A cryptic post from blockchain investigator ZachXBT triggered a surge of betting activity on Polymarket, with more than $2.2 million traded on a market asking which crypto company he will expose in an upcoming insider-trading investigation.

ZachXBT wrote on X that a “major investigation” will be released on February 26 into one of crypto’s most profitable businesses, alleging insider trading. He did not name the company.

Within hours, traders piled into prediction bets. Polymarket shows Meteora leading the odds, followed by MEXC, Pump.fun, and World Liberty Financial (WLFI). 

Why Polymarket Traders are Betting on Meteora and MEXC

Meteora has drawn heavy attention because of its role as a Solana-based trading infrastructure tied to high-volume meme coin liquidity.

It has also faced scrutiny in community discussions around politically linked meme coin activity, including Trump-related tokens.

MEXC appears on the list because it has repeatedly been mentioned in social media debates around listing behavior, whale activity, and alleged insider-style trading patterns in meme coin markets.

That does not prove wrongdoing, but it helps explain why bettors quickly priced it as a candidate.

Pump.fun and Whale Scrutiny Keep It in the Frame

Pump.fun also drew bets because it sits at the center of the meme coin launch economy. 

The platform has been under intense community scrutiny over early-wallet activity, sniping, and whether some participants gained unfair advantages during launches.

Separately, recent online discussion has focused on claims that Hayden Davis may have been an early whale in the PUMP token launch. 

However, Pump.Fun later refuted those claims, calling them baseless. 

Those claims remain part of broader market speculation unless backed by direct evidence or formal findings.

World Liberty Financial Added after USD1 Depeg Scare

WLFI likely entered the betting conversation after USD1 briefly depegged earlier on February 23 before recovering. 

WLFI blamed a coordinated attack, saying hackers compromised cofounder accounts, spread fear, and opened short positions.

That episode, plus fresh rumor cycles around WLFI and politically linked crypto projects, appears to have pushed the company onto traders’ radar. 

For now, the Polymarket market reflects sentiment and speculation, not confirmation of ZachXBT’s target.

Backpack Exchange on Monday unveiled a novel incentive for its upcoming Backpack token: committed stakers of at least 12 months can swap tokens for equity in the exchange at a fixed ratio—20% of the company today. CEO Armani Ferrante disclosed the plan in a post on X, signaling a shift toward a token structure designed to emphasize long-term commitment rather than speculative utility. The move aligns with Backpack’s broader strategy as it eyes a potential United States IPO, and ties token unlocks to regulatory milestones, product launches, and other milestones that could unlock the rest of the supply for early backers and the team.

Key takeaways

• Long-term staking converts into equity: users who hold Backpack tokens for at least one year may exchange their stake for equity representing 20% of the company today.
• Structured token unlocks tied to milestones: the supply is 1 million tokens, with 25% unlocked at the Token Generation Event (TGE) and 62.5% slated for distribution to users ahead of the IPO, while the remaining 37.5% would unlock post-IPO for the team and investors.
• Tokenomics aimed at reducing sell pressure: Backpack emphasizes an inverted model that prioritizes user ownership and alignment with long-term growth rather than insider-first allocations.
• Foundational critique of centralized promises: Ferrante argues that many past token launches offered “false promises” of utility, and positions this plan as a more accountable approach to token utility.
• Regulatory and product milestones drive progress: the plan is designed to keep token unlocks in step with regulatory approvals and the rollout of new products, including recent on-chain stock tokenization efforts.

Tickers mentioned:

Sentiment: Neutral

Market context: The move arrives amid broader industry experimentation with tokenized equity and milestone-based token unlocks as projects edge toward traditional financing routes, including potential IPOs, while navigating an evolving regulatory landscape.

Why it matters

The Backpack project is venturing beyond the conventional token model by tying a portion of its equity directly to user participation. By offering an equity exchange for token staking, the company is attempting to fuse governance, financial upside, and product loyalty into a single instrument. If successful, this approach could recalibrate how users perceive token utility, moving away from short-lived hype cycles toward genuine ownership stakes in a platform’s growth trajectory.

Ferrante has positioned the plan as a corrective to perceived excesses in the crypto boom-and-bust era. In a bold assertion, he described a crypto landscape that has become “the most centralized” in its history, where “the more centralized something is, the less meaningful a token is.” The strategy, he suggests, aims to counterbalance that trend by anchoring token value to company equity and tying unlocks to milestones rather than speculative trading alone. While the message leans toward a principled stance on token design, it also acknowledges the practical need to maintain a viable path to decentralization as the product matures.

