Bankless - FWA and the New Market Structure for NFTs | Adam (Rhynotic) and Eric Conner

Episode Date: September 3, 2026

What if the answer to NFT liquidity looked more like opening a Pokémon pack than trading on a traditional marketplace? FWA creator Adam “Rhynotic” joins David Hoffman and Eric Conner to unpack Fake World Assets, an Ethereum protocol combining random NFT pulls, ETH-backed liquidity and permissionless market infrastructure. They explore why FWA has made NFTs fun again, how its unusual pricing and buyback mechanics work, the FWA token, custom pools and FWAR's new approach to NFT launches. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔓NEAR | TRADE CONFIDENTIALLY, GET 20% BACK https://bankless.cc/near2026 🔑BITKEY | GET 10% OFF USE CODE: BANKLESS | #bitkeypartner https://bankless.cc/bitkey 🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless 👑BANKLESS CONTENT MCP https://www.bankless.com/premium --- TIMESTAMPS 0:00 What Is Fake World Assets? 1:38 Making NFTs Fun Again 3:55 How the FWA Pool Works 8:42 Why Eric Is Bullish on FWA 13:20 A Liquidity Layer for NFTs 16:00 From NFTs to Real-World Assets 20:13 Pricing, Buybacks and Incentives 28:36 Custom Pools and New NFT Markets 31:57 The FWA Token 39:06 FWAR and a New Way to Launch NFTs 48:47 What Comes Next for FWA 50:12 Multichain FWA and the Bigger Vision 54:46 Closing Thoughts --- RESOURCES Adam (Rhynotic) https://x.com/Rhynotic Eric Conner https://x.com/econoar --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bankless station, I'm here with Adam. He goes by Rynotic on Twitter. He's a creator of FWA. That's fake world assets on Ethereum. Adam, welcome to the show. Awesome. Thank you for having me. I'm excited down. And I'm bringing him out of retirement.

We also got Eric Connor. Eric has been a while. Good to have you back, my man. Hey, David. Good to be back. It's been too long. Eric, I'm tapping you in on this conversation because I know that you are a FWA enthusiast,

so I think it would be pretty cool to have you on the show here. Also, energy is up in the crypto markets. So we're doing more conversations. Adam, tell me about fake world assets. Yeah. So for anyone who's listening doesn't know, it is a NFT purchasing protocol where basically there is a pool of assets

that are priced by the depositors and they are backed by a sort of amount of ETH. And then anyone can come in and purchase something randomly from the pool. And if they like it, they can keep it. If they don't like it, they can sell it back into 80, I think it's 90% of the depositors bid. and it's permissionless, decentralized,

will go on forever. There's some parameters I can change, but the goal is to try to get his hands off as possible. The random numbers are pulled by chain link. It's kind of standard for anyone who's listening, but it's great. It's been going for about a month, month and a half, and I work at TokenWorks.

TokenWorks is a on-chain financialized studio where we make a product a month, Although when a project takes off like this one, we kind of run with it and work on it as long as it feasibly makes sense. And so it's kind of where we are now. Talk to me just about the broad philosophy, about why you think FWA is cool, why it has legs,

why it's captivated people's attention, why it's been successful. Like what's the overall idea? Yeah, I mean, I think people love NFTs. I know it's kind of a hot topic. Some people and you hate them, but I've been an NFT maxi for years. It's the main thing like,

keeps me interested. And so collectibles, we've seen Pokemon cards, especially in the last couple years with, like, Labibu's and whatnot. Like people like getting a random asset. Like you like getting something. But that just kind of makes sense. And digital assets make more sense than that. Like a lot of these sites, like collector crypt, BZ, courtyard, they're great.

Teams are awesome, huge inspiration. But at the end, you kind of end up with this physical asset that if you want to get it delivered. It takes two weeks and it's authenticated and kind of all of these things are solved by NFTs. And so like if there's digital assets that you want to keep, it kind of makes sense to have it in this form. And some people are saying it's kind of the evolution of like an open sea type marketplace. We'll see it's kind of still a little early to tell. Regardless, it's been really successful and fun and people really enjoy it. So the consumer behavior that we're going for is like the whole gotcha thing. So you buy a Pokemon card pack.

you get a handful of Pokemon's cards. One of them is valuable. Sometimes one of them is very, very valuable. And that's kind of like the dopamine hit that people come back for. We're kind of replicating that consumer behavior with FWA. So you come to FWA and you like buy like a pack or is it you just buy one NFT? You can buy multiple. Sure.

