From: thepipeline_xyz
Backpack’s co-founder, Tristan, emphasizes the crucial role of community building in the crypto space, drawing parallels between Monad’s and Backpack’s genesis stories [03:19]. For Backpack, the initial focus was on fostering a group of committed individuals [03:28].
Building Initial Hype and Filtering Community
Backpack’s early market entry was executed without public announcement, creating an air of mystery [03:48]. Colleagues and friends in the Solana ecosystem changed their Twitter usernames to include “xnf” (e.g., xnf Anatoly, xnf Raj), sparking curiosity without revealing what “xnf” was [04:18]. This generated massive interest, with people following and engaging with the new Twitter account, leading to 10,000 organic followers in the first month without any paid engagement [04:46].
To channel this energy, Tristan created a private Discord, inviting people who posted excellent memes, interesting content, or seemed like potential contributors [05:09]. A specific GIF of an anime girl throwing a blue dodgeball was used as a public signal for those selected to join, creating a social phenomenon [06:14]. This led to a “Cambrian explosion of memes” as people emulated behavior, hoping for a whitelist spot for what they assumed would be an NFT project [06:39]. This filtering mechanism resulted in a core group of about 500 “hardcore chronically online crypto addicts and meme Masters” within their Discord, alongside 15,000 organic Twitter followers [07:05]. Tristan spent countless hours in the Discord, fostering personal connections and dialogue [07:31].
The “Blue Ball” Meme
A significant meme that emerged was the “blue ball” meme [07:46]. It combined the blue dodgeball GIF with the team’s intentional withholding of information about “x NFTs,” effectively “blue balling” the Solana ecosystem [07:50]. This meme generated infinite edits and further engagement [08:11].
Evolution to Mad Lads and X NFTs
The team realized that relying solely on product and technology was insufficient; they needed to allow the community to feel truly part of the building process [08:44]. Tristan draws an analogy to Bitcoin’s success: Satoshi’s technological advancement combined with early evangelists (cyberpunks, libertarians) created the intersection of product and culture necessary for widespread adoption [09:03].
To keep the community’s energy alive long-term, they decided to launch an NFT collection [09:51]. This community building exercise utilized the initial core group of 500-600 Discord members as the cultural backbone for the growing community (now over 30,000 in Discord) [10:00]. These “Mad Lads” were aligned with the team’s vision and ethos, becoming torchbearers of the culture [10:13].
The Mad Lads collection also served to showcase Backpack’s “xnf” technology, demonstrating how an NFT could also function as a decentralized application (xnf.to) [11:03]. This offered a depth of experience previously uncommon in the NFT space [11:41].
Innovative Community Engagement via the Wallet
Backpack used its wallet interface as a community engagement tool, even before the Mad Lads mint [12:10]. They implemented games within the locked wallet interface, where users could win invite codes to become beta testers and receive a whitelist for the NFT collection [12:41].
Examples of these games included:
- Guessing the AI-generated image prompt [12:54].
- Guessing animal sounds from audio files [13:55].
- Navigating a Minecraft map to find hidden codes [14:04].
These activities created shared experiences and genuine engagement, attracting a diverse range of participants, including team members and founders from other crypto projects [14:19]. Tristan notes that nothing else was happening in the bear market, making these unique experiences highly effective [13:47].
Strategic Evolution of Backpack and Mad Lads
Tristan explains that their strategy was a combination of his lifelong experience in digital community building (e.g., RuneScape, Discord, forums) and an iterative approach to emerging opportunities [16:16]. The private Discord, for example, wasn’t pre-planned but emerged as a way to channel Twitter energy [17:06]. Similarly, the NFT collection was not a starting intention for the wallet but became necessary to showcase x NFTs and keep the community’s energy alive [17:45].
The Mad Lads mint itself was unique, with whitelist claims, public minting, and a game to “unrug” the NFTs all done within the Backpack wallet [21:28]. This created an unprecedented interactive experience, generating immense hype during the dire crypto bear market of early 2023 [22:03]. It also brought in participants from across the crypto ecosystem (Ethereum, Bitcoin, Cosmos, VCs), helping to re-blossom the Solana ecosystem [22:53].
The Synergy of Wallet, NFT, and Exchange
The community’s success in building a “cult” is attributed to allowing people to participate genuinely in the story being built [20:26]. This “cult” is essential for distribution in crypto [21:04].
