Why Is BP Suddenly Rising? Backpack Is Gaining a New Valuation Logic

TL;DR
· According to data from Crypto Briefing cited by Cowlpane, Backpack accounts for only about 5% of the supply of tokenized stocks on Solana, yet contributes about 73% of issuer-level DEX trading volume.
· The key is not the number of assets, but Backpack's proprietary automated market maker model called propAMM. These liquidity pools are funded by professional market makers, aiming to create deeper order books and tighter bid-ask spreads.
· In some statistical periods, propAMM contributed about 71% of Backpack's trading volume, indicating a clear concentration of liquidity in the tokenized stock market.
· Popular assets like SpaceX and Micron contributed a large amount of trading volume, which also means Backpack's current trading activity still relies heavily on a few flagship assets.
· Compared to ordinary crypto tokens, some tokenized stocks also offer redemption mechanisms, creating arbitrage and price anchoring between on-chain prices and underlying asset values, which may be another key factor attracting liquidity.

Tokenized stocks are rapidly moving from the narrative of "assets on-chain" to competition in more traditional market structures.

Over the past two years, the industry's focus has often been on how many stocks can be tokenized, how many companies are covered, and on which blockchains they are issued. But as products proliferate, a new question emerges: after issuance, where can they actually be traded?

Backpack's data provides a noteworthy sample.

According to data from Crypto Briefing cited by Cowlpane, Backpack Securities accounts for only about 5% of the token supply in the Solana tokenized stock market, yet handles about 73% of issuer-level DEX trading volume.

In other words, it is not the platform that issues the most assets, but it absorbs most of the trading.

What this reflects may not be token issuance capability, but a more traditional financial market issue—liquidity.

How does 5% of supply generate 73% of trading volume?

For traders, whether an asset "exists" is not the most important thing.

What truly affects the trading experience is whether the order book is deep enough, whether the bid-ask spread is tight enough, and whether a large trade will significantly move the price.

Backpack's advantage mainly comes from the Sunrise liquidity protocol and a model called propAMM (proprietary automated market maker).

Traditional DeFi AMMs typically allow any user to provide funds to liquidity pools, with algorithms quoting prices based on the asset ratios in the pool. PropAMM, on the other hand, is closer to professional market making: specific liquidity providers centrally manage funds and quotes to improve capital efficiency and provide deeper liquidity and tighter spreads as much as possible.

According to data cited in the original article, in some statistical periods, propAMM contributed about 71% of Backpack's trading volume.

This creates a typical liquidity positive feedback loop: deeper liquidity → lower slippage and trading costs → more traders enter → trading volume further concentrates → market-making efficiency continues to improve.

This is why Backpack, even with a small share of token supply, can achieve trading volume far exceeding its supply share.

This is especially important for tokenized stocks. Because stocks already have mature traditional trading markets. If the on-chain version has significantly wider spreads and significantly worse liquidity, then "going on-chain" alone is not enough to make traders migrate.

A truly competitive product ultimately still needs to solve a problem that traditional exchanges have been solving for decades: how to enable buyers and sellers to transact at the lowest possible cost.

SpaceX becomes a traffic center, but concentration is also a risk

Backpack's current trading volume is not evenly distributed across all stock tokens. The most typical is SPCX, which represents exposure to SpaceX equity.

According to data in the original article, SPCX once accounted for the vast majority of DEX trading volume among SpaceX-related tokenized assets on Solana; Micron Technology (MU) tokenized products also gained an extremely high share of trading volume among similar assets.

This shows that once a platform has both popular assets and better liquidity, trading volume can quickly concentrate in a single venue.

In particular, SpaceX is still a private company, and ordinary investors cannot directly purchase its shares through traditional public stock markets. Therefore, any product that can provide relevant economic exposure while also having strong secondary market liquidity is naturally more likely to attract attention.

But this structure has another side.

When a large amount of trading relies on a few flagship assets, the platform's overall trading volume is more susceptible to changes in the popularity of a single asset. If demand for SpaceX-related trading cools down, or other platforms launch more competitive products, the current high trading volume share may not naturally continue.

Therefore, rather than simply interpreting Backpack's current data as "explosive demand for tokenized stocks," a more accurate understanding may be: trading demand is highly concentrated in a few popular assets and a few high-liquidity venues.

Redemption mechanisms fundamentally differentiate tokenized stocks from ordinary crypto tokens

Another noteworthy design is the redemption mechanism.

Some of Backpack's tokenized stocks do not rely solely on market narratives to maintain prices, but allow holders to redeem the corresponding underlying value according to product rules. This makes them clearly different from ordinary meme coins and purely synthetic assets.

If the on-chain price of a token deviates significantly from the value of its corresponding asset, redemption and arbitrage mechanisms can theoretically prompt traders to buy undervalued assets or sell overvalued assets, thereby bringing the two prices back together.

Therefore, the redemption mechanism actually adds a layer of price anchoring to on-chain assets. For traders, this reduces the risk of "on-chain token prices completely decoupling from underlying assets"; for market makers, a clearer price benchmark also helps manage inventory and quotes.

This may also be one of the reasons Backpack can continue to attract liquidity. What tokenized stocks really need to solve is not just "turning a stock into a token," but how to simultaneously establish: underlying asset mapping, redemption mechanisms, price discovery, and secondary market liquidity. Missing any of these links makes it difficult to form a truly mature trading market.

The next stage of tokenized stocks may not be about issuance volume

From a broader market perspective, Solana has become one of the most active ecosystems for on-chain trading of tokenized stocks.

Data cited in the original article shows that in some statistical periods, Solana accounted for the vast majority of DEX trading volume for tokenized stocks across all chains. Low transaction fees and high throughput make it more suitable for on-chain securities trading that is highly sensitive to transaction costs.

But Backpack's case further illustrates that public chain performance is only infrastructure; what truly determines where trading volume ultimately flows is still market microstructure.

For issuers, this means future competition may no longer be just about "issuing a few more stock tokens." If a large number of assets lack depth after issuance, users still cannot trade effectively; in contrast, investing capital in professional market making, redemption channels, and liquidity infrastructure may bring more direct network effects.

From this perspective, Backpack's 5% supply share but 73% trading volume share is not the ratio itself that deserves attention, but the trend behind it: tokenized stocks have begun to move from the "race to put assets on-chain" to the "race for liquidity."

Whoever can provide deeper markets, lower trading friction, and more credible on-chain and off-chain price connection mechanisms may become the place where capital truly stays and trades.