But then like you don't really know what you get. And that's kind of the fun. That's the fun speculative gaming aspect to it. Yes. And there are a lot of restrictions and, you know, because it's fully on chain. So we use like, it's called a Fenwick tree to like keep track of all of the positions and the odds of what you're going to get. And so we are kind of restricted in that sense. And that was kind of part of the fun of building it is like what can, how do we like work with these constraints to make something that people enjoy and still works?

It's kind of resulting in what we have now. Can we just like pop open the hood just to understand this a little bit better about like how does an NFT come into the FWA system. ETH also needs to come into the FWA system. Not all of these NFTs are valued equally. Some are valued more than others. Like some are incredibly valued. How does the system, how does just like mechanically, how does all of that work?

Yeah. So I mean, part of my inspiration was like a uniswad V2 pool. And so for people who don't know what that is, like when you add liquidity to a uniswap V2 pool, you have to basically say, I have this amount of asset and I have this. this amount of eth, and we're going to deposit and get LP tokens. And so you're kind of setting the value there. And then obviously, if, you know, if your asset rips, there's like a permanent loss, and if eats goes up, you made more, whatever.

So kind of setting the price by backing just made a ton of sense for me. And it's also part of that constraints that I mentioned earlier. Like, we don't really know the prices of these NFTs, so we don't know the price of a board ape or a punk or a 10,000 tokens, NFT. and that's because a lot of these marketplaces aren't on chain and so there's no way to query OpenC easily and be like what's the price of this? There are some options.

There's like NFTX that it's like fractionalizing it. We could try to get a price, but for the most start, we don't know the price of these. And so it makes sense for someone to say, this is the price. And to prove that, I'm going to back it by that amount of money.

And so that's kind of both a constraint and has turned into like a feature. And a big thing of these kind of a Pokemon on card sites like collector crypt is this buyback and so they are willing to buy it back for a certain amount and i think that also incentivizes people to participate because they know no matter what they don't have to ship it they don't have to get it delivered they can just take back the money and they still kind of um even if they don't like the card and so it's uh user behavior but what is the incentive for somebody with an nfti to come and seed the asset base in the first place like why i've got an

NFT, why would I take it to FWA? And to be clear, like, a lot of this is based on odds. Like, there's a chance you deposit and someone purchases your NFT first purchase. And you lose your money. That's kind of like the pitch is it happens. But on average, as you, if you continually deposit NFTs, like, you are getting paid out what you list them at. If you are pricing them fairly. It was kind of the initial pitch.

And I think it's still playing out. but we're seeing people price NFTs a little differently than I'd expect. But, you know, if you put in, let's say, a board ape and it's worth, there's an 80th bid on OpenC, so it's worth 80th. And you come in and you deposit it for 80th, you're going to, every time someone purchases from the pool, you're going to get a small amount of that. So if you're 1-100th of the NFTs in the pool, you're going to get 1-100th of every purchase. And that'll accrue over time.

and on average, because the price to pull is the average of all of the NFTs in the pool, you will earn the amount of ETH that you paired it with. And then when someone happens to purchase your NFT, they will decide do I want the NFT, do I want the ETH backing? Do I want to sell it back to them? But if they do that, if it's priced perfectly,

they'll take the NFT because there is a 10% haircut. And so that was kind of like how I planned it out as. But I think it's a pretty interesting way to sell your NFTs when there's very little liquidity that we're seeing. Also, there's no reason you have to keep your NFT in the pool the whole time. Let's say you want to deposit it. Some ethos accrued. You're ready to pull it out.

You can pull it out as long as the pool is not too hot, meaning that there's too many purchases, which was a big issue in the beginning. Not so much of an issue now as it slowed down. But that's to keep the integrity of the pool and it's like boring on-chain stuff. And also for the initial two-week period, there was emissions of the token.

