How to Go From Building an NFT Community to Launching a Global Crypto Exchange l KBW2024

[Music] thank you for joining us Armani thank you for having me um why don't we start with what is backpack you know you guys do a lot of things um I think you guys are led by you know crypto Community especially salana Community um seems like everyone just following you know what you're building um you know could you tell us more about what it is I think one of our investors said it best I think it was uh I think it was Chris berinsky uh he you know if if you look at the set of wallets and exchanges he basically said you know if you look at coinbase they're kind of like the Facebook of the exchange landscape everybody knows them respects them loves them they're Role Models uh for for many aspiring uh uh social media companies uh but if you look at backpack we are uh on the other hand uh we're less like Facebook and we're more like Tik Tok so kind of like a new upand comer uh but there's really three parts of the business that all kind of go hand inand to make a pretty unique uh and uh endearing uh community and and product ecosystem so on the one hand we have uh the international uh crypto exchange so we launched this a little over half a year ago uh uh we've done over about 60 billion in volume uh to date uh we have the wallet so a self- custodial key management system like metamask for example uh and we have madlads which is our uh uh incredible very genuine nft community that likes to make Ruckus all over the Internet and is a fervent group of uh crypto natives around the world so that's a little bit about us that's awesome and you know you've been a you know magician behind a lot of these Innovation here um could you tell us a bit more about your crypto and your journey into salana Community yeah so my journey into crypto was not unlike the Journey of many others I you know started my career in Silicon Valley I was working at Apple a software engineer I was sitting in the office and I saw some folks trading Bitcoin uh during the 2017 uh bull cycle and the price just kept going up up up and I just kept getting mind blown and uh basically I read the theory in white paper got nerd sniped I thought the idea of the you know decentralized World computer was the coolest thing in the world and so I jumped ship had no idea what I was going to do other than I just knew I wanted to work on open source software uh in crypto and uh kind of the rest of History uh I kind of got into salana specifically uh uh after very quickly realizing that well parallel parallelization mattered a bunch uh and I think a lot of folks particularly in the 2017 2018 bull cycle looked at the current architecture of blockchains which I guess I won't bore you with it's been litigated and researched uh uh time and time again uh from then until now but uh I just became a parallelization maximalist and and so got super excited about salana um and and a lot of the other kind of modern blockchains that are that are with us today yeah I can't agree more on your beginning point about you know sitting on the desk at Apple and thinking about crypto because I myself was robotics engineer and I a software engineer at uh Amazon uh and with my roommate at the time we were you know we would get off work at 4 pm and just start doing you know white paper reading and you know looking at the code on blockchain and just got really hooked and the energy in crypto Community was just so different from any Fang company that I was with before so definitely can relate on that um you built a backpack wallet in the salana community uh why did you choose to build wallet initially um you know that's an interesting entrance to the I guess industry obviously it's uh one of the biggest Gateway and also friction Point um you know why did you choose wallet to begin I think if there's one thing to point at uh in terms of why the industry matters and why a lot of us are here it all boils down to self- custody I think without self- custody a lot of I think what we're doing and what we're building doesn't matter and so I think from that perspective the wallet is one of the most important if not the most important tool and and Gateway to bring people into the industry and to showcase the best of of what all of this technology has to offer and so from that perspective wallets are extremely important extremely exciting I felt like we were able to bring something new into the landscape uh particularly in salana uh it's obviously grown and evolved uh a bunch since then but self- custody as uh you know the central tenant around you know a lot of why we're here I think is is kind of where we were coming from and and and why we went down that path that's awesome um and things got really interesting when you you know minted matls nft and it quickly became number one nft on salana um could you share some of the metrics uh that you guys had um through MLS and why did you decided to do nft yeah so I mean going back to the madlads mint we had minted at the bottom of the post FTX bare Market particular the salana be Market where the network was on the ground it was knocked out it was a sad time people were kicking it on the ground spitting in its face it was it was really dark time uh uh you know a lot of the nfts were like the like kind of The Golden Child of the network uh There Was You Know incredible businesses like magic Eden and tensor and hyperspace and others that were born out of the nft bull cycle and it really was what made I think the network culturally relevant in a way and culturally robust and rich in a way that I think most other networks basically all other networks other than Bitcoin and and and ethereum have have uh I guess been unable to reach um and the madlads mint was unique in the sense that we had uh we we had the ability to customize it beginning to end I think a lot of people at the