Backpack signaled on Monday that its yet-to-be-released token will allow people to earn equity in the exchange, potentially turning users into owners amid its U.S. expansion.
Ferrante said the move is aimed at improving on existing models, considering that many projects fall short of promises to support tokens that derive their value purely from their utility. There’s also nothing forcing most projects to decentralize over time, he added.
I didn't come into crypto 9 years ago to launch a shit coin.
I didn't come into crypto to get rich quick.
I came into crypto because I believe it's going to change the world, and that the industry was something worth dedicating my life to.
The company hasn’t said when the token will debut. However, it asked people to verify their personal information last week to determine their eligibility for claiming it.
Decrypt has reached out to Backpack for comment.
The announcement underscores how players like Backpack are experimenting amid a more favorable regulatory environment. Under the SEC’s previous leadership, companies in the cryptosphere often tiptoed around tokens associated with their businesses.
The company has tied later distributions to a potential public offering, which could eventually unlock 37.5% of the token’s supply within a corporate treasury. The remaining share is set to be doled out to users in relation to growth milestones like regulatory approvals.
Ferrante recognized that the status quo has historically produced lackluster results, with token prices often falling after they are unlocked for investors and team members. If a team associated with a token is acquired, then that can raise uncomfortable questions, he added.
“Unless something is completely decentralized to the point where an immutable protocol can function with the team having retired in the Bahamas sipping pina coladas all day, then utility is just a promise,” he said, noting only a handful of tokens passed that test.