The Backpack Exchange was a serendipitous merger of Backpack’s product, engineering, marketing, and brand strength with a top regulatory and compliance expert [23:19]. This partnership aimed to fill the gap left by FTX [24:21].
Key aspects of the Backpack Exchange’s strategic approach:
- Regulatory Compliance from Day Zero: Backpack received the first Vara full retail cryptocurrency exchange license in Dubai, building from a regulatory approach rather than backtracking [25:06].
- Innovative Architecture: The exchange is built as a permissioned blockchain with validators running instances of the exchange, allowing for replayability and potential future participation from regulators or institutions [26:04].
- Proof of Reserves: Infrastructure for ZK proof reserves is being built to allow users to verify their funds [27:04].
- Balanced Approach: Positioning itself between Coinbase (compliance paragon) and Binance (crypto-native, fast product delivery), Backpack aims to be compliant while remaining nimble and crypto-native [27:33].
- Integrated User Experience: The non-custodial Backpack wallet (on-chain journey) and the exchange (off-chain journey) are designed to recognize each other, creating a seamless user experience for moving funds between them [28:46]. This allows for easy conversion of fiat to gas tokens for on-chain activities [29:31].
- Mad Lads as Superfans/Superusers: The Mad Lads holders act as a “top of funnel,” bringing attention, testing products, and providing feedback [30:04]. This creates a synergistic “triangle” of wallet, NFT, and exchange [30:28].
The decision to operate outside the US regulatory environment and focus on Asia (Tokyo, Hong Kong, Singapore) was made due to the more favorable regulatory climate and the concentration of crypto energy in Asia [32:10]. Japan, specifically, has been slow but consistently moving towards being a web3-friendly jurisdiction [33:08].
Exchange Launch and Growth
The Backpack Exchange launched in November, driven by a partnership with Pyth to serve as a distribution vehicle for their token generation event [34:13]. This launch event, which offered 10 million Pyth tokens, went viral, especially in China [35:05]. It resulted in 140,000 KYC’d users in the first week and 74,000 participants in the Pyth drop [35:29]. While challenging (leading to 10 days of non-stop work and system breaks), it hardened the team and systems [35:38].
Since then, the exchange has seen significant growth:
- 350,000 active traders over the past few months [36:37].
- A point system launched in February generated absurd spot volume, going from 27.5 billion between Feb 13 and March 18 [36:42].
- Several days saw over a billion dollars in spot volume, with their SOL market becoming the largest in the world [37:08].
- A distribution of 27 million Wormhole tokens was made to 300,000 traders from the first snapshot, driving growth and onboarding new users to Wormhole [37:41].
- A peak of $8.6 billion in spot volume was recorded on one day for the second snapshot (Tensor drop) [38:30].
- Organic spot trading volume has plateaued higher after each event, from 30-60 million, and now to $120-160 million daily without incentives [39:11].
Backpack aims to continue adding products like Bitcoin, Ethereum, ERC20 tokens, and futures to make it a primary trading vehicle [39:51]. A key strategy is to drive exchange users, many of whom are centralized exchange primary users new to on-chain activities, to the on-chain world. For example, the Tensor drop required users to complete a trade on Tensor’s on-chain protocol via their wallet, leading to a surge in new unique wallet addresses [40:31]. This contrasts with other exchanges that aim to keep users contained to the centralized experience [41:09].
The Relationship Between Crypto and Social Media
Tristan asserts that crypto is run by Crypto Twitter, and storytelling happens solely through this platform [44:58]. Projects must embrace the entertainment side and not take themselves too seriously [45:07]. The viral “bean bag” photo of the Backpack team during the Mad Lads mint, which has garnered over 20-25 million impressions, exemplifies this [42:04]. Successful memes hit both sides of the “bell curve”—those who critique and those who understand the humor and dedication [44:00].
Future Outlook
Tristan is excited to continue growing the exchange and wallet, with a goal to become a mainstay international cryptocurrency exchange and one of the largest exchanges in the world [48:05]. This requires continued hard work and collaboration [48:18].
Final Alpha
Tristan’s advice is to live from a place of gratitude [50:02]. He emphasizes appreciating every moment, breath, and experience, as life can change unexpectedly [50:08]. Living with gratitude makes it easier to be happy and appreciate all experiences, both terrible and joyful [50:35].