time were really used to these launchpads but where you have this cookie cutter approach to minting an nft for the first time but an nft mint is probably the most important point in time for a project where you have an opportunity to tell your story uh where the entire world is looking at you in a way that is really hard to replicate after you've built the project and so we always went into the mint from the perspective of like this is the most important moment for madlads we're going to kind of show to the world kind of how we're different what we're excited about showcase our products and uh and really take advantage of of the attention and so uh we built this entire experience from beginning to the end including the white list so before we even got to the mint we had a Discord filled with a bunch of ravenous nft lovers around the world uh people that were downloading the the wallets downloading the app uh playing you know uh uh AI generated guessing games like Dolly and these things were coming out at the time and and basically we made a bunch of games where you had to compete to earn uh the white list uh for the for for for the nft so we had like AI uh images we had to guess the prompt we had like noises where you would hear like I don't know an owl screeching and you had to guess the type of owl we had these Minecraft 3D Puzzle hunts where you had to like open up your wallet and like go through this world to find these invite codes we just built a lot of stuff uh uh that was able to really I think Kickstart the storytelling and engagement in a way that I think was I think pretty unique and and and new uh uh and I think that is kind of you know a lot of what led up to the the hype and then you know fast forwarding to the actual mint I mean we built a bunch of stuff I won't kind of go through kind of the entire experience but what was unique about the mint experience is about a week before we mened madlads I got a message on telegram from I don't know what you want to call him a hacker a white hat a black hat a gray hat a security researcher I don't know but he basically said Armani I can take that on your site uh pay me money and uh he was basically extorting me uh and uh I was like well no like I'm not I'm not going to pay you money he was just like dsing us basically and uh and so we get to the mints and this guy comes back and and you kind of see all the requests and the logs and it was basically this kind of somewhat point in time famous battle between like us and this group of folks that were just trying to dos the mint to prevent us from minting or to Simply steal all the nfds and so it was kind of this back and forth battle between us and this uh uh this hacker or who whatever you want to call him uh that made it for a pretty dramatic events we ended up having to delay them in today because we weren't able to like mint it successfully uh basically the trade-off was you can mint it now and the guy steals all the nfts or you can wait today and build up more anticipation and it successfully and so we chose to to fight the battle and and and I think that turned up uh being the right choice in the end wow um how did you choose the mat lad's kind of visual you know language and uh what's the story of that specific style uh who were you trying like what kind of personas or um Community are you were you trying to appeal to so I think the metaphor that I like to use to describe this is you know it's easy to like look at an nft project look at an artist or look at a company or anybody for that matter any type of Creator and say oh this person's a total genius like they sat in this room and thought about this problem really hard and you know through their soul or divine intervention or was able to come up with this really creative thing but I think the right metaphor is actually much more of like excavation where if you can think about like you know you're you know in the world or you're in the desert and you're you're you're digging in the sand and you find you you you you your shovel hits a rock and then you're like oh that's kind of interesting and so you keep digging in that area and eventually you you you unwind or uncover this Lost Civilization of some I don't know building or structure or monolith from an alien civilization I don't know that that that was there you just discovered it um and I think the creative process is very much like that I think we had a couple design constraints going into mad Lads I think the first design constraint was above all else it has to be different has to be you know there was a bunch of of creatures at the time and so something as simple as just use a human and then you know you start thinking about the fashion and and and the art Direction and then okay well um an interesting point in time that everybody really kind of resonates with is like 1930s 1940s uh uh uh like British and American gangsters right that like look of like you know the peaky blinders and things like that uh I think a lot of credit uh goes to Tristan for kind of pioneering the uh the anime and and that art Direction um but it was all about just like uncovering these things one by one um so that was like the first moment where we saw a piece of artwork we're like okay that's that's interesting uh uh the PG blinders uh or the like American Gangster inspired artwork um and then like slowly but surely one by one we had kind of new pieces of like creative inputs that helped discover I think the the IP or whatever you want to call it I think another big moment that I really love to talk about is this moment from um um Gonzalo or monkey. he's sitting in the he's sitting in the sand here uh uh he made this uh Quinton Tarantino inspired clip where it was like all these like famous movies like Kil Bell and all these things um uh and he had this he had the like the Kil Bell soundtrack um playing in the background