrop projects such as Pyth, Wormhole, Tensor, Parcel, Drift, Kamino, etc. are the most important projects of Solana. We are also the first to become very close friends with these excellent projects. Therefore, we hope to continue to support and make some small contributions to the entire Solana ecosystem, provide an entry point for users and traffic, and become a portal for many people to enter the Solana ecosystem and learn about these projects.
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, etc. Chinese community members will also fly to major cities to participate in and organize gatherings, injecting fresh vitality into the entire Backpack community. It is an important part of our brand and growth.
4. Compliance and Licenses: The last time we heard about BP’s licensing was the VASP license in Dubai. Is there any progress in other regions?
We are actively applying for various licenses around the world and strive to complete them as soon as possible. The US team is an important part of our future development. (After all) I am a Californian.
By the end of the year, if we can operate legally in the United States, we will be able to legally reach users in countries and regions that account for 95% of the world's GDP. This is consistent with the world map I showed at last year's Solana Breakpoint. We are making good progress in compliance and our goals are being achieved step by step.
*Ruby Note: For this part, I recommend listening to Web3brand’s podcast interview with BackpackCanSun (link in the next post)
5. New Products & Ecosystem: What new products will Backpack launch in the next 6-10 months? Will it expand new public chain L1 or L2 ecosystems?
We are about to launch a margin system and derivatives trading, which will greatly improve capital efficiency. Few platforms have been able to recreate such a high-quality product experience since the FTX incident.
About expanding to more chains:
Monad is a very strong technical team and we have known each other for a long time. I am very excited about their development. I think scaling EVM is one of the most important issues at the moment. Sui is another public chain worth paying attention to, and the team behind it is impressive. I believe that as long as the team is composed of excellent, smart and hardworking people, no matter what they do, they will perform well. In addition to the two mentioned above, we will certainly cooperate with more excellent ecosystems in the future.
We will also continue to increase cooperation with more decentralized applications and protocols. At the same time, the development of crypto applications requires us to have more innovations in technology. We are also researching account abstraction, smartaccount on Solana, etc., to make the on-chain experience better.
6. Regarding payment and stablecoins: I saw the payment cooperation with StraitX in Singapore, which enabled payment by scanning QR code and converting it into Singapore stablecoin XSGD. I am curious whether there are any plans to enter the stablecoin business?
Good question! Regarding whether to enter the stablecoin business, currently centralized exchanges (CEX) will be important partners of stablecoins. We don’t have specific plans in the short term, but we are exploring some cooperation opportunities, such as strengthening cooperation with stablecoin issuers. Our cooperation with StraitX on the Singapore dollar stablecoin can be regarded as the beginning of this exploration.
7. About vision: In your mind, what will Backpack and Madlads look like in 5 years?
I hope crypto can be used by as many people as possible. I believe this is an inevitable trend, it is just a matter of time and requires us to solve some technical problems.
I firmly believe that for the younger generations, crypto will become a natural part of their lives that makes sense to them. As the proportion of the population increases, including millennials, Gen Z, and Gen Alphas born after 2010 (note: adults in five years), crypto will become more and more popular until all financial activities use crypto in a meaningful way.
We have the opportunity to be part of this growth, to be part of these products, to be part of the people who are promoting this technology, solving problems, and hopefully changing the world. We want to be part of shaping the new era of financial infrastructure, just as Charles Schwab accounts, Robinhood, and bank accounts are an integral part of people's daily lives.
Our ultimate goal is to become your preferred financial management service provider. And, I believe that this mission must be accomplished by a crypto-native company.
*Ruby Note: After communicating with him, I found Armani to be very sincere, modest, pragmatic, 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
Thank you so much Armani for taking the time to speak with us between sessions.
Looking forward to more product innovations!
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