The proposed structure signals a broader industry shift: tokenized equity as a pathway for user incentivization and as a bridge to potential public-market access. Backpack’s approach would anchor a significant portion of the token supply to user-driven value creation, a model that could influence how future crypto platforms think about long-term incentives and governance. However, the roadmap remains conditional on regulatory approvals and the successful execution of product milestones, which adds a layer of risk for token holders and early backers alike.

Backpack’s emphasis on preventing early insider dominance also speaks to a growing insistence on fairness and sustainability in token distribution. The plan to allocate a substantial share of tokens to users before an IPO, with insiders and investors receiving allocations later, is designed to reduce immediate sell pressure and foster a longer horizon for value realization. If the strategy resonates with the market, it could encourage a more patient, utility-driven participation from both retail and professional users.

“I came into crypto because I believe it’s going to change the world … But somewhere along the way, amidst the booms, the busts, the moonshots, the decentralization theater, and the straight up scams, we lost our way. I don’t know about you, but I’m just tired of false promises.”

Backpack’s tokenomics also dovetail with its broader business moves. The company has previously announced plans to unlock tokens in stages as part of a path toward a potential US IPO, and it has pursued on-chain stock tokenization through a partnership with a registered transfer agent. The token distribution plan underscores a concerted effort to align incentives with the company’s regulatory and product milestones, rather than relying solely on passive liquidity or speculative drivers.

What to watch next

• Timing and criteria for the Token Generation Event, including the 25% unlock and the milestone-based releases before the IPO.
• Progress toward regulatory approvals and the practical milestones that unlock the remaining supply.
• Details surrounding the equity-exchange mechanism for stake-holders and how the fixed ratio will be applied in practice.
• Status of the on-chain tokenization of stocks and any regulatory considerations that accompany that initiative.
• Any updates about the company’s IPO journey and how token liquidity will evolve post-IPO.

Sources & verification

• Backpack CEO Armani Ferrante’s X post announcing the 20% equity offer for year-long token staking.
• Cointelegraph report outlining Backpack’s token unlocks tied to IPO ambitions and the initial 25%/62.5%/37.5% schedule.
• Backpack tokenomics overview detailing the supply and milestone-based unlocks.
• Announcement of the partnership with Superstate to bring tokenized stocks on-chain.
• Background on Backpack’s leadership and prior ventures related to the crypto landscape.

What the article means for investors and users

Backpack’s approach narrows the gap between a conventional equity stake and a crypto token by offering actual equity in exchange for token staking. If realized, it would create an explicit counterweight to the typical risk-reward profile of early-stage exchanges that often rely on mere token liquidity rather than tangible ownership or governance influence. For users, it could translate into more meaningful participation in a platform’s success, turning long-term commitment into a measurable stake in the company’s outcomes.

From a market perspective, the plan contributes to a broader discussion about how to align incentives as crypto platforms transition toward regulated milestones. While it introduces potential benefits, it also raises questions about valuation, governance rights, and the practical mechanics of converting tokens into equity—issues that regulators will scrutinize as the project progresses toward an IPO.

What to watch next

• Whether the Token Generation Event occurs on a defined timeline and how milestones influence ongoing unlocks.
• Regulatory developments in the US that could impact both the token structure and the eventual IPO process.
• Operational readiness to support tokenized equity and the technology to ensure secure, auditable exchanges between tokens and equity.

Backpack’s equity-for-stake plan: a closer look at the tokenomics

The essence of Backpack’s model is to anchor token value to real company equity, a move that could reshape incentives in the crypto exchange space. By design, the first 62.5% of tokens are slated for user distribution ahead of the IPO, with the remaining 37.5% reserved for insiders and investors post-IPO. The 25% at the Token Generation Event acts as a foundation for early adoption, while milestone unlocks before the IPO encourage continued product development and regulatory alignment. The structure aims to avoid the insider-dominant dynamics that can accelerate sell pressure and erode retail confidence in a token’s long-term viability.

Critically, the plan reflects a broader push in crypto to demonstrate tangible value beyond hype. Ferrante’s comments about centralized trends and false promises point to a deliberate attempt to combine utility with governance and economic upside. Whether this model gains traction depends on execution—timely regulatory clarity, robust product milestones, and transparent reporting to token-holders about how equity allocations translate into real-world ownership and voting rights. As Backpack proceeds, observers will be watching how the equity outcomes interact with on-chain capabilities and the pace at which decentralization goals are realized after the IPO.