and just the words mad on it and we didn't use it for anything it was just like kind of like a creative piece of inspiration that I think emotionally distilled the soul of the artwork um at the launch event in New York yeah so there was a bunch of moments like this that you can point to and it wasn't like any one of them that like is responsible but it was really the like the Mosaic of all of them coming together and creating I think what became the Mad Lads there's obviously the community and and the mint experience and a million and one things that you can point to but I think that's like kind of the really interesting and really beautiful thing about the creative process is that there's not like one moment it's a million moments that over long period of time come together to create the picture that's awesome uh now moving on to the exchange um it's quite a ambitious you know bold move to go from wallet to nft project and now you built very loyal very active um and high buying power consumer base in your community um why did you decide that now is the time to build centralized exchange that's fully compliant um for your community so it's more or less my kind of belief that most projects in the space will end up in one of two extremes on the decentralization Spectrum and this may or may not be controversial I don't know uh on one side of the spectrum I think people will be completely and totally decentralized these are the Unis swaps world of the world uh really representing the best of what the industry has to offer whether it's you know immutable smart contracts or like really novel incentive mechanisms that are able to coordinate people from around the world where there's no single point of control there's no fragile central point of failure uh uh it's censorship resistant and uh uh kind of decentralized in like the truest sense of the term uh really I think a lot of the original ethos of the space um and then there's like the other side of the spectrum where you have traditional Finance basically where you have you know the compliance teams you have you know uh rules and regulations and this uh regulatory infrastructure that kind of underpins uh a large part of the financial systems and the various uh uh countries and locations uh uh where you're serving users and that's a really important uh uh component as well um and I think one of the big challenges with the industry is a lot of folks have been in this awkward middle midle ground where you know they talk about decentralization but they're really actually not decentralized they actually really quite fragile and I think you know uh in the limit or you know in the end State you really have to be at one of these two extremes and for us the wallet is one extreme and the centralized exchange is the Other Extreme where the wallet is just a piece of code that you run on your computer client side that's the epitome of free speech nobody controls your fate other than yourself uh and the exchange really is a traditional financial institution it has to follow all the rules and regulations that any other compliant exchange has to has to uh uh uh comply with uh but as a result you get a tap into a lot of the traditional assets and and and value that kind of underpins a lot of the world and I think that's like probably a pretty interesting part of the conversation in terms of like what does the exchange actually unlock but that's kind of the under pending philosophy that I think led us into it that's a very ambitious uh philosophy and also the vision there um could you share us some of the you know numbers run backpack exchange so far you know you guys are the newest Exchange in the blog and you guys been you know scaling uh quite impressively um yeah where is backpack at and what are some of the you know Milestones you guys have so far yeah so we launched with a spot only exchange on salana bitcoin and ethereum uh a little over half a year ago the time is kind of becoming a a blur for me but uh to date um we basically were able to ride this wave of salana from like $8 to like $200 back down to like what it is now it's like 140 or I 150 I don't know um and there was a ton of of token launch is that that really launched that were kind of the accumulation of honestly several years of just like really impressive engineering work whether it was a wormhole whether it was pith whether it was drift tensor um a lot of the most most I think impressive teams on the Sala Network launched at one of the most opportune times for us which is right when we started the exchange and so I think we got quite lucky and that we were able to ride that that wave uh with a lot of those token projects and so year-to date we've done about 60 billion in and and trading volume uh from from folks all around the world um and so yeah that's probably the the biggest kind of metric that is uh I guess quite interesting yeah and as we wrap up the panel um you know what you know what's Korean market for you uh for backpack Community you know why is Korean market important for backpack as exchange community and more I think Korea is obviously known for a lot of its really creative culture we were talking before coming up on the stage about all the uh artistic uh events and festivals and shows and a lot of the the culture that is is based here in Korea and I think you know if you think about you know backpack and mad Lads and I think the heart and soul of I guess the brand uh it's really rooted in in like cultural elements in a way that I think is pretty unique uh about our kind of wallet and exchange and so I think you know that is probably the the first thing that I would point to that makes me most excited about uh Korea more broadly that's awesome well Almani thank you so much for joining me in KBW this week and thank you so much everyone for joining us today at this stage thanks for having me by [Music]