800x “Big Golden Dog” — “Gacha” saves NFT trading

By: Cookie, Odaily

Last month, we covered the on-chain TCG card narrative in detail—“gacha pulls” are now nearly the next-best “crypto-native money printer” after Hyperliquid and pump.fun:

“Cards surge 5x in two months—are on-chain TCG cards another major narrative after HYPE?”

And last week, the wind of “gacha” finally blew onto the Ethereum mainnet. A new protocol called Fake World Assets (FWA), launched just over a week ago, has already generated around $1.3 million in revenue, ranking 15th on the past 7 days’ list of crypto app revenues:

At the same time, the protocol token $FWA also jumped from an initial opening market cap of about $47,550 to a peak of roughly $38.8 million, a 800x “big dog” gain. Meanwhile, while Collector Cards has still maintained strong revenue momentum, its token $CARDS has fallen from a month-ago peak near $90 million market cap all the way down to only about $28.87 million.

Why?

###’s FWA gameplay

The team behind FWA—TokenWorks—won’t be unfamiliar to everyone. The team’s previous top performer was PunkStrategy, “punk strategy,” which hit a peak market cap of $300 million in one month.

But TokenWorks doesn’t always launch top performers. Its previous project TTT (Ten Thousand Tokens) came out roughly in the late-middle phase of the Uniswap v4 hook hype. The basic玩法 was a Launchpad where you could only issue tokens on top if you had an NFT. The total NFT supply was 10,000, corresponding to only 10,000 tokens that could be issued on that platform. Fees were distributed among the token issuer, all NFT holders, and the protocol.

Because it didn’t catch a hot target, the NFTs dumped shortly after the platform went live.

This time, I also missed FWA at first, thinking it was just a simple “NFT gacha”玩法. But it has a token flywheel design that lets $FWA run a Ponzi-like cycle.

$FWA can’t be bought directly from outside. To get the coin, you must “pull cards.”

The NFTs in the pool are deposited voluntarily by players. When depositing an NFT, players must also deposit ETH as bilateral liquidity. In other words, each depositing player effectively opens their own pool.

The more ETH you deposit, the lower the probability your paired NFT will be selected. Taking CryptoPunks as an example, there are 276 CryptoPunks paired ETH, and the probability of selection is only 0.0000061%—meaning it would take more than 10 million pulls just to have a chance to be selected. Meanwhile, since the protocol started running on July 3, there have been a total of 73,884 draws. That’s an average of a little over 3,000 times per day.

At the same time, you can also see that the depositor of these CryptoPunks has already earned 12.7213 ETH in over a day. Where does this income come from:

• Each time someone pulls, a fixed 1% fee is taken

• If someone pulls an NFT they want and chooses to keep it, another 1% of the revenue generated from that depositor’s NFT-holder earnings is taken

• Most NFTs pulled are “ordinary” NFTs, which are immediately sold back to the corresponding depositor at an 85% discount; this price difference forms the income

As for how much each player who deposits NFTs and ETH into the protocol can get, it doesn’t depend on the amount of assets deposited, but on how long the deposited NFT stays alive in the pool—if the deposited NFT is not drawn, the player can keep sharing profits. If it gets drawn, the dividend ends, and you need to deposit new NFTs.

And to ensure you keep your NFT alive long enough in the pool, you need to deposit more ETH—this incentivizes the pool to become thicker and thicker.

With that, we can give a clear summary: this thing is essentially an NFT AMM stacked with a gacha mechanism.

###’s flywheel

The most interesting part of the protocol token $FWA is that it can’t be bought directly from outside. If you want it, you have to genuinely play this NFT gacha machine.

50% of the total token supply is used to add initial liquidity. 30% is used for emissions during the first half-month after launch (each day, 1% goes to both the asset depositor and the gacha player), and the remaining 20% is distributed as early snapshot airdrops.

The most common way to acquire $FWA is to gacha—and as we mentioned earlier, when you pull an NFT you don’t want, you can sell it back to the NFT depositor at an 85% discounted rate. At that point, you can either choose to take back the ETH, or choose to receive $FWA (the protocol automatically uses the returned ETH portion to buy $FWA).

Most players choose to do this operation: after selling back the unwanted NFT, they receive $FWA . Data shows that over the past 7 days, the highest share of actions—82.3% at one point—was choosing to sell back immediately after the draw to obtain $FWA, especially when the token price had not yet started moving upward in the earliest stage. In recent days, as $FWA ’s price rose to its peak and entered a correction, the share of choosing to get ETH after immediate sell-backs has been gradually increasing—but the choice to get $FWA still accounts for more than 60% of daily activity.

If we directly convert $FWA acquisition costs, we’ll find that actually each gacha pull has negative expected value. The cost of getting $FWA through gacha is higher than that day’s $FWA price—it’s essentially a premium-priced buy.

But if you don’t sell immediately after getting $FWA and instead choose to hold, then during July 20–23, each draw-to-$FWA conversion was like疯狂印钞. In fact, it’s not that different from the old days of rushing through Offer-wear to刷 Blur airdrops—it’s all about betting that the subsequent tokens will take off, using time to bet on upside space. But there is also some difference: this is effectively a much shorter game cycle compared to those events, and it mostly bets on attention. If this mechanism is discovered quickly and becomes the attention focus, then as long as incremental users come in to gacha, a large amount of $FWA buy pressure will convert. People who come later will continuously push up the position value of those holding $FWA earlier.

That’s also why FWA was able to surpass Collector Cards’ token market cap in an extremely short time. Both projects’ core gameplay is gacha, and both’ core revenue comes from the immediate repurchase discount spread. Even Collector Cards’ gacha content (Pokemon cards) has a broader audience than NFTs and shows better profit performance. But Collector Cards’ token utility has been widely criticized by the community. Besides the project team’s buyback (and also because the Clarity Act wasn’t passed, so they haven’t disclosed concrete details for a long time), the Collector Cards token is basically 0 utility.

If even pump.fun’s huge daily buybacks still wasn’t recognized by the market, then Collector Cards—whose buyback strength is much weaker—really has no chance.

Conclusion

This kind of flywheel for FWA likely can’t be sustained long-term. When the token price is rising, everyone rushes in to gacha and praises this great innovation that “saved NFTs.” But once the price falls, the losses from gacha itself can’t be covered—let alone create excess returns—by the continued rise in $FWA . At that point, the protocol will gradually be forgotten, and the “great NFT revival” will come to an end.

But the more valuable lesson we can take from this is that narratives about profitability in crypto markets are very easy to forget. If we understand it through the relationship between attention and buy-pressure conversion, maybe we can avoid many cases of people getting trapped buying at the top.