What do you think of Backpack: NFT+wallet+exchange trinity application

Source: Chain View

What do you think of @Backpack wallet? Exchange? NFT community that has been the focus of discussion recently? You see, many people will be confused about how to position BP when they first meet it. In my opinion, it is a "super application" that integrates NFT+wallet+compliant exchange, and can even be understood as a "closed-loop ecosystem" that cultivates users in one stop under the xNFT protocol. Why? Next, let me briefly talk about my understanding.

What 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 cognition of Fragment. Some people love Madlads' NFT community culture, some people like the silky interactive experience of Backpack wallet, and some people are optimistic about its exchange and wallet application on-chain + off-chain integrated trading new paradigm. How to say it? These are the more typical characteristics of BP. Compared with the current liquidity market where the blockchain ecosystem is completely separated and connected by composable banks, what BP does always gives people a feeling of 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 unique, but in the long run, are there any losers in the competition and battle between Android and IOS? A closed-loop ecosystem based on community attributes will have a long process of popularization with different product lines breaking through one by one. Behind the closed product line is a strong community cohesion + leading product experience + strong resource consolidation capability empowerment, which will form a synergy at a certain point in time and become a competitive barrier that others cannot surpass. "Apple" in front and "Xiaomi" behind are all making such business layouts.

2) Backpack At the current stage, the entire product line has a clear Solana ecological imprint, which means that its development will also be heavily bound to the Solana ecosystem. To some extent, Backpack has built a set of Native wallets + exchanges for the Solana ecosystem, as well as a set of xNFT mini-program DApp application markets.

In the short term, Backpack has obvious competitive advantages and disadvantages compared to other products and protocols in the full blockchain environment. For example, compared with general CEX, Backpack cannot timely cover the entire blockchain ecosystem to grab various first-mover advantages in listing coins and attract 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 users who heavily participate in the Solana ecosystem in the early stage will also get greater expected market returns.

What are the challenges and difficulties faced by Backpack?

Because of this, Backpack is bound to encounter certain resistance in the process of expanding the market, and the airdrop distribution event is a typical example. Objectively speaking, due to compliance factors, Backpack selects high-quality projects to issue Airdrops to users who contribute to trading volume. This is a long-term incentive and gain behavior. In the long run, users who are BPs will definitely have better returns. For users, it is equivalent to earning a stable "high annualized" on a certain exchange. However, as mentioned above, user benefits are the secondary distribution of the platform's consolidation of resources. The single user participation intensity, capital investment, and the key is that the project party expects to release chips all need to be coordinated by the platform. It is okay to extend the cycle to get comprehensive benefits, but it is difficult to only focus on a single case of brushing volume + airdrop returns. In fact, if it is not handled well, it will definitely be backlashed by public opinion.

Why is this the case?

In essence, 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 dynamic and constant tradeoff process. The platform cannot guarantee that every operation activity will get 100% of users. After all, it is the project party that distributes the chips, the total amount of airdrops is constant, and the number of users and funds participating in the airdrop activities is uncontrollable. When there are too many monks, there must be less porridge. It is a very simple truth.

In essence, this is an incentive process for chip allocation. 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 reversed is actually a technical job. Instead of taking the risk of loss with the mentality of seeking excess arbitrage returns in the short term, it is better to extend the cycle and calculate the rate of return from a longer time dimension. On the one hand, the Airdrop benefits obtained by the platform in exchange for resource premiums already have top resource advantages (Pyth, W, etc.). On the other hand, after all, Backpack's own platform growth expectations (issuing coins) are also a "make-up" 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 the high-performance layer1 public chain of @solana.

In the Bitcoin and Ethereum ecosystems, everyone is happily telling the story of layer2 infra, and the story of the application has been delayed to at least the next bull-bear conversion cycle due to the landing not meeting expectations. In contrast, the difference in Solana's ecology is quite large. It focuses on high-performance public chains, plays MeMe to attract incremental users outside the market, and plans the super narrative of DePIN to lay the foundation for the implementation of future applications. In the process, a large number of diverse gameplays such as DeFi, Games, NFT, and Payment have also been derived. There is a feeling that the Solana ecosystem has been developing with the genes of web2+web3 from the beginning to the end, so the development of "applications" is a problem that will not be avoided, and it will also become the main theme of this round of bull market in the Solana ecosystem.

At this stage, almost every blockchain system faces the objective factor that the B-side story is more imaginative than the C-side application. Therefore, when everyone is playing layer2 and other infra, Solana's ecology has grown a super application paradigm of NFT+wallet+compliant exchange. NFT is used for community culture and stickiness, wallets are used as user participation entrances and DApp application distribution centers, and compliant exchanges are used to make compliant channels for deposits and the real world.

At a time when the entire blockchain ecosystem is criticized for being too hype about finance, Backpack's super application paradigm is more like importing a mature product line growth model of web2 into the web3 environment. It will have a certain leading significance for the maturity of the industry by accelerating the landing of the application ecosystem and popularizing the mature web2 product philosophy.

Based on the above observations, it is not difficult to understand some of the problems BackPack is currently facing:

1) The overly strong community attribute is an advantage and a disadvantage of large-scale expansion of the population. A large number of people who did not participate in the community in the early stage, including me, will be passively brought into the community;

2) Paying too much attention to compliance attributes is the foundation for its future growth and strength, but this also limits the diversification of early products and models, and requires a long-term growth drive;

3) "Super application" is always a good story, but when will the entire Crypto put aside infra and pay more attention to the landing of the application story? This is not just a challenge faced by Solana's ecosystem. Builders in the entire Crypto chain environment are all working hard for this.

I used to say that Solana, as a high-performance layer1, is leading the advancement of Crypto infra architecture in an "advanced" public chain form. It seems that I need to add a footnote to this judgment now. The DApp applet and Backpack software integrated closed-loop system under the xNFT protocol are also "advancing" the integration and landing of web2 and web3 applications.

Note: I believe that many people pay attention to Backpack because of its growth expectations for "FTX 2.0". They all want to know what kind of development height a project with FTX genes and equivalent background, and at the same time can learn lessons and "start again" will reach? Why not, wait and see.