Backpack, a renowned Solana-based NFT wallet app, announced its upcoming crypto exchange, the Backpack Exchange, this Tuesday.
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Backpack: From NFTs to crypto exchange
Backpack, powered by Coral, is not just an NFT wallet app. It’s known for introducing the xNFT (or “executable NFT”) standard and for its association with the famous Mad Labs profile picture (PFP) collection on Solana.
Despite the buzz, Backpack Exchange is yet to welcome the public. Coral announced that the exchange, in the works for five months, hinges on cutting-edge technologies like zero-knowledge proof of reserves and multi-party computation (MPC). However, it’s crucial to note that VARA’s license pertains exclusively to Backpack Exchange, not the broader suite of services within the Backpack app.
Backpack founder and CEO Armani Ferrante emphasized the need for transparency and compliance in exchanges:
“It shouldn’t be normal to use an exchange with a single point of failure, without proof of reserves, or without auditability,” he said.
Ferrante’s statement echoes the lessons from Coral’s dealings with the ill-fated FTX exchange, which collapsed in November 2022. Coral lost a substantial $14.5 million investment due to FTX’s closure.
Backpack secured a Virtual Asset Service Provider license from Dubai’s Virtual Assets Regulatory Authority (VARA), enabling the company to move forward with the exchange.
VARA, responsible for supervising virtual asset activities in Dubai, awarded the license after a stringent evaluation process. A VARA spokesperson commended Backpack Exchange’s dedication to prioritizing investor protection and risk assurance, noting the rigorous assessment it underwent.
Up and running by October
The much-anticipated Backpack Exchange is set for a private beta launch in November, initially available to members of Coral’s Backpack and Mad Lads communities. The general public can expect access in the first quarter of 2024. Initially offering spot trading of cryptocurrencies, the exchange aims to diversify into derivatives, margin trading, and more, subject to obtaining additional global licenses.