Organized & Compiled: TechFlow
Podcast Source: Bonnie Blockchain
Original Title: You Can't Make Money in One Bull-Bear Cycle! Don't Be Impatient! Don't Be Envious! [Bonnie Blockchain]
Release Date: March 13, 2025
Key Insights Summary
In this podcast, BackPack founder Armani Ferrante delved into several core topics in the crypto industry, from the market significance of Meme coins to the unique value of Non-Fungible Tokens (NFTs), from the role differences between centralized exchanges (CEXs) and decentralized exchanges (DEXs) to how to design user-friendly self-custody solutions.
He also shared his journey from being an Apple engineer to diving into the crypto industry, as well as his unique insights on market cycles, project evaluation, and long-term value creation. Here are the key insights from this podcast:
Meme coins are not just 'toys' in the market, but an emotional expression of the good and bad things that have happened in the industry over the past few years. They express frustration with 'air projects', scams, and regulatory uncertainty, like a 'middle finger' to the world.
CEXs and DEXs are not mutually exclusive. The role of CEXs is to bridge traditional finance and the crypto economy, and their compliance allows the introduction of real-world values (such as government bond yields) onto the chain.
Don't try to 'make all the money' in one cycle, but participate in the industry with a multi-cycle perspective.
If you were to choose any of the 'seven deadly sins', never choose envy. Instead of envying those who made 2000% on Meme coins, focus on the things you can create long-term value with.
We have designed a brand-new trading platform where users can not only earn lending and staking rewards, but also use these assets for cross-asset margin trading. This design significantly improves capital efficiency, something that existing exchanges have difficulty achieving.
The true value of the crypto industry lies in its global nature, not just serving a particular country or region.
The Market Significance and Emotional Expression of Meme Coins
Armani Ferrante began by stating that the popularity of Meme coins is not just a 'toy' in the market, but actually reflects the collective sentiment and history of the entire crypto industry. He sees Meme coins as a form of market expression, a response to the good and bad things that have happened in the industry over the past few years. Specifically, Meme coins express the following emotions:
Frustration with 'air projects' and scams: The rise of Meme coins is a counterattack against the 'air projects' (vaporware) and scams (rug pulls) that lack real value.
Anger at market unfairness: Many investors feel the market is unfair, and Meme coins have become a way to vent this emotion.
Reaction to regulatory uncertainty: Regulatory uncertainty has made it difficult for many genuinely useful projects to progress, and Meme coins respond to this predicament in a satirical way.
He pointed out that Meme coins have a sense of 'rebellion', like a 'middle finger' to the world, conveying an attitude of "you've made us this way".
Furthermore, Armani mentioned that the essence of Meme coins is actually "stories", as they embody collective beliefs and collective experiences. As he quoted Chris Dixon, "The next big thing always starts out looking like a toy." Meme coins may be the 'toys' of the moment, but the stories and emotions behind them are worth deep consideration.
The Value and Cultural Significance of Non-Fungible Tokens (NFTs)
When discussing NFTs, Armani emphasized their unique value. He believes that the special aspect of NFTs is their combination of art, identity, and cultural expression, making them the "luxury goods" of the digital age. Here is his in-depth analysis of NFTs:
Intuitiveness and Broad Appeal: The artistic nature of NFTs makes them more easily understood and accepted by the general public. Compared to traditional crypto assets, NFTs can attract the attention of mainstream culture, such as the participation of celebrities (like Eminem and Snoop Dogg) and brands (like Zara and OK Bears).
Redefining Digital Luxury: NFTs are a more efficient form of luxury goods. Traditional luxury items (like Rolex watches or Hermès bags) are limited by the physical world for display, while NFTs can be showcased 24/7 globally and have their authenticity verified through the blockchain.
Fundamental Human Needs: He believes the value of NFTs lies in their ability to satisfy human needs for identity, status, and community belonging. This "status signaling" and "tribal signaling" are rooted in human nature, and NFTs provide a digitized form to fulfill these needs.
Armani also mentioned that while the prices of some NFT projects may fluctuate, blue-chip projects like CryptoPunks will become increasingly valuable as the crypto industry goes mainstream. He summarized, "Everything of value is essentially a Meme, but not all Memes have value."
From Apple Engineer to Crypto Entrepreneur
Armani shared his journey from leaving Apple to entering the crypto industry. He recalled being deeply attracted by the "world computer" concept in the Ethereum white paper, which he considered one of the coolest technologies he had ever seen. His transformation experience mainly includes the following key points:
Apple's Closed Culture: While working at Apple, he felt the company's culture was closed and secretive. For example, to participate in the development of the iPhone X, he had to go through strict security training and even cover devices with black cloth in the office to prevent other colleagues from seeing them. This environment made him feel a lack of trust and openness.
