Author: Rubywang.eth

During Solana Breakpoint last week, I had the honor of interviewing Backpack founder @armaniferrante exclusively at the venue for 40 minutes. Several questions were quite direct, such as competing with CEX and DEX. Armani's first reaction was "Great Question, I love it", and he shared his thoughts on competition, products, and user growth candidly, which was very inspiring.

The following is the full interview (I asked a total of 7 questions):

About Super App

Ruby: 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. are also adding web3 wallets to CEX App. Ultimately, everyone wants to build a Super App. How do you provide unique services and product experiences? How do you view this comparison?

Armani: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 similar place that the tab above is like a "Parallel universe".

For us, we hope that these two things are integrated, and I think the future trend will be like this.

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 CEX experience of Backpack mobile this week. It is quite special. I logged into CEX from my wallet. The boundary between decentralized applications and centralized trading platforms is very blurred.

Updated App interface

Ruby: Can you introduce the current internal team division of labor and personnel of Backpack products?

Armani: Backpack's three-end products include browser plug-ins, Web Apps and mobile Apps. The browser plug-in only has the wallet function, the Web App only has the exchange function, and the mobile App is an integrated wallet and exchange application that is being built. The developers of each product currently do not exceed 10 people, which is a very lean team. We have an engineer-oriented culture internally, 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 Telegram, which I wrote about before, is also a very small team work: 1 billion monthly active users, the development team has only 30 people, and the only product manager is the founder Durov himself.

How do you view the competition with decentralized exchanges (DEX)

Ruby: Maybe in the eyes of users like me, after some DEXs upgraded their mobile product experience and also provided functions such as fiat currency deposits and withdrawals, DEXs have been close to the experience of CEX on the chain, especially in low-gas environments such as Solana or some Ethereum L2. How do you view this trend and its possible erosion of CEX's market share?

Armani:First of all, a concise reply is: I like this trend, and I think it is also good for us.

Fundamentally, if the on-chain economy does not grow, centralized exchanges and wallets have no meaning to survive.

The success of DEX is closely related to our success, and I have no doubt about it. What we want to solve is not competing with DEX, but working hard to provide users with an entry point in the wallet while solving some difficult problems 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.

For the new generation of young people, what is the reason for using the previous generation of financial applications?

“When was the last time you felt excited to use a banking app?” Mainstream finance doesn’t have an experience that engages consumers like Instagram or TikTok.

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 DEXs. As the saying goes, “Rising tide raises all boats”, I am focused on scaling the market together. I want people to be able to use these decentralized applications in the Backpack wallet. If more people use decentralized applications, we will grow with them.

About Growth Strategy

Ruby: I'm glad to see that Backpack is moving closer to the goal of becoming a Super App. Can you share some of your current strategies for user growth?

Armani:Our growth ultimately depends on building the best product 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 safe, easy way with a good user experience.

So our first important strategy is to "put products first" and remove all obstacles to user experience.

Unlike some other applications, we did not design exchanges and wallets 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 bring these experiences together harmoniously to remove 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 will eventually dominate the financial sector".

This is why we have integrated all functions into one application. I think this integration is an important problem that needs to be solved urgently and is the direction we are focusing on. Through this integration, we aim to provide users with a seamless financial ecosystem that blurs the boundaries between traditional finance and crypto finance and ultimately achieves a perfect fusion of the two.

Another factor that continues to be important to us is that we have ridden the wave of Solana's resurgence, witnessing it from $8 to $200 and then to its current price.

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 many exchanges still don't pay enough attention to Solana. I came to the Solana ecosystem (development and entrepreneurship) in 2020 and participated in Breakpoint for 4 years. Many BP's listing and airdrop projects such as Pyth, Wormhole, Tensor, Parcel, Drift, Kamino, etc. are the most important projects of Solana. We were 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 entrance 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 area.

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.

Compliance and Licenses

Ruby: The last time I heard about BP's license was the VASP license in Dubai. Is there any progress in other regions?

Armani: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 compliantly 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 Solana Breakpoint last year. We are making good progress in compliance and our goals are being gradually achieved.

*Ruby Note: For this part, I recommend listening to Web3brand's podcast interview with Backpack Can Sun

New Products & Ecosystem

Ruby: What new products will Backpack launch in the next 6-10 months? Will it expand the new public chain L1 or L2 ecosystem?

Armani:We are about to launch a margin system and derivatives trading, which will greatly improve capital efficiency. Since the FTX incident, few platforms have been able to recreate such a high-quality product experience.

About expanding to more chains

Monad has strong technical strength and we have known each other for a long time. I am very much looking forward to their development. I think expanding EVM is one of the most important issues at present. Sui is another public chain worth paying attention to, and the team behind it is impressive. I believe that as long as a team is composed of excellent, smart and hardworking people, no matter what they do, they will perform well. In addition to the two mentioned just now, 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 studying account abstraction, smart accounts on Solana, etc., to make the on-chain experience better.

About payment and stablecoin

Ruby: I saw the cooperation with StraitX on payment in Singapore this time, which realized the payment of scanning code converted into Singapore stablecoin XSGD. Curious about whether there are plans to enter the stablecoin business?

Armani: 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.

About Vision

Ruby: In your mind, what will Backpack and Madlads become in 5 years?

Armani: I hope crypto can be used by as many people as possible. I believe this is an inevitable trend, it's just a matter of time, and we need to solve some technical problems.

I firmly believe that for the younger generation, crypto will become a natural part of their lives that makes sense to them. As the proportion of the population increases, the millennials, the Z generation, and the Alpha generation born after 2010 (note: adulthood 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 participate in this growth process, to be part of these products, to be part of the people who promote this technology, solve problems, and hopefully change 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 be your preferred financial management service provider. And I believe that this mission must be accomplished by a crypto-native company.

*Ruby Note: After communicating, Armani is really sincere, modest, pragmatic, polite, and has a strong belief in crypto.

Of course, I also know that he just changed his name recently, and I hope everyone will call him "disgustingly convenient" lol

Thank you very much Armani for taking the time to communicate with us during the meeting.

Look forward to more product innovations!