In the near term, users will be assessing the practical mechanics of staking, the fixed equity ratio, and how liquid the equity component will be in a pre-IPO environment. It remains to be seen how this approach will interact with the broader market sentiment around new token launches and the appetite for long-horizon bets tied to traditional corporate milestones. The alignment of token unlocks with regulatory milestones could, if successful, serve as a blueprint for future tokenized equity initiatives within crypto exchanges and beyond.

Backpack’s token-to-equity plan signals a shift in crypto tokenomics and IPO ambitions

Arthur Hayes outlines hard-asset portfolio, mixing commodity equities, BTC, ETH, ZEC, HYPE and physical gold.

BitMEX co-founder Arthur Hayes disclosed details of his investment portfolio, revealing holdings that span commodity-linked equities, cryptocurrencies, and physical gold, according to a statement shared by Hayes.

The portfolio includes positions in gold, silver, and copper mining companies; uranium mining firms; major oil producers; defense-related stocks; and Latin American energy companies, Hayes stated. The equity allocation focuses on commodity producers and sectors associated with inflationary environments, geopolitical developments, and energy supply dynamics.

In digital assets, Hayes reported holdings in bitcoin, ethereum, Zcash, and HYPE. The cryptocurrency allocation includes large-capitalization assets as well as smaller-cap positions, according to the disclosure.

Hayes also confirmed ownership of physical gold, adding tangible asset exposure to the portfolio alongside digital and equity holdings.

The allocation represents a combination of commodity and energy equities on one side and cryptocurrency assets on the other, with physical gold serving as an additional component. The structure indicates diversification beyond digital assets into traditional commodity-related investments.

Hayes encouraged others to share their investment positions, characterizing the disclosure as a contribution to broader market discussion rather than investment advice, according to his statement.

BitMEX, a cryptocurrency derivatives exchange, was co-founded by Hayes in 2014. The platform has been among the most prominent venues for bitcoin derivatives trading.

Step Finance and SolanaFloor, two early Solana ecosystem platforms, have announced they are shutting down operations effective immediately after the treasury hack that hit Step Finance at the end of January.

Step Finance said it explored financing and acquisition options after the breach but could not secure a viable path forward. 

A Tragic End to Solana’s Early Ecosystem Platforms

The shutdown also includes Remora Markets, another Step-linked platform. 

Step said it is working on a buyback for STEP holders using a pre-incident snapshot and a redemption process for Remora rToken holders, adding that Remora tokens remain backed 1:1.

Meanwhile, SolanaFloor said it will stop publishing new content but keep its existing website, videos, and newsletters online as an archive. 

The media outlet said it tried to continue operating after the events affecting its parent company, Step Finance, but could not find a sustainable route.

The closures follow a major hack disclosed in late January that drained Step Finance’s treasury and triggered a sharp loss of confidence. 

The attack reportedly compromised devices linked to executives, giving attackers access to treasury wallets and leading to a multimillion-dollar loss in SOL.

That breach was a fatal blow because Step Finance depended on treasury resources to support operations and ecosystem expansion. 

After the hack, STEP token value collapsed, and the company faced mounting pressure to stabilize finances while maintaining multiple products.

Step Finance was one of Solana’s original DeFi infrastructure names. It built a widely used portfolio dashboard that helped users track wallets, yield positions, LPs, and broader on-chain activity across Solana in one place. 

For many users during Solana’s growth years, Step served as a core utility layer.

SolanaFloor played a different but equally important role. It became one of the most visible Solana-focused media and analytics platforms, covering ecosystem launches, market trends, NFTs, DeFi, and project updates. 

Together, the shutdowns mark the loss of two long-standing Solana brands.

TLDR

• Crypto funds recorded $288 million in net outflows last week, extending a five-week streak to $4 billion.
• Bitcoin led the losses with $215 million in outflows, while short-Bitcoin products attracted $5.5 million in inflows.
• The United States accounted for $347 million in withdrawals, while Europe and Canada posted combined inflows of $59 million.
• Trading volumes dropped to $17 billion, marking the lowest weekly level since July 2025.
• Ethereum, multi-asset products, and Tron also saw outflows, while XRP, Solana, and Chainlink recorded minor inflows.