The Open Culture of the Crypto Industry: In contrast, the openness and collaborative spirit of the crypto industry deeply excited him. The young people in the community share ideas through open-source projects, forums, and conferences, an atmosphere that strongly appealed to him.
The 2017 Crypto Bull Market: During the bull market, he saw many people trading Bitcoin in the office and participating in Discord groups, a vibrant scene that made him decide to quit his job and dive into the crypto industry full-time.
Armani mentioned that when he resigned, he didn't have a clear plan, just saved a year's living expenses and started getting involved in open-source projects. He described himself at the time as "probably harassing people all over GitHub", trying to find an entry point. His first crypto job was joining Alameda Research, but he soon found himself more interested in smart contracts and open-source software than the trading business.
The Roles of Centralized and Decentralized Exchanges
When discussing the relationship between centralized exchanges (CEXs) and decentralized exchanges (DEXs), Armani emphasized that they are not mutually exclusive, but rather complementary. He used the following examples to illustrate the importance of centralized exchanges:
The Example of Circle and USDC: Circle is a centralized institution, but through compliant operations, it has brought real-world assets (such as US dollars) onto the chain, providing infrastructure support for the decentralized ecosystem. For example, many DeFi protocols rely on USDC for trading and lending.
Compliance and Value Bridging: He pointed out that the core role of centralized exchanges is to serve as a bridge between traditional finance and the crypto economy. Through compliance, they can bring the value of traditional economic assets (such as government bond yields) onto the chain.
Criticism of the "Decentralization Replaces Centralization" Narrative: Armani believes this narrative overlooks the important roles of centralized exchanges in compliance and traditional financial asset bridging. He called for the industry to focus more on the synergistic relationship between the two, rather than creating opposition.
He summarized, "It's not about the opposition between centralization and decentralization, but the balance between compliance and censorship resistance."
User-friendly self-custody solution
Armani proposed an innovative self-custody solution aimed at resolving the current user's dilemma between asset security and usability. His design is based on multi-signature wallets and account abstraction technology, specifically:
Core Concept: By entrusting asset control to smart contracts rather than a single device (such as a hardware wallet), users can maintain self-custody while enjoying a user experience similar to that of a centralized exchange.
User Experience: After logging into the exchange account, users can complete transactions using 2FA and a hardware wallet (such as Ledger). This experience is similar to a traditional centralized exchange, but the assets are actually controlled by the user.
Asset Recovery Mechanism: If users lose their hardware wallet, they can undergo identity verification with the exchange's customer support team to recover their assets. Furthermore, even if the exchange goes bankrupt, users can still retrieve their assets through smart contracts and their own devices.
Technical Details: Armani mentioned that this design is based on a multi-signature wallet, which includes an instant signature and a delayed signature mechanism. For example, the user's hardware wallet can be set to a 7-day delayed signature, while the exchange's signature is set to a 90-day delayed signature, ensuring that the user always has priority.
He believes that this design can significantly reduce the risk of users losing their assets while maintaining the core concept of self-custody.
Market Cycles and Long-term Value
Armani's view on market cycles is that one should not try to "get rich quickly" within a single cycle, but rather seek projects that truly drive industry development from a multi-cycle perspective. He offered the following suggestions:
Focus on Talent and Project Quality: A key indicator of a healthy market is observing the influx of talented individuals and the quality of projects, rather than just focusing on price or trading volume.
Avoid Short-term Speculation: He warned investors not to be misled by short-term hype or narratives, but to focus on the technologies and teams that can bring long-term value to the world.
Multi-cycle Perspective: By taking a multi-cycle perspective, investors can avoid making wrong decisions due to FOMO (fear of missing out) and better grasp long-term opportunities.
He summarized, "Don't try to 'make all the money' in a single cycle, but rather participate in the industry with a long-term perspective."
The Core Innovation of Backpack Exchange
Armani introduced the design concept and core functions of Backpack Exchange, an innovative trading platform that combines the advantages of centralized and decentralized systems. The highlights of his design include:
Stacked Yields: Users can simultaneously earn lending yields and staking yields within the exchange. For example, users' assets can earn 2%-5% yields in the lending pool, while also earning an additional 8%-10% yield through staking.
Cross-asset Margin Trading: Users can use these assets as collateral for futures trading, significantly improving capital efficiency.
Product Differentiation: He pointed out that existing exchanges, due to the limitations of their historical technical architecture, find it difficult to implement similar functions, while Backpack Exchange's ground-up design makes these innovations possible.
He believes that this design can create more value for users while driving further evolution of exchange products.
Future Outlook and Global Markets
Armani outlined Backpack's future plans, including expansion into the Japanese and European markets. He mentioned that while Japan has strict regulations, it has a deep historical foundation and positive policy changes in the crypto industry. He also believes that the Asian market is an undeniable growth point for the crypto industry.
He concluded, "The true value of the crypto industry lies in its global nature, and we are building financial infrastructure for the world."
