Last November, @Polymarket's market on @Backpack's valuation clustered around $1B, with roughly 82% of bets leaning in that direction.
Just two months later, in January, a new downside scenario around $700M was introduced. The center of gravity shifted quickly — today, about 67% of the market is concentrated there.
Polymarket has historically been a useful signal. But one important thing is often overlooked:
Prediction markets are not always “right,” especially when the underlying value depends on long-term optionality.
Structurally, prediction markets also struggle to capture forms of value that unfold over longer timeframes — such as 1)regulatory licenses that function as time-based barriers, 2)IPO pathways that represent institutional optionality, 3)compliance networks that act as strategic rails, or 4)superapp expansion that commands an entirely different category premium.
In other words, Polymarket often trades the visible layer of a project, rather than the long-term infrastructure being built underneath. Backpack is not simply another exchange. It is positioning itself toward the same category Coinbase dominates: a regulated global financial superapp.
Today, we believe Polymarket’s implied view of Backpack’s FDV may be structurally incomplete — not because the market is irrational, but because the current price may not fully reflect several core components of what Backpack is building.
This piece is not an attempt to provide a valuation target or investment advice. Rather, it is an effort to explain why prediction-market pricing can miss certain kinds of value, particularly in regulated financial infrastructure.
1. Key People Matter in Regulated Markets
Can Sun (Chief Compliance Officer)
Backpack’s CCO, Can Sun, previously served as legal counsel at FTX and was deeply involved in building its regulatory framework. In markets like the US, compliance is not a box-checking function — it is a competitive moat. Can Sun’s background includes Yale Law School (2010–2013) and direct experience navigating global regulatory rails across:
CFTC derivatives SEC/FINRA frameworks EU MiFID II Japan FSA and more This type of regulatory execution capability is rare in crypto.
Backpack’s Chief Compliance Officer, Can Sun, previously served as legal counsel at FTX and worked directly alongside SBF, playing a central role in designing the regulatory and legal architecture that supported the FTX structure.
In the US — where outcomes are often shaped by "networks" as much as credentials — he completed an engineering PhD and then attended Yale Law School from 2010 to 2013, one of the most influential training grounds for North American legal and political leadership. Notably, one of his alumni peers is the current US Vice President, J.D. Vance. It is reasonable to assume Can Sun may already have familiarity or proximity within that network. And given that @SBF_FTX' parents are also Yale Law School professors, the collaboration between Can and SBF may not have been purely coincidental.
Under the regulatory framework Can helped architect, FTX became one of the most aggressive exchanges globally in pursuing and assembling licensed rails across jurisdictions — including US CFTC (derivatives), FINRA/SEC (stocks), EU (MiFID II), Japan (FSA), the Bahamas (DARE Act), Australia (AFSL), preparations for UAE (VARA), and Canada (Restricted Dealer pathways).
This is the kind of regulatory execution capability that is exceptionally rare in crypto — and difficult to replicate.
Laurence King (Head of Audit)
Laurence King, formerly in senior audit roles at Citi and Morgan Stanley, represents another signal. Head of Audit is not common in crypto because most projects are not built for public-market scrutiny.
Its presence suggests something different: Backpack is building with institutional standards — and potentially an eventual IPO pathway in mind.
2. The Cycle Is Shifting Toward Financial Superapps
Historically, the endgame has always been clear: centralized exchanges ultimately become the main protagonists of each cycle.
Over the past year, multiple signals have begun to converge. The IPO of major stablecoin companies such as @circle reflects how crypto-native financial infrastructure is increasingly moving toward public-market standards (sources). At the same time, the emergence of payment players aiming to become onchain banks (sources) — alongside discussions like Nasdaq’s exploration of 24-hour trading— points toward a world where traditional financial rails and blockchain settlement begin to merge (sources).
@coinbase push toward tokenized equities, together with the broader movement of prediction markets toward CFTC-regulated derivatives status, further suggests that these components may soon be unified under a single financial platform (sources).
So far, on-chain markets have benefited from major infrastructure improvements. Clear business models have emerged, and perp-dex platforms have captured much of the narrative momentum. Many of them are likely to have a strong 2026.
