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- Backpack offers token stakers direct equity ownership opportunity
- One year lockup grants access to company shares
- Ferrante targets token misalignment with equity conversion model
Crypto exchange Backpack has introduced a new structure that links token staking directly to company ownership. The exchange has indicated that it will give 20% of its equity to users who will stake its native token over a period of one year. The relocation is an indicator of a change in the conventional token reward system towards equity-based participation.
Armani Ferrante has established a policy, according to its founder, that allows users who pledge tokens for one year to receive equity at an agreed rate. He said that the structure aims at minimizing the incentive misalignment that has afflicted most of the token launches. According to Ferrante, he had not come to the crypto industry to produce what he termed a short-term speculative coin.
The company is instead staging the stakeholder model as a long-term alignment model between the users and the management.
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One Year Lockup Unlocks Equity Conversion
Those users who lock their tokens for twelve months will have the right to transform the holdings into the company equity. The distribution constitutes 20 of the firm as it operates currently. In addition, the exchange will be done at a fixed rate as opposed to a varying market rate.
Ferrante claimed that a lot of digital tokens are based on the promises associated with centralized teams. He observed that there is usually a limitation in token utility unless a protocol is capable of operating without its designers. Therefore, Backpack formulated the equity-linked structure to focus on such perennial fears.
The company claimed that the proposal is based on its existing announced tokenomics structure. The purpose of that structure was to prevent intensive insider selling and post-unlock pressure on retail parties.
Expansion Strategy and Valuation Milestones
Backpack is a centralized crypto exchange that deals with tokenized assets and controlled market access. In the early years of the year, the company was estimated to be worth about one billion dollars. It also collaborated with the registered transfer agent Superstate by the SEC in terms of assisting tokenized stocks on-chain.
The exchange is changing the form of the long-term incentives by providing equity rather than extra token emissions. Ferrante admitted that the platform is semi-centralized. He, however, explained the strategy as progressive decentralization as well as sustained alignment between the company and its users.
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