Crypto investment products extended their losing run to five consecutive weeks as investors withdrew billions from the sector. CoinShares reported $288 million in net outflows last week, which pushed the total to about $4 billion over five weeks. Trading volumes also fell sharply, which reflected reduced market participation even as prices steadied.

Bitcoin Leads Outflows as Crypto Funds Face Pressure

Bitcoin recorded $215 million in outflows last week, which accounted for most of the weekly losses. This selling trend continued from previous weeks and kept pressure on overall crypto funds.

At the same time, short-Bitcoin products attracted $5.5 million in inflows, which marked the highest inflow among tracked assets. This shift showed that some traders positioned for further downside as Bitcoin remained rangebound.

Data also showed that Bitcoin traders increased leverage during the recent consolidation phase. Bitcoin represented over 40% of the $500 million in liquidations recorded on Monday.

Ethereum followed with $36.5 million in outflows during the same period. Multi-asset products and Tron also posted losses, with $32.5 million and $18.9 million withdrawn, respectively.

Meanwhile, select altcoins posted minor gains despite broader weakness across crypto funds. XRP added $3.5 million, while Solana and Chainlink drew $3.3 million and $1.2 million.

Regional Flows Show Diverging Investor Behavior

The United States led regional outflows with $347 million withdrawn from digital asset products. In contrast, Europe and Canada recorded combined inflows of $59 million during the week.

Switzerland led European inflows with $19.5 million added to crypto investment products. Canada and Germany followed with inflows of $16.8 million and $16.2 million.

This pattern matched recent regional trends reported in earlier market updates. European investors continued to buy during price weakness, while U.S. investors reduced exposure.

Trading volumes across digital asset products dropped to $17 billion last week. This figure marked the lowest weekly level since July 2025.

Tim Sun, senior researcher at HashKey Group, addressed the broader market stance in earlier comments. He said crypto assets remain “firmly anchored at the far end of the risk curve.”

Sun also stated that “increased uncertainty has dampened the willingness of ‘sidelined’ capital to enter the market.” He added that without sustained liquidity support, “any periodic bounces are more likely to be technical recoveries rather than trend reversals.”

Cross-chain bridges are the quiet workhorses of crypto. They move capital from one ecosystem to another, chasing higher APYs, better incentives, and fresh narrative momentum. But while most traders focus on yield percentages, the real game is understanding the risk layer beneath the bridge.

Because in DeFi, yield doesn’t just come from opportunity.
It often comes from risk mispricing.

Let’s break it down.

The Real Reason People Bridge

Nobody bridges for fun. They bridge for:

• Higher farming incentives on new chains

• Token emissions boosted by liquidity mining

• Early-stage protocols with outsized rewards

• Arbitrage between liquidity pools

• Governance token airdrop positioning

Capital flows where rewards are highest. When liquidity is thin and incentives are strong, early movers capture disproportionate upside.

That’s the alpha.

But the bridge itself? That’s the blind spot.

The Hidden Risk Layer

Bridging introduces a stacked risk model that most yield farmers underestimate:

1. Smart Contract Risk

Bridges are some of the most complex contracts in crypto. They lock assets on one chain and mint representations on another. Complexity increases attack surface.

History has shown that bridges are prime targets for exploits. Billions have been lost across multiple incidents.

2. Custodial & Validator Risk

Some bridges rely on multisigs or validator sets. If governance is weak or keys are compromised, assets can vanish.

If you don’t know who controls the bridge, you don’t know your real counterparty.

3. Liquidity & Redemption Risk

Bridged assets are often synthetic representations. If liquidity dries up or redemption mechanisms fail, your “stable” asset may not be so stable.

In extreme conditions, bridged tokens can depeg from their native counterparts.

4. Chain-Level Risk

Bridging into a newer chain often means lower security assumptions. Fewer validators, lower economic security, and less battle testing.

High APY sometimes equals high fragility.

Why Yield Exists in the First Place

Here’s the uncomfortable truth:

If a chain is offering 30%+ stablecoin yields, it’s rarely because they love you.

It’s because:

• They need liquidity.

• They are bootstrapping an ecosystem.

• They are compensating you for security uncertainty.

• They are emitting inflationary rewards.

Yield is a risk payment. The question is whether that risk is priced correctly.

Where the Hidden Alpha Lives

Now here’s where things get interesting.