But building a global superapp is fundamentally different. It is not enough to simply ship a good product. 1)Winning at that level requires regulatory depth across jurisdictions, 2)sustained legal and compliance execution, 3)institutional-grade human capital, 4)and the financial resources to compete in multi-year battles for licensed market access.
The superapp category is not built in a single cycle. It is built through infrastructure, regulation, and time.
3. What Markets Often Don’t Price:
3-1. Licenses
The market Backpack is targeting is not the DEX category.
It is the category led by @coinbase — the dominant financial superapp exchange with a market capitalization of roughly $110B.
Coinbase’s core competitive advantage has never been purely product. It is regulatory execution: prioritizing compliance, expanding globally through licensed rails, and attracting institutional capital.
To understand Backpack’s positioning, it is worth looking at the compliance and licensing infrastructure it has already built — and what that implies beyond short-horizon pricing.
Backpack’s current regulatory footprint includes:
MiFID II (via FTX EU)
JVCEA Type II (Japan)
Dubai VARA VASP
And its longer-term target rails include:
CFTC
BD/ATS
Among these, two are particularly important.
MiFID II (FTX EU)
Backpack secured an EU regulatory rail through the acquisition of FTX EU, inheriting MiFID II exposure.
This is not simply a license that appears on paper. It reflects a real accumulation of cost and time: the original acquisition price of $32.7M, plus M&A advisory fees, due diligence expenses, ongoing compliance management, audit infrastructure, and the burn required to execute the process over meaningful lead time.
These are exactly the kinds of structural assets that short-term prediction-market pricing tends to overlook.
JVCEA Type II (Japan)
Until 2017, more than 50% of Bitcoin trading volume occurred in Japan.
Many research firms and market participants expect 2026 to be a year in which liquidity returns aggressively, and “Japan money” re-enters crypto markets at scale. Regulation is gradually opening, and Japan may become one of the most competitive battlegrounds for global exchanges.
JVCEA Type II status represents the stage before full official exchange registration — effectively the preparatory rail toward becoming a licensed operator.
Backpack is notably the first US exchange, as a foreign entity, to directly obtain this stage of licensing in Japan. The reason is straightforward: Japan is not an easy market for outsiders. The domestic structure is highly protective, and meaningful barriers exist. Industry estimates suggest that, conservatively, achieving this level of regulatory positioning requires 2–3 years of sustained effort and ¥3bn–¥6bn in cost (sources).
This is precisely why @binance entered Japan through acquisition, purchasing Sakura Exchange rather than attempting a purely organic licensing path.(sources)
FTX similarly acquired Liquid Group — Japan’s first fully registered FSA exchange. Liquid was valued above $1B as early as 2019, suffered a major hack in 2021, and was later supported with $120M in funding prior to acquisition. A conservative estimate for that transaction ranges between $120M–$200M (sources).
If such regulatory rails were acquired through M&A today, what would that cost in 2026?
The Final Market: The United States
The last and most important market is the US.
Can Sun, Laurence King, and the broader core team have operated in this arena before — and importantly, the US is their home regulatory environment. As most observers recognize, this cycle has been unusually favorable for crypto in the United States. Political conditions have shifted, Bitcoin ETFs have been approved, stablecoin companies are moving toward IPO pathways, and the regulatory tone is meaningfully more constructive than in prior cycles.
In that context, the network effects matter. Can Sun’s institutional proximity — including elite legal and political circles — is not a trivial detail. and his classmate become a Vice president of USA. The playing field is increasingly set.
But the key question remains.
Has the market actually priced any of this optionality into Backpack’s current implied valuation?
We believe it has not.
3-2. IPO Optionality Is a Different Category
Public-market crypto exchanges are valued very differently than token-native platforms.
@coinbase, @krakenfx, @Bullish — these are not treated as speculative apps, but as institutional financial infrastructure.
@Backpack composition and audit posture suggest it is building closer to that category than most of the market currently assumes.