So people were incentivized to deposit because of that and kind of build this network. One thing that interests a lot of people was how we launched the token. And so you actually couldn't buy the token for the first two weeks. The only way was by participating, which I found super novel and interesting

and I think a lot of people did too. And so that kind of had a lot of volume as a result. Now we're in this more healthy period where like obviously purchases are down, it's less hyped, but we're still seeing activity. And as a depositor, like, I mean, the, um,

the, um, the NFT yield is still, still quite, like quite good. But again, you can hit that, uh, like the, the turkey meme where it's like day 1,000. And so some people are making money, some people are losing money,

but it's still kind of like an unsolved game. And some people are having fun doing it. But I think that's the mechanics of the protocol that we have gotten like pretty well thoroughly done. So let me turn to like, Eric here and just ask Eric. Eric, you are an FWA enthusiast. Why? What do you like about it? Why are, why are you so thrilled about FWA? I think first and foremost, most fun I've had on chain in years probably since the original NFT wave. I mean, I think everybody knows I've been an NFT

maxi for a while. I've been supporting a punk for a while. Um, I haven't made a good point. It was when I was going to make as well. There's a lot of inefficiencies in the NFT marketplaces. So I I think that's one of the biggest things people don't realize why there's been such a long bear market inepties is like so many collections essentially went to zero because you can't even sell them, right? There's not even people looking for bids on the books of like open C and stuff.

So with FWA, at any point you can put it any NFT you have, well, not in the empty, there's whitelisted collections, but most NFT collections that have any value you can put out there and potentially get a bid on it if someone lands on it and takes it at any point. Why did it capture me, though? At first, just a novel idea is something to finally do on chain. I mean, defy is great and is everywhere on Ethereum, but it's relatively boring at the end of the day.

I think, you know, it kind of caught the Gasha trend at a perfect point. I'm sure a lot of people are aware, but on Ethereum and other chains, the Pokemon card thing's going crazy, right? You spend for $100, you pull a random card, and that was going big at the time. And just bringing it to NFTs, that takes a trust. are out as well, right? There are some, like, real-world assets.

I'm sure we'll get into at a point here, like Pokemon cars that are on FWA now. But just, I had a bunch of just like, I had considered dusted NFTs at this point. Even things that are pretty good, like me bits and, you know, doodles that were once at a point, of course, I bet, you know, multiple each that are hard to even get rid of these days. And I was able to put them out there and farm and, you know,

earn FWA and still have them out there now. harming, you know, pack for benefits. But, and then I would also say the coolest thing is, like, to me, FWA is like a protocol people can build on top of. Like, I've personally built something called Gasha Battles, which, like, pits five people's pulls against each other. And then they can, whoever gets the biggest pull takes all five NFTs. And there's been a ton of stuff built on top of this.

There's been, like, mega rip where people pool a bunch of eat together. And after like seven days or whatever it is, they rip, like, 100 packs and I'll split the pool. There's just a lot of cool things that can be built. on top of the base FW layer itself. So I think it's bigger than just going on FWA that fun and ripping a pack. I think we're going to see a lot of cool innovation. Like to me, this is where NFTs are going to be bought and sold.

This is where NFTs are going to be launched. I'm sure I don't want to talk about Flaer launch as well. And yeah, it's just like it's the first exciting thing I've personally seen on Mainnet in a while. That's not just DFI, right? So I guess that's why it's kind of just call my attention. Self-custody 1, but it still has a usability problem. A seed phrase on paper is still.

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But Eric, you're also positioning it as like this is just like a liquidity infrastructure for NFTs as well. This is like a building block for something bigger. Yeah, for sure. I mean, because if you think about it, like Sam, Say I'm sitting on a few meibets, maybe one me that has sold in the last month on OpenC or something. Like I can put five out there. I can back them with the floor price, 0.3 ether, whatever.

If someone lands on it, they might decide just to take it. That person, maybe was never going to buy a me bit, right? This gets into the interesting thing. And Adam hit on this a little bit. Like, how do you price these things? I think generally on FWA, we're seeing NFTs back by less than what they're kind of going, fair value on OpenC because I think people want to sell them. Like people would rather than take the NFT than take the Eth, at least a lot of people.

