TechFlow news, April 10 — In response to the intense market volatility over the past week, Backpack CEO Armani Ferrante took to Twitter to detail Backpack's unique transparent risk engine and shared data highlighting its strong performance during market fluctuations.
The tweet first used the FTX collapse as a case study to emphasize the importance of building a robust and transparent risk management system. It highlighted that Backpack does not operate its own market-making activities, eliminating any incentive to liquidate users' positions or act against user interests.
Armani then detailed Backpack's three-stage liquidation mechanism: 1. Order book liquidation; 2. Backup mechanism liquidation; 3. Auto-deleveraging liquidation. Additionally, Backpack employs measures such as staggered liquidations and price impact bands to reduce market impact, protect users from unfair liquidations, and further enhance the fairness and user-friendliness of the liquidation process.
Moreover, Armani shared data demonstrating Backpack's strong resilience during market swings: during this week's historic volatility, 99.82% of liquidations on Backpack were executed directly on the order book—allowing all market participants equal opportunity to engage—while only 0.18% occurred via the backup mechanism and 0% through auto-deleveraging.