@reboundx_net has not only supported major perp-dex projects from an early stage, but is also directly aligned with Backpack as a partner. Members within our network have chosen to allocate resources toward Backpack because we see long-term potential in the infrastructure it is building.
The point is that For ecosystem participants, platforms that successfully reach the level of regulated, institutional-grade exchanges may eventually represent one of the few early opportunities to gain exposure to the next generation of exchange networks — particularly as the industry moves closer to IPO-level standards and compliant financial rails.
To better understand the category Backpack is aiming for, it is helpful to look at how publicly-oriented crypto exchanges have been valued in traditional markets.
The point is not that Backpack should be assigned any specific number today. Rather, it highlights that exchanges operating on institutional regulatory rails are ultimately valued in an entirely different framework than short-horizon token-native pricing suggests.
Backpack is positioning itself closer to that institutional category — and prediction-market pricing may not yet reflect what that implies.
3-3. Prediction Markets as Infrastructure — and Why Backpack’s Approach Matters
Prediction Markets Are Already Being Valued as Infrastructure
Prediction-market products are currently receiving extraordinarily high valuations from the market, despite still being a relatively small segment of DeFi. According to Messari, the total value locked in prediction markets remains under 1% of the broader DeFi ecosystem.
And yet, capital has begun to treat this category as something much larger.
Intercontinental Exchange (ICE), the parent company of the NYSE, invested $2B into Polymarket, and Kalshi has raised roughly $1B from firms such as Sequoia, a16z, Paradigm, and CapitalG.
So the question becomes: why is such a small onchain market being valued so highly?
If we understand prediction markets not simply as “online betting platforms,” but as an early form of a regulated derivatives exchange and a data-infrastructure layer, the rationale behind these high valuations becomes far more explainable. The funding behind Polymarket and Kalshi reflects a bet on a new piece of financial infrastructure—one that could eventually support institutional options hedging and standardized, everyday market contracts.
So how, are these projects trying to make the transition from “betting” to “regulated financial infrastructure”?
@Kalshi is already the first regulated prediction platform to secure a CFTC derivatives license, positioning itself as a binary-event contract exchange spanning elections, sports, and macroeconomic indicators.
@Polymarket, while currently serving primarily non-US users, is likely considering optionality around regulatory licensing and eventual US re-entry as well. Once licensing frameworks are in place, institutions may begin using these platforms not for speculation, but for hedging — bringing entirely different forms of liquidity.
In that sense, the high valuations reflect the market’s expectation that prediction markets may solidify into regulated exchange infrastructure.
With that context, the natural question becomes:
What kind of value could Backpack’s prediction-market layer ultimately carry?
To answer that, we need to consider three key factors.
1. FTX Has Already Built This Category Before Prediction markets are not new to Backpack
As early as 2020, FTX launched some of the first widely-discussed election-based prediction products in crypto, tokenizing outcomes such as the US presidential race. These markets generated significant volume and attention at the time, and demonstrated that event-based contracts can become meaningful financial products when paired with exchange-scale liquidity.
In other words, Backpack is not approaching prediction markets as an experiment — there is historical precedent and operational experience behind it (sources)
2. Backpack Is Already Engaged in the Regulatory Conversation
The long-term question for prediction markets is not whether users will bet — it is whether these platforms can mature into regulated financial infrastructure.
Kalshi’s rise as a CFTC-regulated event derivatives exchange is one example of this direction.
Backpack, importantly, is already operating within that regulatory orbit. The team has prior experience acquiring regulated rails — for instance, FTX’s acquisition of LedgerX was a direct pathway into CFTC-regulated derivatives infrastructure.
More recently, Backpack has actively participated in regulatory dialogue, including submitting formal commentary to the CFTC regarding frameworks for perpetual and leveraged crypto derivatives (sources)
This suggests prediction markets inside Backpack are being built with compliance and institutional viability in mind, not purely as consumer betting products.
3. This is not a simple copy — it is a structural redesign.
Backpack’s prediction market is also differentiated at the product level.
With the launch of its Unified Prediction Portfolio, Backpack is integrating prediction exposure into a single cross-margin system alongside spot, lending, perps, and other financial products.