Although that's not fully fair because like the top NFT on FWA right now is a punk back with 300 8th, which is a top tier punk. It's a hoodie with a smile, very clean. Like it's probably around that value. But if that gets pulled, someone has to pick, do they keep the punk? Do they keep the Eth? They keep the Eth. That person who put the punk out there has to rebuy their punk essentially at 300 Ease.

So you have to be very smart about your pricing. Now, since that's the rarest ones, the lowest odds of being pulled, it probably should be a long time. So that's pulled. How the protocol works, they should earn that back in fees by the time it's pulled. But we have seen someone put a punk out there and they got pulled well before, like early on, right?

So it's just, it truly is just kind of, you know, like Adam said it. Over time, it all kind of evens out. There's winners and losers. But you are taking a risk by putting stuff out there. And at any point, you could spin for point, I think it's 0.080s or something right now to spend. you could spin and you could pull a Pong.

So it's cool. There's a Pokemon card out there that's backed by like 20s or something like that. And I think this is a topic we should just have at some point in this podcast. But these protocols like collector Crip who are custodying and ensuring these Pokemon cards and wrapping them and putting them on chain, I think we're going to see a proliferation of ironically real world assets on fake world assets. On fake real assets. Right.

which introduced a trust layer, of course. I'm curious about Adam's thoughts on this. If at some point, you know, FWA wouldn't even think about custodian or anything like that in ensuring. But, you know, I think we're going to see like Rolex watches on this thing. I think potentially someone could put a house deed out there.

Like anything that's tokenized to go on here. So that's why I think long term, it's super cool. Yeah, Adam, how do you see like the growth vectors of FWA ahead for it? Or are you kind of just like hands off? Like, this is a mechanism. We've built it. Maybe there's some, you know, tweaking and perfecting to do.

But other than that, like, you're going to just like kind of set it and let us see what happens. I mean, obviously, long-term goal is to be more hands off. But right now it's like the time to really be working on it. And we're going to keep adding new features, keep tweaking it. I think Eric touched on the FWare launch mechanism, basically. All the NFTs we're seeing in the pool currently are NFTs that have existed already, that have been around for years. Maybe they launched in the last year, like, if you're lucky.

But having new launches deployed into the pool, I think, is really interesting and incentivizes people to participate. And there's a chance where, you know, a lot of these mint kind of phases for previous NFTs. It's like a one-day thing. It's a one-week thing, max. Like, there's a chance that someone launches a new collection through Fware and it's there for a while. And, like, you know, also, I think Quit mentioned on this and he did a podcast, but when you're minting a, say there's a Zuki, you know, and this is the Azuki, you know, and this is the Azuki launch. day and you purchase, if you get a common azuki, that's like not, it's not a fun experience for you. You're shooting for that rare, the rare golden azuki. Whereas here, if you get an

azuki at all, you're very happy. You know, if you pull an azuki, like, that's an awesome experience and you've gotten what you wanted. And so that kind of skews the perception as well. Like, you're now excited to get the common of the collection. And we'll see how it actually plays out when, like, collections are launching it. They'd be, I'm completely wrong. But I think that will be pretty interesting. I'm building it so anything can be put in the pool. That's kind of why the backing can be, as people call it, like wrong, you know, having like 50-eath of a,

on a 10,000 tokens, NFT, is because I don't really, we don't know the price of these assets. Like if someone is willing to back it by that, and that's what they say it is, like it's hellish to try to figure out the price of a punk. And if you want to say, you know, if we made it so you could only,

instead punks were 30th and we're like, you can only back punks by 30th, no one's going to put in a hoodie, no one's going to put in an ape, no one's going to put an alien. And I think that's a bad decision. And so it's kind of the trade-off in that sense. We're still trying to think about how to price things more fairly. Like maybe there's a V2 where we do that. But for now, it's kind of just fair game.

But I think it'd be really cool to have more real assets. Like we've already added these Pokemon cards. There's no reason we couldn't add anything else that's tokenized. a reward asset. I will not be the one custodying them. I will never do that. I hate that idea.

