800-fold Golden Dog: "Card Drawing" Saves NFT Trading

Last month, we detailed the on-chain TCG card narrative, noting that "pack pulling" is arguably the crypto-native "money printer" second only to Hyperliquid and pump.fun:

"CARDS Up 5x in 2 Months, Is On-Chain TCG the Next Big Narrative After HYPE?"

Last week, the "pack pulling" craze finally reached the Ethereum mainnet. A new protocol called Fake World Assets generated approximately $1.3 million in revenue just over a week after its launch, ranking 15th among crypto applications by revenue over the past seven days:

Meanwhile, the protocol's token, $FWA, surged from an initial market cap of around $47,550 to a peak of approximately $38.8 million, a massive 800x gain. In contrast, Collector Cards, while still maintaining strong revenue momentum, saw its token $CARDS drop from a high of nearly $90 million market cap a month ago to just around $28.87 million.

Why?

How FWA Works

The team behind FWA, TokenWorks, should be familiar to many. Their previous hit project was "PunkStrategy," which rocketed to a peak market cap of $300 million within a month.

However, TokenWorks doesn't always produce hits. Their previous project, TTT (Ten Thousand Tokens), launched around the mid-to-late stage of the Uniswap v4 hook craze. The gameplay was essentially a launchpad where users needed an NFT to launch a token. There were 10,000 NFTs in total, corresponding to the platform's ability to launch exactly 10,000 tokens. Fees were distributed among token creators, all NFT holders, and the protocol itself.

Because no热门标的 (hot projects) emerged, the NFT prices crashed shortly after the platform launched.

I initially missed out on FWA, dismissing it as just a simple "NFT pack-pulling" game. But it designed a token flywheel that made $FWA a Ponzi-like phenomenon.

The $FWA token cannot be bought directly on the open market. To acquire it, you must engage in "pack pulling."

The NFTs in the pool are deposited by players themselves. When depositing an NFT, players must also deposit ETH as bilateral liquidity. Essentially, each asset depositor creates their own pool.

The more ETH deposited alongside an NFT, the lower the probability of that NFT being drawn. Take the CryptoPunks below, paired with 276 ETH. Its draw probability is only 0.0000061%, meaning it would be pulled only once in over 10 million draws. Since the protocol launched on July 3rd, there have only been 73,884 draws in total, averaging a little over 3,000 per day.

It's also visible that the depositor of this CryptoPunk has earned 12.7213 ETH in just over a day. Here's how this income is generated:

- A fixed 1% fee is charged for each draw attempt.

- If a player draws an NFT they like and decides to keep it, 1% of the income generated by that NFT's depositor is deducted.

- Most players draw common NFTs and immediately sell them back to the corresponding depositor at an 85% discount. This price difference constitutes the depositor's income.

How much profit each player depositing NFTs and ETH receives doesn't depend on the amount deposited, but on how long their deposited NFT survives in the pool. If the NFT remains undrawn, the depositor continues to share in the profits. If it gets drawn, the profit-sharing stops, and they need to deposit a new NFT.

To ensure their NFT survives longer, depositors need to deposit more ETH, incentivizing deeper, thicker pools.

In summary, this system closely resembles an NFT AMM (Automated Market Maker) layered with a pack-pulling mechanism.

The FWA Flywheel

The most interesting aspect of the protocol token $FWA is that it cannot be purchased directly from external sources. To get this token, you must genuinely play the NFT gacha machine.

50% of the total token supply was used to provide initial liquidity, 30% is for emissions during the first half-month (1% daily distributed to asset depositors and 1% to pack pullers), and the remaining 20% was for early snapshot airdrops.

The most widespread way to acquire $FWA is by pulling packs. As mentioned earlier, when a player pulls an NFT they don't want, they can sell it back to the depositor at an 85% discount. Here, they can choose to receive ETH or $FWA (the protocol automatically uses the ETH from the buyback to purchase $FWA).

The majority of players choose to take $FWA when selling back unwanted NFTs. Data shows that over the past seven days, up to 82.3% of operations involved selling back immediately for $FWA, especially in the earliest days before the token price took off. In recent days, as the $FWA price has risen to highs and entered a correction, the choice to take ETH after an immediate sell-back has gradually increased, but choosing $FWA still accounts for over 60% of daily operations.

If we directly calculate the cost of acquiring $FWA, we find that each individual draw has negative expected value. In fact, the cost of obtaining $FWA through a draw is consistently higher than the prevailing $FWA market price on that day, meaning it's a premium purchase.

However, if a player holds onto the $FWA instead of selling it immediately, the period from July 20th to 23rd turned each $FWA-converting draw into a money-printing machine. This isn't too different from enduring the wear and tear of offers to farm Blur airdrops back in the day. In both cases, you're betting on the token's future appreciation, trading time for potential gains. But there's a key difference: this is a game with a much shorter博弈周期 (speculation cycle) primarily driven by attention. If the mechanism is quickly discovered and becomes a focal point of attention, every new player joining to pull packs creates substantial buy pressure for $FWA. Latecomers constantly push up the portfolio value of those who held $FWA from earlier.

This is precisely why FWA's token market cap surpassed Collector Cards' in such a short time. Both core gameplays involve pack pulling, and their core revenue comes from immediate buybacks at discounted prices. In fact, Collector Cards' content (Pokémon cards) arguably appeals to a broader audience than NFTs and has better profit margins. However, the utility of Collector Cards' token has been widely criticized by the community. Aside from project buybacks (details of which were delayed due to the Clarity Act's failure to pass), the token has almost zero utility.

Even pump.fun's massive daily buybacks weren't fully recognized by the market, so it's no surprise that Collector Cards, with its significantly smaller buyback scale, struggles for recognition.

Conclusion

It's highly likely that FWA's flywheel will be difficult to sustain long-term. When the token price is rising, everyone rushes in to pull packs, praising the grand innovation that saved NFTs. But once the price drops and the losses from pack pulling can no longer be covered—or even generate excess returns—by $FWA's continuous appreciation, the protocol will gradually fade from memory, and the "great NFT renaissance" will abruptly end.

The more valuable lesson we can draw here is that profitability is a narrative easily forgotten in the crypto market. By understanding the relationship between attention and buy-side conversion, we might be able to avoid getting caught holding the bag at the top.