Deep dive: Two brothers, 16 projects—using a single raffle machine to pull in 1,114 ETH in 8 days. Are the bettors wagering on the coin price or a scam?

Bro, you know there’s a protocol called Fake World Assets (we call it $FWA) that recently blew up. Two guys—Adam and Teto—no funding, just built an NFT raffle machine: deposit NFTs + ETH into a pool. People pay to pull them out; after winning, you can either keep the NFT, or sell it back for 85% of the deposit to the depositor, getting $ETH or $FWA tokens in return.

DefiLlama data says cumulative fees after launch were $5.98 million, TVL $5.49 million, and protocol revenue $1.45 million. At one point, 24-hour revenue exceeded Collector Crypt on Solana. The most expensive position’s deposit was 276 $ETH—winning it would let you get back 234.6 $ETH; the ticket price was up 2000x, but the odds of winning were only 1 in 66k.

As of the time of publication, the pool has 6,979 active positions, with 2,087 $ETH deposited. The protocol has accrued 1,114.1 $ETH in revenue. $FWA is $0.02, with a market cap of $20 million, and its highest point touched 38.79 million.

TokenWorks is Adam and Teto’s studio. It calls itself an “on-chain finance industrialization experiment ground.” The official site lists only three projects, but the archive page has 15 write-ups/reviews. From last October to this May, that’s an average of one every six weeks. FWA is the 16th. The most standout is PunkStrategy: a token with a 10% buy/sell tax; 80% sweeps CryptoPunks floor price, then adds 20% to list them. The profits are used to buy back and burn the tokens, and the market cap hit $300 million.

On July 28, the team said ERC20 tokens can be wrapped as NFTs and deposited into the pool; the first supported one was their own PNKSTR. The previous project was Ten Thousand Tokens—10,000 NFTs at 0.01 $ETH each. Only holders could destroy their NFT to mint a token on the platform. In the first day, it exceeded 100 mints, and the market cap touched $1 million—then it was gone. The team’s retrospective said, “I really like this idea, and it’s heartbreaking to see it fail,” the reason: not enough trading volume. But they promised that even if the platform went away, those NFTs would still live on in some form within TokenWorks.

Two months later, FWA launched. Ten Thousand Tokens became the pool’s largest collection: 2,552 positions accounting for 37.8% of share and 38.8% of winning probability. Those NFTs were minted at 0.01 $ETH; the median deposit in the pool is now 0.1 $ETH. In the whitelist there’s an unused path: destroy a certain number of Ten Thousand Tokens to add a new NFT series into the pool. The quantity is currently set to zero—meaning it’s effectively closed. Once increased, that batch of NFTs that couldn’t be moved would have a continuous place to be destroyed. The inventory from the previous failed project became the prize pool for this one.

FWA’s launch wasn’t smooth either. On July 3, the first launch: someone changed the protocol state before Chainlink’s VRF callback transaction, so the draw result pointed to the most valuable CryptoPunk in the pool, #5450 (worth $66k at the time). The Chainlink random number was fine, but before it took effect, the protocol state was tampered with. The protocol switched to withdrawals-only, and the team announced full reimbursement. On July 8 the new contract was open-sourced with a white-hat bounty; the audit was completed on the 15th, and purchases resumed on the 20th.

For depositors: the deposit is both the prize and the odds. One position equals an NFT plus a deposit of $ETH. The deposit serves three roles—buyback price, principal, and the probability that determines being selected (probability weight is inversely proportional to the deposit). The price of one raffle equals 1.1 times the harmonic mean of all deposits in the pool. The harmonic mean tends to sit near small numbers: say 9 positions each deposit 0.05 $ETH and 1 position deposits 100 $ETH. The arithmetic mean is 10 $ETH, but the harmonic mean is only 0.056 $ETH. Ticket prices track the actual draw target; they won’t be pushed too high by large deposits.

The randomness is provided by Chainlink VRF, and buyers pay a separate service fee for it. The raffle may not be successful (pool empties, ticket price drifts, or it times out without being returned), and the service fee is not refunded. Each time a depositor is charged a fee for raffling, it’s split equally among all positions. The docs specify the risk: your NFT may be selected earlier than its average lifetime, and your returns may be lower than expected.

Protocol revenue comes from three places: a 1% raffle fee; a 1% settlement fee when the buyer leaves the NFT; and when the buyer accepts the buyback, a 15% settlement discount is applied. The parameter retainedToProtocol determines whether that 15% goes to the protocol or is returned to depositors; the default is the protocol. Over eight days on-chain, 82,679 positions were created; 74,609 were drawn away; only 1,302 were actively withdrawn. The protocolFeesAccrued field is 1,114.1 $ETH—raffle fees flow 8,184.8 $ETH, with a 1% cut of 81.8 $ETH; the remaining 1,032.2 $ETH comes from settlement. The splitting contract allocates 63%, 7%, and 30% to the main recipient, secondary recipient, and the specified NFT holders.

For buyers: the expected deposit equals the harmonic mean; the ticket is priced at 1.1x, and selling back is at 0.85x. 0.85 divided by 1.1 equals 77.3%—that’s the buyer’s expected return rate. How big the pool is, what you deposit, and when the draw happens doesn’t affect that number. Pool Explorer shows: among 63,166 settled choices, 3,029 left the NFT (4.8%); 9,895 accepted buyback to take $ETH (15.7%); the remaining 50,242 (79.5%) chose accepting buyback but settled into $FWA tokens. If you choose the latter, that 85% of $ETH is used to buy $FWA on Uniswap and then given to the buyer. PunkStrategy from the same team reached a $300 million market cap, while $FWA is still in its 15-day token release period, betting that it will rise isn’t considered impulsive. The trade-off is that the accounting unit changed.

Other two cost items: raffles have a 7.7% probability of refund, and the VRF service fee is not refunded. The 10% markup inside the ticket price—who it goes to isn’t fixed: if it’s within one minute of the last raffle, it all goes to the depositor; if it’s over one hour, it fully converts into the buyer’s token purchase quota; in between it slides linearly. At that point, the buyer can get an extra 10%, lifting the expected refund to 86.3%.

The 15-day token release period expires on August 4. On July 26, the team said that by then they will open external purchases, redirect some income to buybacks—distributing 40% to depositors, 40% to buyers, and 20% to burn—while also noting that these proportions can be adjusted at the contract level. The subsidy switches from minting to buyback: how much the buyback can be depends on how many people are willing to continue raffling.

After August 4, these numbers will have to prove themselves again.

#Plasma $XPL @plasma

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