Looking at Backpack from a new perspective: exploring the trinity of NFT, wallet and exchange super applications in the Solana ecosystem

What do you think of the recently discussed @Backpack wallet? Exchange? NFT community? You see, many people who first meet BP will be confused about how to position themselves. In my opinion, it is the "super application" of the trinity of NFT wallet and compliance exchange. It can even be understood as a DApp applet under the xNFT protocol, a "closed-loop ecosystem" for the wallet exchange to cultivate users in one stop. Why? Next, let me briefly talk about my understanding.

-What exactly is Backpack planning?

If you don’t look at the whole picture of what Backpack does, it is easy to be brought into the fragmented perception of Fragment. Some people love the NFT community culture of Madlads, some like the silky interactive experience of Backpack wallet, and some are optimistic about it. Exchanges and wallets apply a new trading paradigm integrating on-chain and off-chain. how to say? These are typical characteristics of BP. Compared with the current liquidity market where the blockchain ecosystem is completely separated and connected by composable lines, what BP does always makes people feel like Apple's closed-loop ecosystem.

In fact, in a completely open source blockchain protocol combination market, doing closed-loop things will always seem a bit maverick, but if you look at it over a long period of time, Android and IOS have always been competing in the battle, and there are losers. What? A closed-loop ecosystem based on community attributes will have a long process of popularization with different product lines breaking through. Behind the closed product line is strong community cohesion, leading product experience, and powerful resource consolidation capabilities, which will form a joint force at a certain point in time and become a competitive barrier that others cannot surpass. There was "Apple" before and "Xiaomi" next, and they are all doing this kind of business layout.

2) The entire product line of Backpack at this stage has obvious Solana ecological imprint, which means that its development will also be heavily bound to the Solana ecosystem. To a certain extent, Backpack has built a set of Native wallet exchanges and a set of xNFT applet DApp application markets for the Solana ecosystem.

In the short term, Backpack has obvious advantages and disadvantages in competing with other products and protocols in the full blockchain environment. For example, compared with ordinary CEX, Backpack cannot cover the entire blockchain ecosystem in a timely manner to grab various market opportunities. The first-mover advantage of coins attracts a wide range of user groups, but there is no doubt that some projects with obvious Solana genes can be fermented and grown in Backpack, and some early users who heavily participated in the Solana ecosystem will also receive greater expected market returns.

-What are the challenges and problems faced by Backpack?

Because of this, Backpack is bound to encounter certain resistance in the process of expanding the market. The airdrop distribution incident is a typical example. Objectively speaking, due to compliance factors, Backpack selects high-quality projects and issues Airdrops to users who contribute transaction volume. This is a long-term incentive and gain behavior. In the long run, users who are BPs will definitely have better benefits. For users, it is equivalent to earning a stable "high annualized amount" on an exchange. However, as mentioned above, user welfare is the secondary distribution of the platform's consolidation of resources. The intensity of single user participation , the amount of capital investment, and the key is that the project party’s expected release of chips requires coordination by the platform. It’s okay to extend the cycle to achieve comprehensive returns, but it’s difficult to focus on a single instance of airdrop returns. Even if it is not handled well, public opinion will backfire.

-Why is this happening?

Essentially, Backpack is a platform that gathers and integrates resources, attracts high-quality project parties to issue airdrops, and then attracts high-quality users to drive growth. This will be a long-term and dynamic tradeoff process. The platform cannot guarantee that 100% of users will obtain absolute benefits in every operation. After all, it is the project party that distributes the chips, the total amount of airdrops is constant, and the amount of users and funds participating in airdrop activities is uncontrollable. It must be less, it’s a simple truth.

Essentially, this is an incentive process of chip distribution. The platform is based on the goal of attracting new users, increasing activity and a "reward mechanism" achieved by user participation and retention. How to avoid being counterattacked is actually a technical job. Instead of taking the risk of loss with the mentality of gaining excess arbitrage returns in the short term, it is better to lengthen the cycle and calculate the rate of return from a longer-term perspective. On the one hand, the platform relies on resource premiums to obtain Airdrop Benefits already have top-level resource advantages (Pyth, W, etc.). On the other hand, after all, Backpack’s own platform growth expectations (coin issuance) are also a “gap-compensating” benefit that will be implemented at some point in the future.

-How to define the industry value of Backpack?

Backpack I tend to regard it as a "super application" derived from @solana's high-performance layer1 public chain.

In the Bitcoin and Ethereum ecosystems, everyone is eager to tell the story of layer2 infra, but the application story has been delayed until at least the next bull-bear conversion cycle due to the implementation being less than expected. In contrast, Solana's ecological differences are quite large. It focuses on high-performance public chains, plays MeMe to attract incremental users outside the market, and plans DePIN's super narrative to lay the foundation for future application implementation. In the process, a large number of DeFi and Games have also been derived. , NFT, Payment and other various ways of playing. There is a feeling that the Solana ecosystem has been developing with the genes of web2 and web3 from the beginning to the end. Therefore, the development of "applications" is an issue that cannot be avoided and will become the main theme of the current bull market of the Solana ecosystem.

At this stage, almost every blockchain system is faced with the objective factor that telling B-side stories has greater imagination than C-side applications. Therefore, when everyone is playing layer2 and other infra is in full swing, Solana ecological growth The trinity of super application paradigm of NFT wallet and compliance exchange has emerged. NFT provides community culture and stickiness, the wallet serves as the user participation entrance and DApp application distribution center, and the compliance exchange provides a compliance channel for deposits to connect with the real world.

At a time when the entire blockchain ecosystem is criticizing the financial hype attribute for being too heavyweight, Backpack’s super application paradigm is more like importing a mature product line growth model of web2 into a web3 environment. It will have certain guiding significance for the maturity of the industry by accelerating the implementation of application ecology and the popularization of mature web2 product power philosophy.

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