A centralized exchange, not a DeFi protocol — it shows up in Monad "DeFi TVL" only because trackers count the balance sitting in its own custodial wallets as a rough reserve proxy.
Backpack is a centralized exchange and multi-chain wallet app — not a DeFi protocol. Its founders have direct FTX and Alameda Research lineage: CEO Armani Ferrante was an early Alameda hire in 2018 before building Anchor, the dominant smart-contract framework on Solana, and later Coral, an NFT/dev-tooling startup that lost $14.5M of its operating funds in the FTX collapse; co-founder Can Sun was FTX's former general counsel, who testified against Sam Bankman-Fried under a non-prosecution agreement and says he hired other former FTX legal and compliance staff into Backpack. The exchange raised a $17M Series A led by Placeholder VC in February 2024 at a $120M valuation, with backers including Hashed, Robot Ventures and Amber Group. Backpack appears on Monad DeFi and TVL dashboards because aggregators track exchanges' known deposit-wallet addresses as a rough proxy for reserves, the same proof-of-reserves-style approach used for large CEXs like Binance and OKX. In practice, the "TVL" figure attributed to Backpack on Monad is simply the balance of user-custodied assets sitting in Backpack's own wallets at a given moment — not liquidity locked in any smart contract.
Backpack publishes daily zero-knowledge proof-of-reserves attestations, verified by security firm OtterSec, reporting a roughly 100% reserve ratio at launch — a meaningfully more frequent cadence than the monthly attestations common elsewhere in the industry. But proof-of-reserves has a specific, limited scope: it proves assets existed in Backpack's wallets at the moment of the snapshot, not that Backpack's liabilities are fully covered or that the exchange is solvent on an ongoing basis. That's precisely the gap that destroyed FTX, the exchange three of Backpack's own founders came from — a reserve snapshot alone wouldn't have caught FTX's problem.
DeFiLlama's own methodology defines TVL as value locked inside a platform or protocol's own smart contracts, and it deliberately maintains CEX reserve tracking as a separate category from DeFi TVL rankings — its own documentation states that combining the two would send the wrong signal, since DeFi TVL is meant to indicate confidence in smart-contract security while CEX reserve data indicates confidence in custodial solvency, categorically different things. Practically, chain-level trackers that scan all addresses holding a chain's tokens can sweep a CEX's wallet balance into "chain TVL" by mistake if that address isn't explicitly excluded, since both are technically on-chain — a data-quality issue, not evidence of DeFi activity.
Against Yuzu Money, Beefy and Upshift — all three non-custodial by contract design, where funds either stay in a smart contract users can verify or move only between whitelisted contracts — Backpack is categorically different: a user's MON sits in an account custodied by Backpack's legal entities, and the user holds an internal ledger claim rather than a private key to the actual on-chain address. This isn't necessarily worse — daily proof-of-reserves is genuinely ahead of most CEX practice — but it's a different risk category entirely: custodial and counterparty risk (insolvency, mismanagement, regulatory seizure, exchange-level key compromise) rather than smart-contract or oracle risk.
Backpack added Monad wallet support and listed MON for spot and perpetual trading starting on Monad's mainnet launch day, November 24, 2025, and supports Monad as a deposit and withdrawal network for assets like USDT. Beyond exchange listings, Backpack acquired FTX Europe for roughly $32.7M in January 2025, inheriting Cyprus CySEC and MiFID II licensing — though that acquisition remains disputed, with the FTX bankruptcy estate separately contesting Backpack's account of the deal and asserting FTX EU remains part of the estate. In March 2026, Backpack launched its BP token on Solana with a 1 billion supply, 25% airdropped at launch and explicitly 0% allocated to founders, team or investors at that point — instead using a staking-to-equity mechanic letting long-term BP stakers convert their stake into up to 20% of the company in aggregate.
These are custodial exchange risks, not smart-contract risks — depositors have fully surrendered control of funds to Backpack, so standard CEX counterparty risk applies (insolvency, mismanagement, a hack of exchange infrastructure, or withdrawal freezes), not an on-chain exploit risk. The FTX EU acquisition's disputed ownership status is a live, unresolved legal question, not settled history. No independent audit or attestation was found specifically covering Backpack's Monad-held reserves distinct from its overall daily proof-of-reserves; the figure trackers report for "Monad TVL" is a mechanical wallet-balance sum, not a Monad-specific certified report. Worth flagging plainly: when this number shows up inside an aggregate "Monad DeFi TVL" total, it can visually inflate the impression of on-chain DeFi activity when it's actually off-chain-controlled exchange float.
No. It's a custodial claim against a centralized exchange, not funds locked in a Monad protocol contract — DeFiLlama's own methodology treats CEX reserves and DeFi TVL as separate categories specifically because conflating them sends the wrong signal.
Different risk types, not directly comparable on one scale. Backpack carries custodial and counterparty risk, mitigated but not eliminated by daily zero-knowledge proof-of-reserves attestations — which prove assets existed at a snapshot, not that liabilities are covered or the exchange is solvent. A non-custodial vault keeps you in control of your assets but exposes you to smart-contract and oracle risk instead.
Chain-level trackers often scan known addresses holding a chain's tokens; if a CEX's wallet address isn't explicitly excluded, its balance can get swept into "chain TVL" since both are just addresses holding tokens on-chain. DeFiLlama's practice of keeping CEX reserves in a dedicated, separate section from DeFi TVL rankings reflects the correct methodology.
Sources: Backpack — Monad is Coming, Backpack raises $17M Strategic Series A led by Placeholder VC — Backpack Blog, Backpack launches BP token on Solana with 25% airdrop, no insider allocation — CoinDesk, Proof of Reserves at Backpack — Backpack Learn, What to include as TVL — DeFiLlama Docs
Last reviewed 2026-07-08. More Monad research.
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