Crypto exchange Backpack reveals tokenomics plan to prevent ‘dumping on retail’

Backpack, the emerging crypto exchange built by the team behind the popular Mad Lads NFT project, has unveiled a robust tokenomics strategy designed to fundamentally reshape how new exchange tokens are launched, focusing heavily on protecting retail investors from immediate price depreciation often caused by institutional early sales.

The exchange’s core philosophy centers on eliminating the ‘Venture Capital (VC) dump,’ a common occurrence where private investors and insiders receive massive token allocations at heavily discounted rates and immediately liquidate them upon the token’s listing, damaging the holdings of retail participants who bought at the public price.

Backpack’s plan features several key tenets to ensure a fair launch ecosystem:

1. **Zero VC or Institutional Allocations:** The most critical component of the strategy is the absolute exclusion of private sales to VC firms or large institutional investors. This means the initial circulating supply will not be controlled by entities seeking quick profit maximization.

2. **Community-First Distribution:** The vast majority of the initial tokens released will be allocated directly to the active Backpack community, primarily through trading rewards, farming incentives, and targeted airdrops. This mechanism ensures that tokens are in the hands of genuine users contributing value to the platform, rather than speculators.

3. **Strict Founder/Team Vesting:** While founders and core development teams will retain some allocation, these tokens will be subject to exceptionally long and rigorous vesting schedules, often involving multi-year cliffs. This structure aligns the team’s incentives with the long-term success and sustainability of the token and the exchange itself.

By adopting this ‘retail-first’ tokenomics model, Backpack aims to foster genuine community ownership and loyalty, positioning its native token launch as a major deviation from industry norms and potentially setting a new standard for transparency and fairness in decentralized finance.

Source: Crypto exchange Backpack reveals tokenomics plan to prevent ‘dumping on retail’