From: thepipeline_xyz
Backpack has played a foundational role in “the pipeline story,” particularly in the genesis of the Pipeline Podcast and the development of a vibrant community in the broader Monad community. Backpack, alongside its related projects Mad Lads, the Backpack Wallet, and the Backpack Exchange, has demonstrated a unique approach to community building, product development, and market strategy.
Origin of the Pipeline Podcast
The Pipeline Podcast was inspired by an early Twitter Spaces event featuring Armani, co-founder of Backpack, in September before the podcast officially launched [00:01:11]. This “awesome conversation” was the impetus to start the podcast, aiming to raise awareness about Monad and its ecosystem projects [00:01:28]. The success of this Twitter Spaces was so significant that Unice messaged the podcast host afterwards, suggesting further initiatives [00:01:50]. This highlights Backpack’s integral part in the Pipeline’s actual birth story [00:02:07].
Mad Lads and Community Building
The initial inspiration for Mad Lads was to build a strong community and create a cohesive group of people, sharing a similar genesis story with Monad [00:03:15].
Mystery Marketing and Filtering
Backpack launched into the market without publicly revealing its intentions, instead internally developing the idea of XNFTs – decentralized applications runnable within the wallet [00:03:46]. A key strategy involved friends and colleagues in the Solana ecosystem changing their Twitter usernames to include “xnf” (e.g., xnf Anatoli, xnf Raj) [00:04:18]. This created a huge air of mystery, leading to rapid organic growth, with 10,000 followers gained in the first month without paid engagement [00:04:30].
To channel this energy, a private Discord was created [00:05:24]. People were invited based on engagement, such as posting good memes or well-written content, or appearing to be a good contributor [00:05:31]. This filtering mechanism led to an influx of “chronically online crypto addicts and meme Masters” [00:07:23]. A public signal for Discord invites became the use of an anime girl GIF throwing a blue dodgeball, which sparked a “Cambrian explosion of memes” [00:06:14].
The “Blue Ball” Meme
The “blue ball” meme emerged from the combination of the blue dodgeball GIF and the fact that Backpack was “blue balling” everyone by keeping the XNFT concept a secret [00:07:46]. This further fueled engagement and led to even more creative content [00:08:11].
Launching the NFT Collection
As the wallet launch approached, it became clear that product and tech alone were not enough [00:08:44]. Inspired by the early Bitcoin evangelists who understood Satoshi’s innovation [00:09:03], Backpack realized the need for an intersection of product and culture [00:09:29]. The best community-building exercise was determined to be launching an NFT collection [00:09:55]. The core group of 500-600 Discord members, who were aligned with the vision and ethos, became the cultural backbone for the growing community, which now numbers over 30,000 [00:10:00]. The Mad Lads NFT collection also served to showcase XNFT technology, allowing NFTs to function as applications and provide deeper experiences [00:11:03].
Backpack Wallet and XNFT Technology
The Backpack Wallet was leveraged as a powerful community engagement tool [00:12:10]. Early beta testers for the wallet were granted whitelist access to the Mad Lads collection [00:12:26]. To win invite codes for the wallet, users participated in various games:
- AI Image Guessing: Users had to guess the prompt used to generate an AI image displayed in the extension [00:12:55].
- Animal Sound Guessing: Users had to identify the animal sound played through an audio file in the extension [00:13:55].
- Minecraft Map Navigation: A Minecraft map was created where users had to navigate and find hidden codes [00:14:04].
These games created shared experiences that fostered a genuine connection with the community, extending beyond financial incentives [00:14:16]. This approach generated significant excitement, even attracting team members and founders from other crypto projects [00:13:32].
Backpack Exchange
The launch of the Backpack Exchange was a strategic move, building on the success of Mad Lads and the Backpack Wallet [00:19:37].
Mad Lads Mint Experience
The Mad Lads mint was unique because it was entirely conducted within the Backpack Wallet [00:21:28]. This included the whitelist claim and the public mint [00:21:30]. A game was integrated into the minting process, where users had to “defeat the Mad King” by rapidly clicking on their screens to “unrug” their Mad Lads [00:21:42]. This innovative approach generated significant attention during a dire bear market in early 2023 [00:22:16], attracting participants from across the crypto ecosystem, including Ethereum and Bitcoin communities [00:22:57].