Traditional prediction markets often suffer from a basic limitation: once capital is placed into an event contract, it becomes idle until resolution, creating significant opportunity cost.
Backpack’s model aims to remove that constraint. Rather than isolating prediction bets, capital can remain productive across the broader Backpack ecosystem — meaning prediction markets become part of a unified financial balance sheet, not a standalone silo.
If this structure succeeds, it would justify viewing Backpack’s prediction market not as a side feature, but as an institutional-grade extension of the exchange itself.
3-4. Real Stocks (Public Equities) & RFQ
Crypto platforms are approaching a point where real, regulated equities — not synthetic wrappers — will be onboarded directly.
Backpack has partnered with @SuperstateInc, an SEC-registered Transfer Agent. Superstate recently raised $82.5M in Series B funding (sources), and is building infrastructure that aligns issuer shareholder registries with onchain token representations — effectively providing the “opening bell” for compliant onchain securities.
What this enables is significant:
the trading of onchain securities that carry actual shareholder rights — including voting rights and dividend entitlements.
Most “stocks” that exist on-chain today aren’t real equities. They’re typically wrapped structures: the underlying assets are custodied off-chain, and a token is issued to track price exposure.
Through Superstate, Backpack aims to list SEC-recognized equities that are tied to real shareholder rights—while also unifying stablecoin banking rails and crypto trading into a single, integrated UI/UX platform.
RFQ as the Institutional Execution Layer
RFQ operates broadly across asset classes on top of Backpack’s unified cross-margin system. By leveraging internal vault liquidity and exchange infrastructure, it can allow institutions to build large positions with execution closer to OTC — reducing market impact and avoiding making footprint
Over time, this could also extend to retail users, enabling one-click access beyond crypto to traditional asset liquidity such as equities.
What happens when a user can earn yield on the same margin balance while simultaneously holding positions such as a
$BTC long
$Tesla long
macro hedge on a 50bp Fed
and seamlessly swapping across asset classes
That is not simply an incremental exchange feature, superapp.
3-5. Final Layer: Backpack Wallet
Finally, it is worth citing Messari analyst Justin Baba’s 2026 outlook (sources). While perpetual futures and prediction markets may capture much of the near-term growth, the ultimate beneficiary may be the interface layer, the wallet that organizes and routes users into these new financial rails.
Backpack Wallet is already positioned strongly in that role. With over 1M+ monthly active users, it provides a native distribution layer and an onchain revenue foundation that can expand from a wallet product into broader superapp liquidity infrastructure over time.
Importantly, this is not only theoretical. Backpack Wallet already delivers tangible user advantages: on Solana, for example, it offers zero-fee swap and bridging functionality, significantly reducing friction and improving the everyday experience of moving across assets and networks.
As financial activity converges across crypto, prediction markets, and tokenized assets, the interface that minimizes friction is often the one that captures long-term user behavior.
4. Final Thought: Polymarket Isn’t Wrong — It’s Limited
Ultimately, this is not about whether Polymarket is correct or incorrect.
The point is that prediction markets are structurally limited when it comes to pricing assets whose value is driven by long-term regulatory progress, institutional optionality, licensing barriers, and category-level expansion.
For platforms like Backpack, much of the real upside is not captured in short-horizon market probabilities. It emerges later — when regulatory rails open, products scale under compliance, and new markets become accessible.
Backpack is building across multiple layers at once: regulatory infrastructure, IPO-level readiness, superapp architecture, unified prediction market integration, real equities onboarding, and institutional execution systems such as RFQ.
Spring always begins underground. And Polymarket may not yet be pricing the roots. Consider the unpriced components outlined above, and revisit what Backpack’s long-term positioning may imply.
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**Disclaimer
This research is for informational and educational purposes only and does not constitute financial or investment advice. All opinions are based on publicly available information and subjective analysis at the time of writing and may change without notice. Cryptocurrency trading involves significant risk, including the potential loss of capital. Please conduct your own research and consult qualified professionals before making any investment decisions.
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