migvy

If you are new to $BP Here is probably the easiest way to understand what Backpack is: Backpack started in the Solana ecosystem in 2022, founded by Armani Ferrante (creator of Anchor btw) Today, the company is trying to combine several businesses that traditionally operate separately: - Backpack Wallet - Backpack Exchange - Backpack Securities - Tokenized US stocks - Lending and perpetual futures - $BP - Mad Lads But let’s focus on Backpack Securities. Because Backpack is attempting to connect traditional US equities directly to Solana. And I want to explain exactly how that works. Imagine buying NVIDIA shares through Backpack. You can hold your position through its traditional brokerage infrastructure. Or, if you’re eligible, you can convert that position into a tokenized security on Solana. And potentially use it in compatible DeFi protocols. Then, if you want to return to the traditional market, you can deposit the token back into Backpack and convert it into the corresponding traditional position. The conversion is designed to work in both directions at a 1:1 ratio. Backpack’s traditional securities are structured as security entitlements through its brokerage and clearing infrastructure. The tokenized version represents a claim through a structure holding the underlying securities, with conversion rights through Backpack. The infrastructure involves: - Backpack Securities Global Limited - Atomic Vault Securities - RQD Clearing Blockworks Research analyst Sam Schubert compared execution costs for tokenized equities on Backpack and Robinhood Chain. For a $1-$100 order in tokenized Micron ($MU): Backpack: 0.12% Robinhood Chain: 5.42% Approximately 45 times cheaper We also have to check Arbitrage. Imagine tokenized NVIDIA trading below the price of the underlying stock. An eligible market maker could potentially purchase the discounted token, convert it into the traditional position through Backpack and sell it in the traditional market. If the token trades above the underlying stock, the process can work in reverse. Purchase the traditional position. Tokenize it. Sell the token on Solana. That conversion mechanism can help keep tokenized prices close to the underlying assets, provided redemption remains available and the costs make the trade worthwhile. It also opens the door to something traditional brokerage accounts generally cannot offer: Transferable securities that can interact with onchain financial infrastructure. If you’re following $BP, these are the numbers I’d watch: - Actual tokenized equity trading volume - Liquidity on Solana - Conversion and redemption activity - Growth in eligible jurisdictions - BP staking versus future supply unlocks - Progress and final terms of the equity participation programme Backpack is attempting to connect a centralized exchange, traditional brokerage infrastructure and onchain financial markets. Interesting to see how this evolves this cycle! (NFA and DYOR always)