I'll leave that to the professionals. Like, collector crypt is extremely talented and been doing it for so long. Hellish, that's why I'm sticking with fake assets. Like, I want an NFT, they're so easy. You can prove you on it. But if there's demand and there's a better custodian than me, there's no reason we shouldn't add it.

And so we'll kind of see that'd be really cool. Anything that's token. I mean, there's so many things that are coming on chain now that kind of makes sense. I know it's probably stopped a little bit in the last, like I remember four years ago, everything was coming on chain. And so I think we're kind of more mature now

and we have more the infrastructures there. And so there still is like the risk. Like what happens if, you know, I go back to like my shoe flipping days like Stock X. And what happens if someone lets a fake through? And what happens if, you know, stock X goes bust and then like they don't actually have the shoe anymore? that is a risk you're taking as well

but that's kind of why I would not be the one casting things but let's say that happens let's say there's that 20th Charzard that's in there I think it's a Charzard let's say everyone it comes out and it's like oh well the Charzard is bust it's a fake Charzard the purchaser would hopefully still take the eth backing and that still exists

and so the risk is kind of on the person of deposit rather than the person purchasing it from the protocol in the future and again maybe it doesn't play out like that But that's kind of like worst case doomsday scenario is how I could see it going. So the way I'm looking at it is like it is just one single global AMM for NFTs. Like you have NFTs, a splattering of NFTs on one side and you have eth on the other. And so this is actually just like ether being used as money for a splattering of NFTs. And the way that the NFTs come in is that the individual prices it according to what they think is correct.

can we talk about that mechanism, that like organic mechanism? What are the penalties for an individual? And I know it means like protocol ascribed penalties, but like why does the pricing mechanism work? So say I'm the punk hoodie owner and I fairly value my punk at 300. Say that is fair. You know, God comes and says, yes, correct, that's fair. What are the penalties if I were to actually value it at 350 or? what if I were to actually value it at 250?

Like, why does the market guide things correctly towards the actual fair value? How does that actually work? Yeah, so you're incentivized to not under-priced it because then it is more likely to be purchased. And so there's no reason for you to put it at 250 when it's three... Let's say even instead of God, there's a 300-standing eth bid on Cryptopunks.comps.

And so if you listed at 250, like, there's a 99% any rational actor will decide to if they purchase it will take the NFT because they can sell it higher elsewhere so that's kind of already like solved in that sense and if you overpriced it

too much let's say you overpriced 350 or it's a double you price it at 600 eth it's harder to get purchased from the protocol but if it does get purchased then the purchaser will most likely take the eth because they're getting more money.

Now, when it gets really close, let's say it's within 10%. And so if you back it by 300th and it's worth 300th and I purchase it and I'm a rational actor, I have to decide do I want this NFT or do I want 300th times 0.9 because it's a 10% haircut.

And that haircut currently all 100% goes to the protocol and buys the token. but you would get 270th as a result and so as long as the standing bid is within that 10%, like you will take the NFT and so that's kind of

the incentive to price it fairly and we haven't seen that play out exactly but I think over time and with the correct incentives it will. One other thing to pricing it correctly so pricing as close as possible you earn the higher you back the more protocol fees you earn essentially

so like you are one incentivized to price higher because you would get a higher cut of the protocol fees. Well, on the east side, you get, so let's say even if there's, you know, says it's 100 things in and it's $100, each item gets $1, regardless of the backing. But there are FWA incentives that go and are given to higher backed assets

and it's like the square root of the price. And so just in that something. But the reason you also back it accurately is because it lasts longer in the pool because the odds are higher. Or like, they're less likely to get it pulled. And so overall, like, you don't have to micromanage it as much. And it's all of the incentives were there to try to get it to price perfectly.

