Backpack TGE Airdrop Fiasco: After 3 Years of Participation, Users Flagged as "Sybil" and Whales Collectively Seek Compensation

Author: Nancy, PANews

After three years of support, only to receive a “Witch Hunt” verdict.
On March 23, the highly anticipated trading platform Backpack (Backpack) finally launched its TGE. In the current bear market, Backpack did not bring surprises; the opening price steadily declined, and so far, its fully diluted market cap is less than $200 million. What shocked the community was the widespread anti-support behavior. Key community members complained in the group about being blacklisted as witches—some were long-term small investors, while others were large traders dominating trading volume. The rules were never disclosed, yet the verdicts were enforced unilaterally, causing a severe trust crisis. Backpack was forced to open an appeal channel urgently on March 24.
“During good times, you support others’ interests; during bad times, you support the project team.” Someone pointed out the core issue sharply. As Opinion and Backpack’s consecutive airdrops left many in the community disappointed, it signaled the end of the “supporting” track. Even seasoned supporters announced their withdrawal from the scene.
Influencers are not immune from anti-support measures, and the Chinese community has become a major victim.
The promise of “community-only distribution” ultimately turned into a large-scale anti-support event.
Yesterday, Backpack finally opened the BP token claiming channel. According to the previously announced rules, 25% of the total token supply (about 250 million BP) would be allocated to the community, with 24% distributed to point holders and 1% to Mad Lads NFT holders. The team emphasized that all these tokens belong to the community, with no team or investor shares involved in the initial circulation.

However, when the claiming channel opened, it delivered a heavy blow to the community. Many users found their points were drastically reduced or even completely wiped out, leaving only symbolic participation rewards or nothing at all. What was even more frustrating was that most of these anti-support users were not fringe accounts but long-term active wallets, high-score farmers, and core participants like Mad Lads NFT holders.
Anger quickly spread in the community, especially among Chinese users, who became the hardest hit in this witch hunt. Many large investors and KOLs flooded the group with complaints: “$4 billion trading volume, 100% witch rate,” “Over $1.5 billion trading volume, 800+ hours spent, over $300,000 in fees, airdropped at half 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 figures are real capital investment and time costs, but in the final distribution, they were all categorized as witches and disqualified.
The dissatisfaction is not only about the profit gap but also about the denial of contributions. Some users have maintained long-term communication with the project team, produced content endorsing the project, or actively participated in community growth and ecosystem expansion. Yet, these efforts were not weighted or recognized; instead, they were erased.
More controversially, the approach is a collective punishment. Some community leaders responsible for growth and recruitment, not only got wiped out themselves but also affected their invited genuine users. This punitive mechanism turns the original growth logic based on social fission into a risk source.
Furthermore, the rapid decline of BP tokens after listing amplified overall losses and worsened market sentiment.

All these disputes center on the opacity of Backpack’s rules.
Backpack’s witch determination criteria have never been publicly disclosed. Instead, the risk control mechanisms kept evolving during the process. Just before the TGE, Backpack required all accounts participating in point activities to complete KYC and conducted a large-scale review under the premise 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, there has never been a clear answer on what constitutes non-authentic behavior, what the criteria are, or where the boundaries lie.
Can returning points and initiating token compensation rebuild trust?
Under pressure, Backpack rushed to “firefight.”
Claire, a team member, tweeted that the Chinese team had engaged in intense discussions overnight with the Europe and US teams. The Chinese team does not want the interests of previously supportive users to be affected and has communicated deeply with the person responsible for anti-witch enforcement.
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-speaking users were affected compared to other regions, which is due to different user habits. Western users’ strict adherence to rules and sensitivity to KYC information make multi-account behavior beyond their understanding. In subsequent handling, Backpack founder Armani and the core team plan to open an appeal channel, establish clear rules, and maximize user protection.
Later, the Chinese account announced the launch of an manual appeal channel, allowing users to submit information for review. They also announced they would follow the “Number 3” guideline: if the same device operates three or fewer accounts and is deemed a witch, after manual review, at least 50% of points will be returned. Additionally, the team plans to initiate a project in the coming days to buy back tokens on the secondary market for targeted compensation to eligible users.
However, for those who invested wholeheartedly, these remedies may offset some losses, but once trust is broken, it’s very hard to rebuild.
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. Amid the bear market, Backpack chose to focus on the listing narrative to boost market confidence before the token launch.
In February, CEO Armani Ferrante stated that the company follows a core principle in its tokenomics: preventing insiders from dumping on retail investors. Before achieving “escape velocity,” founders, executives, employees, or VCs should not profit from tokens. For Backpack, “escape velocity” is clear: the company plans to go public in the US.
This means the token’s value will be re-anchored and closely tied to the company’s overall valuation. According to Axios, sources say Backpack is negotiating a new funding round at a pre-money valuation of $1 billion, aiming to raise $50 million.
Regarding token unlocking, Backpack has shown “sincerity.” 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.
Additionally, Backpack announced it will allocate 20% of its equity to users who stake BP tokens for at least a year, offering a fixed ratio to exchange tokens for company shares. Recently, Backpack also launched an on-chain IPO share allocation feature, allowing users to directly obtain IPO shares through the platform and register on a waiting list.
However, details of the token-to-equity exchange—such as the form, rights, and schedule—remain undisclosed. This has raised community concerns that it might be a new PUA scheme: locking users first and then slowly fulfilling promises, exchanging equity to buy more time for the project.
Armani Ferrante also mentioned that the listing could happen very soon, or it might take longer, or even not happen at all. But regardless, he and the team will do their best.