The best capital allocators don’t avoid bridge risk entirely. They understand it better than the crowd.

Hidden alpha appears when:

1. Incentives Outpace Perceived Risk

If the market overestimates bridge danger relative to actual security posture, rewards can outweigh downside probability.

This happens especially after a bridge improves audits, decentralizes validators, or hardens architecture—but sentiment hasn’t caught up.

2. Liquidity Migration Cycles

Early capital into emerging chains captures boosted emissions before APY compresses.

Bridging early (but intelligently) often yields exponential returns relative to late entrants.

3. Arbitrage Between Trust Assumptions

Not all bridges are equal. Some are fully trust-minimized. Others are closer to custodial wrappers.

Understanding architectural differences creates opportunity when markets price them similarly.

Knowledge asymmetry = alpha.

Practical Risk Framework Before You Bridge

Before chasing that juicy APY, ask:

• Who secures this bridge?

• Has it been audited? By whom?

• How decentralized is the validator set?

• What’s the total value locked relative to the security model?

• What happens if redemption fails?

• Can I exit quickly under stress?

If you can’t answer those, you’re not yield farming.
You’re gambling.

Strategic Approach to Bridging for Yield

Instead of going all-in:

• Size positions based on bridge trust assumptions.

• Diversify across multiple bridging solutions.

• Avoid compounding unrealized bridge risk.

• Monitor liquidity depth for exit pathways.

• Treat bridged assets as risk-tiered, not equivalent to native assets.

Professional capital allocators don’t chase APY blindly.
They price systemic exposure.

Final Thought

Bridging is neither inherently reckless nor inherently brilliant.

It’s a tool.

For the uninformed, it amplifies the downside.
For the informed, it amplifies opportunity.

Yield is rarely “free.”
But when you understand the structural risk beneath the bridge, you stop being the liquidity… and start extracting it.

That’s where the hidden alpha lives.

Bitcoin (BTC) slid to a weekly low of $64,111 during the New York trading session on Monday, taking out the range lows that were initially set on Sunday evening. Despite the weakness, the price action continues to rotate closely within the three-week range between $65,000 and $71,000.

Derivatives data outlines a clear lack of bearish follow-through for a deeper correction, while the liquidity positioning may frame the next move on the opposite side of the current trading range.

Bitcoin traders may target the upside liquidity next

The recent price drop swept liquidity around $64,000 and liquidated roughly $240 million in long positions. Despite the sell-off, Bitcoin has remained within the established range that has been in place since Feb. 6. A sideways trend often builds pressure for an expansion, especially as the volatility compresses.

The Bollinger Bands have tightened, signaling reduced volatility and the potential for an expansive move.

The liquidity data shows a clear asymmetry. Roughly $1 billion in long positions face liquidation if the price tags $63,000. In contrast, more than $3.5 billion in short positions are vulnerable near a $70,000 retest. This creates a visible liquidity magnet on both ends of the range, though the concentration is notably denser on the upside.

Bitcoin open interest, which tracks the total value of outstanding futures contracts, has flattened near the local lows. Traders are not aggressively adding new exposure after the drop, possibly sidelined at the moment.

The funding rates have turned negative on the four-hour chart, meaning that the short sellers are paying the longs. This shift indicates that the positioning has tilted defensively while the price continues to hold the range support, opening the possibility of a short squeeze if the upside liquidity is targeted.

Trader Lennaert Snyder noted that Bitcoin “finally grabbed the $64,500 liquidity,” adding that reclaiming the $67,751 high may open the door toward $76,971, with partial profit targets along the way. A rejection near that level invites short-term downside toward the range lows.

Related: Bitcoin treasuries log rare selling streak as BTC trades near $66K

BTC may tag $63,000 before recovery

The one-hour chart highlights the order block around $63,000, a zone where the large buyers previously stepped in. The order blocks mark areas of concentrated activity and can act as an inflection point on retests.

A brief sweep into the $63,000 region clears the remaining long liquidity and tests that demand zone. If the buyers defend it, the price may rotate back toward the mid-range and potentially the $70,000 resistance cluster.

Meanwhile, TexasWest Capital founder Christopher Inks pointed to the developing bullish relative strength index (RSI) divergence on the daily chart, alongside the rising volume and a wick below the range support.

A positive daily close above the reclaimed level may strengthen the case for another attempt at the range highs.

Related: Bitcoin traders diverge over BTC price strength with $60K in sight