And so there is still a world where maybe there's, again, a V2 pool that solves all of these issues, that if they're even considered issues. but pretty happy with how V1 is kind of still working after a month and like people are still playing with it. A big thing was like, oh, what happens after the end, we stop emitting tokens and all of the supplies out there and the fact that there's any activity at all,

like it's working and it's still a pretty early for a hopefully multi-year protocol that will allow. Like if I get hit by a bus, God forbid that doesn't happen, but it will still run and there's no failure. The single point of failure is probably chain link, you know, and that's, was it a $10 billion company right now, and so, yeah, and that failure will just be you can't purchase and you can withdraw all your assets.

And so also, God forbid. So it's a wind down, not a crash. Exactly. But knock on wood, if I get hit by a bus and chain link fails, it will wind down. And so that's pretty good. Obviously, God forbid, there is some sort of exploit, things around chain.

There already was an exploit in the first version that we had to pay back out because I didn't get it audited and then prove the concept, got it audited. We're now here. Things are wonderful. And so I can almost thank the exploiter because if we found it, day one instead of day 30.

And so, yeah, and it's been cooking since. What stops me from like going and looking at the white listed NFTs, finding the cheapest one, buying a cheap one, putting it into the FWA pool and valuing it astronomically high, like 10,000 ether. Like, why wouldn't I do that? I mean, there's no reason you wouldn't. It's like, we've seen that now. There's been, I'm not going to go at like 50.

There's a punk at 300. The risk you're taking those is if someone manages to purchase it in the protocol, you're buying it back from them at whatever you backed it with. And so. Oh, because you have to back it also with the actual real Eath. Exactly. And so if I put in a stupid NFT at $1,000 backing, and then they sell it back to me.

I pay for that? You're basically buying it from them for $1,000, yeah. And so, or a thousand, and then a thousand eth. And then that eth doesn't go to me, it goes into the protocol. That eath goes to them. No wonder. It goes to them because of the money. Oh, I see.

And then the 10% haircut, because, like, they don't get all of it because so, but it's still worth it for them to take 90% of it. That other 10% will buy the FWA token and go to the program. So if I put in a stupid NFT at 1,000-Eth, they see like, oh, I just got this stupid NFT, but the protocol is offering to buy it back from me at, like, 900-Eth. Obviously, I'm going to take that.

Protocol collects 100-Eth, and then me who deposited a thousand-eth and a stupid NFT, I don't get my 1,000-Eth back. But I've been printing ETH fees along the way, and so in theory, that should have paid me out anyways. Yeah. And I do like to think of it more,

like the protocol, not buying it from you, but the depositor buying it back, I think it makes more sense. But still, yeah, exactly. And so, very cool. The thing I like about this is that, to Eric's point, like liquidity really dried up in the NFT world. And this is kind of like a universal buyer

or just like a universal liquidity engine so that if you, if there's literally not an offer for you on OpenC, you can go to FWA and you can do something there. And it feels like if we had many, more mechanisms like this, the NFT flywheel would have been a little bit more sticky and sustainable and like owners would have had just more assurances that there would be liquidity or a way for them to get east some way or another. And so I do think that under the success conditions of FWA, like this is really good for the NFT industry. I like to think so. I mean,

some people don't like it because obviously it's a little gamified. I think we've seen game of NFTs for years. They can just make this not play. I know. I think it's a net positive. I think it's bringing fun back to NFTs, and that's what I've been trying for the last couple of years. You know, people love punk strategy. Punk strategy had a moment for punks. Some people felt like it was still a net negative for crypto punks in general.

Some people felt like it was, I don't know, a lot of opinions. I disagree. But I see their points, you know, especially a lot of the more art-focused people. You know, but I think if you're against the financialization of art, maybe Eath is not for you. I don't know. That's my personal thing.

And I think like you're kind of financializing at the second you meant it and the second you sell it in OpenC. But I see everyone's kind of point. But I think it's a net good. I think where this gets really interesting too is the eventual idea of custom pools. So I'm in the FWA team.

I've been talking about this. But you could, instead of just this one global pool, people could potentially launch their own pool. Say I want to simulpunk whale and I want to start to get rid of my 30 pounds. I could just have my own Eric Punk pool put 30 punks out there back and with what I think the value is. Now the spinning price obviously goes up and I don't know, Adam can probably speak to the customization here, but the odds would vary on your punks, but people could have a chance every spin to just win a punk, right?

