Backpack's valuation surpasses $1 billion, becoming a unicorn! Former FTX employee turns their fortunes around through tokenization

Former FTX employees establish Backpack, negotiate a $1 billion valuation, and raise $50 million to become a unicorn. Out of 1 billion tokens, 37.5% are locked after IPO, and 37.5% are circulating before IPO to prevent retail sell-offs. Airdrop of 250 million tokens to early supporters and 1 million to Mad Lads NFT holders. Started from Solana wallets, Series A raised $17 million.

Tokenization Innovation Behind the $1 Billion Valuation

According to Axios on Monday, Backpack, a crypto exchange founded by former FTX employees, has become the latest crypto platform to reach unicorn status. The company is reportedly in talks to raise $50 million in a new round at a pre-money valuation of $1 billion. This valuation is mid-sized among crypto exchanges, far below Coinbase (market cap hundreds of billions) or Binance (once valued at $300 billion), but a significant achievement for a new exchange operating just over two years.

According to The Block, Backpack announced its tokenomics plan, including a proposal to reserve 37.5% of its total 1 billion exchange tokens for the “post-IPO” company treasury. Co-founder Armani Ferrante explained that this plan aims to prevent “retail investors from dumping shares” and to align long-term interests.

Ferrante stated on Monday: “Only after the company goes public (or exits via other means) can the team profit from the project. Only when the company enters the largest and most liquid capital markets through an IPO—and only if the company puts in the effort—can the team reap the value created by the Backpack community from now until then.”

This “post-IPO unlock” mechanism is rare in the crypto industry. Most exchanges’ tokens release team allocations at TGE (Token Generation Event), often with lock-up periods of 1-3 years. Backpack, however, locks 37.5% of the team’s share until after the IPO. This design forces the team’s commitment to long-term growth—they must actually take the company public to realize maximum returns, rather than cashing out shortly after listing.

Innovative Token Distribution Mechanism

37.5% Post-IPO Treasury: Locked until after listing, ensuring long-term commitment

37.5% Pre-IPO Circulation: Unlock based on measurable milestones, such as expanding to new regions and launching new products

25 million tokens Airdropped: Rewards for early supporters and Backpack Points participants

100,000 NFT holders: Rewards for Mad Lads NFT community

Additionally, 37.5% of the supply will be circulating pre-IPO, based on measurable goals like expanding into new markets and launching new features. This milestone-based unlocking ensures token release aligns with business development rather than unconditional time locks. If Backpack fails to meet these targets, the corresponding tokens won’t unlock, providing extra protection for investors.

From Solana Wallets to Full-Feature Exchange

Backpack initially focused on Solana-based wallet projects, founded by the team behind Mad Lads NFTs in late 2023, including former Solana developers and Alameda Research early employees Ferrante, and former FTX General Counsel Can Sun, who testified in the Sam Bankman-Fried trial. The “ex-FTX employee” label is both an advantage and a burden.

The advantage lies in their practical experience building and operating large crypto exchanges. Before FTX’s collapse, it was the second-largest exchange globally, with hundreds of billions in daily trading volume. Ferrante and Sun’s technical and operational expertise from FTX is a key asset for Backpack’s rapid rise. The burden is FTX’s scandal taint, which may cause trust issues among investors and users. Backpack must demonstrate transparency and strict compliance to differentiate itself from FTX.

In 2024, Backpack raised $17 million in Series A funding, led by Placeholder VC, with other notable investors including Robot Ventures, Wintermute, and Selini. This lineup shows top-tier crypto VC confidence. From the $17 million Series A to the current $50 million raise at a $1 billion valuation, Backpack’s valuation has increased roughly 60-fold in less than two years—a rare growth rate in crypto.

Last year, the exchange acquired the European branch of the defunct crypto giant FTX, FTX EU, gaining access to the MiFID II regulatory framework. This strategic acquisition allowed Backpack to operate legally across the EU’s 27 countries overnight, saving years of licensing and approval time. Although FTX EU closed after the parent company’s bankruptcy, its license and compliance infrastructure remain valuable. Backpack acquired this asset at a relatively low cost (exact amount undisclosed but estimated well below starting from scratch).

Headquartered in Dubai, Backpack obtained a Virtual Asset Service Provider (VASP) license there. Dubai is one of the most crypto-friendly jurisdictions, with clear regulations and efficient licensing. Choosing Dubai as headquarters offers a relaxed regulatory environment and access to the European market via the FTX EU license—an extremely savvy global expansion strategy.

Regulated Exchange Competition Landscape

Backpack is a regulated spot and derivatives crypto exchange and multi-chain wallet, also expanding into lending and prediction markets. This “full-featured” approach is the current mainstream in crypto exchange competition. Spot-only trading is a red ocean dominated by giants like Binance and Coinbase. To stand out, new exchanges need differentiated services.

Backpack’s differentiation includes: multi-chain wallet integration (supporting not only Solana but also Ethereum, Bitcoin, etc.), lending services (allowing users to collateralize assets for loans or earn interest), and prediction markets (tapping into hot trends). This one-stop-shop strategy aims to increase user stickiness, keeping all crypto activities within the Backpack ecosystem to boost trading volume and revenue.

However, whether a $1 billion valuation is sustainable depends on Backpack’s ability to continue growing amid fierce competition. The crypto exchange market is highly crowded, with dozens of licensed exchanges in Dubai alone. Despite the experience of former FTX employees and the EU license advantage, Backpack still lags behind top exchanges in brand recognition, user base, and trading volume. Without rapid market share expansion in the upcoming bull market, the $1 billion valuation may be overestimated.