An Objective Take on the Recent Backpack Issues: The KFC Thing Honestly, it was just a bad joke — nothing more to say about it. The Liquidated Users’ Deposits Disappearing This was probably the most FUD-ed part, as the Discord screenshot was widely spread. In reality, it was just a timing issue: a few users deposited funds while the exchange was still in the middle of the settlement process, before it had fully taken over the bankrupt accounts. It only affected a small number of users, and all have been fully refunded. The BTC Spot Price Deviation (The “Wick” Issue) This one is a genuine weakness of the exchange. Backpack intentionally doesn’t run an internal market maker to maintain neutrality. The problem is that when extreme volatility hits and external market makers pull liquidity, huge wicks can occur. This time, the market went through a super liquidation event — more than ten times bigger than any previous one. That’s a massive challenge for any new exchange. Backpack will likely need a more robust way to handle these rare, high-impact events — perhaps by setting up a risk fund to act as the final liquidity backstop, stepping in only when external market makers can’t stabilize the market. Running an exchange is tough. Building an entirely new specification from the ground up is a hundred times tougher — especially when most of the industry’s design conventions have already been standardized. Backpack is one of the few CEXs (if not the only one) in this cycle willing to build a new system from scratch. From that perspective, I genuinely admire @armaniferrante’s work on Backpack — though I also feel sorry for the users who got caught up in this mess.(Benson Sun)