And as a pung holder who has a bunch that are just sitting there and doing nothing, you could be earning fees on them. Of course, you could be selling them. You could be buying back their punks. but I even saw something, somebody tweet about how like Google Labs is sitting all these punks like 10% that they could potentially, they really could never sell

because it would just look bad on the market, but they could potentially be farming through FWA, through maybe a custom pool, something like that, on those pumps. So it starts to get really interesting when you talk about that. Fware launch,

which I think is going to be a superior NFT launching mechanism as well versus just, you know, putting it out there cash grab and first person to sweep the collection, you know, gets the most value out of it. So there's a lot of stuff beyond just, you know, the current generalized pool that I think is going to be really interesting for the nutty space too. And I'm trying to keep the general pool as simple as possible as well.

Like there's a, and obviously I consider like, oh, like maybe we have separate main pools that have price bands. So you can only put something in in this price range. Or maybe it's only Yuga Labs kind of assets. but I think having the main pool as simple as possible benefits everyone building on top of it. And so we're seeing like a gotcha battles or the mega rip one or swap. It's simple. It's easy to build on this main pool.

Everything kind of there's 6,000 assets. It's a bunch of collections. It's perfect. And then having these custom pools kind of solves the problem of like if I want to only pull and purchase like a punk again, that purchaser can go in, look for pools that are only punks and kind of go from there. And the pricing mechanism would work in the main pool, too. Like, the way it's set up, if there's only punks in the pool, like it will be an average of everything in there.

And so the code was already audited. It's really simple to just kind of make it a little more granular, just with one depositor. And we're still working. We'll probably be past the first four-a-launch. It'll probably be not past the user pool, custom user pool is out yet. But we'll see.

And I'm still tweaking it. Like, maybe it makes sense. We've had some people say, like, they don't want actually the buyback option for custom pools. And so maybe there's a world where you don't want to deposit all their punks. They don't want to back them by ETH, but they're still incentivized because all the money goes to them because they're the only depositor.

And so kind of still workshopping that. I have a couple iterations done that I'm getting audited, but they still like to be tweaked. And we'll kind of see, we'll see what happens. I'm really excited about the custom pools because I think it kind of solves a lot of the issues from the main one, especially if all the fees from the user pools flow back to the main pool and flow back to the token,

I think it's still kind of all as like a nice little ecosystem. Yeah, talk about the actual token. So FWA token, it was created at Genesis, but you could not buy it. You could only get it by actually participating in FWA. Talk about the way that the token came into the world and its role that it plays in the app. Yeah, and so some of the reasons of why you could only get it by participating.

I've launched probably, 16 projects over the last two years. And there's so many external factors that go into why a project failed and a lot of them aren't my fault. I mean, you could say it's my fault as like a mechanism designer, but not my fault. And like, I remember I launched one of my first token works projects was Top Blaster. And it was 6.9% of token fees on selling the fees would accrue whoever top blasted and paid the most on average for the tokens to get them all.

Really cool idea. I liked it. The site looked great. after launch, Trump launched, and just nuked it to zero. It might have even been dead before, but there was no chance of it coming back. One of the tokens got sniped, and it was called Cabal, it was on main net. You had to convince

an AI agent to let you sell. So you had to basically, like, beg, publicly beg, and it would tweet, and it would show, and it would take into account, like, oh, like, what's the market? Like, is the token trending upwards? Is, are you in profit? How long have you held? And it's like, how compelling is your argument? Really cool.

I think we launched that in a certain market, and it could go crazy. Instead, it went to like $2 million market cap, which was still great, but someone snips 25% managed to sell after like 40 attempts, which is still really cool. It took 40 attempts to sell as a sniper. It took projects dead.

And so, like, as a result of someone who didn't really care, and people will disagree with this, but there is a fine line, and like it's kind of blurry what a sniper is, and what an early participant is, you know, it's like if I see a product early and I buy it and I am a believer, like am I like, or am I just a savvy crypto trader? Like I don't really know.

