Running alongside for three years in exchange for a "witch hunt verdict"! Major shareholders collectively defend their rights, and Backpack urgently "fights fires"

Author: Nancy, PANews

Supporting for three years, only to receive a “Witch Hunt Verdict.”

On March 23rd, the long-anticipated trading platform Backpack finally launched its TGE. In the current deep bear market, Backpack did not bring surprises; the token price has been falling since opening, and the current fully diluted market cap is less than $200 million. What shocked the community even more was widespread anti-whale behavior. Important community members complained in the group chat—they were blacklisted as witches, including long-term small-volume retail traders and large-volume whales. The rules were not disclosed, yet decisions were made unilaterally, leading to a severe trust crisis. Backpack was forced to open an appeal channel urgently on March 24th.

“When the market is good, you’re just taking others’ hair; when the market is bad, you’re taking the project team’s hair.” Someone pointed out the core issue sharply. After Opinion and Backpack airdrops failed to meet expectations, effectively ending the “hair-raising” track, even seasoned hair-raisers announced they were quitting.

KOLs are also not immune to anti-whale measures, and the Chinese community has become a major victim.

The promise of “community-only distribution” ultimately turned into a large-scale anti-whale scene.

Yesterday, Backpack finally opened the BP token claim channel. According to the previously announced rules, 25% of the total token supply (about 250 million BP) in this TGE would be allocated entirely to the community, with 24% distributed to points holders and 1% to Mad Lads NFT holders. The official emphasized that aside from this portion, all tokens belong to the community, with no team or investor shares involved in the initial circulation.

However, when the claim channel opened, it delivered a heavy blow to community users. Many found their points were drastically reduced or even reset to zero, leaving them with only symbolic participation rewards or nothing at all. Even more frustrating, most of these anti-whale users were not fringe accounts but long-term active single-wallet users, high-point farmers, and Mad Lads NFT holders—core participants.

Anger quickly spread in the community, especially among Chinese users, who became the main victims of the witch purge. Many large holders and KOLs flooded the community with complaints: “$4 billion trading volume, 100% witch rate,” “Over $1.5 billion trading volume, spent 800+ hours, over $300,000 in fees, but airdropped at half the value,” “33,000 points exchanged for 2,000 tokens,” “Top trading volume on the entire network, 170,000 points only got 20,000 tokens”… Behind these numbers are real capital and time investments, but in the final distribution, they were all categorized as witches and disqualified.

The dissatisfaction was not only about the disparity in rewards but also about the denial of contributions. Some users maintained long-term communication with the project team, some produced content endorsing the project, and others actively participated in community growth and ecosystem expansion. Yet, these efforts were not weighted or recognized; instead, they were erased.

More controversially, the approach was a collective punishment. Some community leaders responsible for growth and onboarding not only were purged themselves but also their invited genuine users were affected. This punitive mechanism turned the original social expansion growth model into a source of risk.

Furthermore, the rapid decline of BP tokens after listing amplified overall losses and worsened market sentiment.

All these disputes center on the lack of transparency in Backpack’s rules.

Backpack’s witch-determination criteria have never been publicly disclosed. Instead, risk control measures kept escalating during the process. Just before the TGE, Backpack required all accounts participating in points activities to complete KYC and conducted a large-scale review under the guise of “purifying the environment and rewarding genuine users.” Over 50 million points from non-authentic behaviors were identified and reclaimed for redistribution. But for users, what constitutes non-authentic behavior, what are the criteria, and where are the boundaries? These questions remain unanswered.

Can returning points and initiating token compensation rebuild trust?

Under pressure, Backpack rushed to “firefight.”

Claire, a team member, tweeted that the Backpack Chinese team had overnight intense discussions with the US/European teams. The Chinese team does not want the interests of previously supportive users to be affected and has engaged in deep communication with the anti-witch enforcement lead.

As an experienced compliance professional, Claire stated that in the anti-witch team’s logic, “single person, single account” is an absolute bottom line. Under this standard, more Chinese users were affected compared to other regions, which is due to different user habits. US and European users strictly adhere to rules and are sensitive to KYC info, making multi-account behavior beyond their understanding. Moving forward, Backpack founder Armani and the core team plan to open an appeal channel, establish clear rules, and maximize user protection.

Subsequently, the Backpack Chinese account announced the launch of an manual appeal channel, allowing users to submit materials for review. They also announced they would follow the “Rule No. 3”: if the same device operates three or fewer accounts and is judged as a witch, after manual review, at least 50% of points will be returned. Additionally, Backpack plans to initiate a special program in the coming days, conducting token buybacks on the secondary market to compensate eligible users.

However, for users who invested wholeheartedly, these measures may offset some losses, but once trust is broken, it’s hard to rebuild easily.

Lock-up for one year in exchange for equity? Backpack bets on the listing narrative

Historically, most crypto projects tend to open high and then decline, eventually falling into silence. Against the backdrop of a bear market, Backpack chose to bet on the listing narrative before token issuance to boost market confidence.

In February, CEO Armani Ferrante stated that the company follows a core principle in its tokenomics: no insider dumping on retail investors. Before achieving “escape velocity,” founders, executives, employees, or VCs should not profit from tokens. For Backpack, “escape velocity” clearly means an IPO in the US.

This implies that the token’s value capture will be re-anchored and closely tied to the company’s overall valuation. Recently, Axios reported that Backpack is in negotiations for a new funding round, aiming to raise $50 million at a pre-money valuation of $1 billion.

Backpack also shows “sincerity” in token unlocking. Besides 37.5% of tokens gradually unlocking before the IPO based on milestones, the remaining 37.5% will be stored in the company treasury and locked for at least a year after the IPO, with team members holding only company equity.

Moreover, Backpack announced it would allocate 20% of its equity to users who stake BP tokens for at least a year, allowing them to exchange tokens for company equity at a fixed ratio. Recently, Backpack launched an on-chain IPO share offering feature, enabling users to directly acquire IPO shares through the platform and register on a waiting list.

However, details of the token-to-equity conversion—such as the method, rights, and timeline—remain undisclosed. This has raised community concerns that it might be a new form of PUA, locking users first and then slowly fulfilling promises, using equity swaps to buy more time for the project.

Armani Ferrante also mentioned that going public could happen very soon, or it might not happen at all, or even be impossible. But regardless, he and his team will do their best.