Genesis of the Exchange
The idea for the exchange emerged from a serendipitous meeting between Armani and a leading regulatory compliance expert in crypto [00:23:21]. Recognizing Backpack’s strengths in product, engineering, marketing, and community, and the expert’s knowledge of regulatory licensing, they merged forces [00:23:51]. The core idea was to fill the gap left by FTX [00:24:21]. The exchange was built in 6-7 months and launched in November [00:24:39].
Regulatory and Technological Approach
Backpack Exchange distinguishes itself by being completely regulated and compliant from day zero [00:25:06]. It received the first VARA full retail cryptocurrency exchange license in Dubai, structuring operations under their purview from the beginning [00:25:13]. This contrasts with other international exchanges that often adopt a “cowboy” approach before backtracking into regulation [00:25:30].
Technologically, the exchange is built as a permissioned blockchain, with different validators running instances of the same exchange. This allows for replayability of historical data and the potential for regulators or other trusted parties to run validators, creating a distributed system without a single point of failure [00:26:04]. The exchange also incorporates ZK proof of reserves, allowing users to verify their funds using the Backpack Wallet [00:27:04]. Backpack aims to be a balance between Coinbase (compliance) and Binance (crypto-native agility) [00:27:36].
Ecosystem Synergy and Growth
Backpack offers a seamless user experience by integrating its non-custodial wallet (for on-chain activity) with the exchange (for off-chain activity) [00:28:43]. This allows users to easily move fiat to gas tokens and trade meme coins on Solana, all within the same user domain [00:29:10]. Mad Lads holders serve as both “super fans” and “super users,” driving attention and providing crucial feedback [00:30:04].
The exchange’s launch event with Pyth saw significant viral marketing, especially in China, onboarding 140,000 KYC users in the first week and 74,000 participants in the Pyth drop [00:34:54]. This intense period, though challenging, hardened the team and systems [00:35:57].
Since then, Backpack Exchange has seen substantial growth, with 350,000 active traders [00:36:37]. Its point system, launched in February, generated 1 billion in spot volume [00:37:08]. The exchange distributed 27 million Wormhole tokens to 300,000 traders as part of its first snapshot [00:37:41]. A subsequent snapshot saw a single day with $8.6 billion in spot volume [00:38:30]. Notably, Backpack actively drives users to the on-chain world; for example, the Tensor drop required users to perform a trade on Tensor’s protocol, sending approximately 100,000 new users to an on-chain platform [00:40:31]. Backpack aims to keep providing products, including Bitcoin, Ethereum, ERC20 tokens, and futures, to make it users’ primary trading home [00:39:51].
Location and Regulatory Climate
Backpack made a conscious decision to operate outside the US regulatory environment due to its unfriendliness towards crypto [00:32:10]. The team focused on Asia, considering Hong Kong, Singapore, and Japan [00:32:38]. Japan was chosen due to existing team presence working on a cryptocurrency exchange license [00:32:49], its consistent move towards being Web3-friendly during the bear market [00:33:11], and its status as the third or fourth largest GDP globally, which correlates with crypto trading volumes [00:33:42].
Overall Philosophy
Backpack’s success is rooted in its understanding that people want to be part of a story and participate [00:30:22]. By allowing genuine participation, a “cult” of enthusiastic users is formed, which is crucial for distribution in crypto [00:30:58]. The team emphasizes an iterative and experimental approach, adapting strategies as new insights emerge [00:16:14].
A key takeaway from Backpack’s strategy is the importance of not taking oneself too seriously in crypto [00:44:56]. Crypto Twitter is the primary platform for storytelling, requiring entertainment value beyond mere ads [00:44:58]. Successful projects need to “hammer both sides of the bell curve” by creating content that appeals to both casual observers and deep crypto enthusiasts [00:43:40]. This approach of being “doomed to success” by being “unseriously serious” fosters a strong, engaged community [00:46:06]. For instance, Mad Lads were consistently told “no utility, this is a rug, send it to zero,” managing expectations and fostering a culture of enjoying the journey [00:46:41].
Beyond business strategy, a personal philosophy shared is the importance of living from a place of gratitude and not taking anything for granted, as life can change at any moment [00:50:02].