And so I usually don't, like I'm not upset at snipers. Like I think like if I didn't know what this project was and I can make money, like I would probably try to buy it early too. And so in that sense, I think it makes sense to try to distribute your token to people that actually know what it is and actually are participants. and so the best way to do that is to not let them buy. Don't let people buying that aren't buying. And there's different ways we could have done it.

I've seen some other products pop up that are like giving purchase allocation to people that participate in a project. But I think for us, it just made sense of like, oh, you can cash out of ETH or you can cash out ZWA. And that's like a way to buy it. We also want to do incentivize activity and try to like, they call it like the, obviously the cold start problem of like how do you get instant like bootstrap protocol to start like getting deposits and start getting people to play. And the token kind of just like plugged all those

little holes. And so, um, also it's really fun to have a token. Like, I think if you're making a crypto project, like, why not try to make it as decentralized and work on its own? Like, that's the whole reason we're here. And so we could have not had a token. And there's a lot of platforms that don't, but, um, I think having a token and accruing value to it is like, like, crypto forward kind of way. And so, yeah. How does it actually? a crew value. And so again, a lot of this is on chain. It's been like from day one and the docs.

And it's all dependent on usage. Like it's the token probably worthless. Like who knows. But again, the fees from the platform all go to buy FWA and distribute it to various parties. And so initially all the fees we're going to token works. And now the fees, 100% of the protocol fees. So, you know, that 10% haircut, there's a 1% fee on purchases.

and I think there might be a 1% fee when you take the NFT portion. But all of those fees kind of go to buying FWA publicly. And it's one-eath per block, so it does it automatically again. If I get by a bus, it'll still work. And distributes back into the system. And so right now we have it set.

So I think 40% goes to purchasers that day and 30% goes to depositors that day and 30% is burned. And I think it could be wrong on this stuff. or something like that. Okay, so there's a perpetual incentive to do the thing because there's always flows

to buy FWA and that goes to like flowing to people depositing NFTs or doing purchases, but then 30% is also burned. So that's like put into the pocket of the value of the token. And again, this is fully dependent

on people participating in any way. Like people deciding that they want one of these NFCs and they're playing. It all goes away if people stop purchasing. And we're trying to like kind of align with that, but there's obviously no buybacks at the token if there's no volume. And so just to drive that home.

But yeah, I think it's like the people that are holding the token kind of believe in the platform and believe that this like protocol is working and can work and you work even better. And like it's the fact that 100% fees go to buybacks, they don't go to buyback and burn all of them. but what initially was kind of emissions, tokens getting almost minted. They were fully in the claim contract, but I'd call it emissions.

It was now replaced by tokens getting emitted from buybacks, like demand of the platform. It kind of all just like works. And so, well, I'm still tweaking all of these numbers too. Like that's kind of where I want to be hands off, but it's too early. It gets so month in and it's hard to say how everything kind of plays out. and we're not really,

we're in like a little mini kind of bull. Hopefully, this is the start of a bull. If I had to, you know, prang, my, my,

my, my youth long that I made in May, um, right at 2330. Finally, I've been whole underwater for so long is finally, I made $3,000 on this trade after three months. And I closed it immediately and I was down so much.

But I was like, I actually, like, I held it along enough and I knew he could come back. And so, again, hopefully this is the start of like a little, the big one, yeah, the big one. But if that's the case, like I think like having a decentralized

kind of protocol like this that's use their own through the token. And it's, um, and it's been nice that like we've been able to experiment for the last two years. We've been launching tokens. We run with the ones that make sense. We kill the ones that don't. Some people like that. Some people don't.

We're very transparent with how it works. But it's nice to like right before a bull, hopefully. we have a big winner and like we know we we've been we already made a bunch of revenue in the first two weeks and we're now just kind of like heads down working on it and um we do make money off the the token trade that's kind of the where the token works still has revenue is um there's a one percent by sell tax that goes to us but that's considerable and like can go down as well um but eric brought up flare uh what is this component of fwa what is what is flare yeah so um it's it's actually it's FW.

I think of Faire, but with a W because it's like, I'm going to meme it forever. All the memes are running great. It's funny. People call it, I didn't call it FWA. Like,

I didn't intend it for that. People pronounce it as that, which is funny. I think it's great. So I kind of run with it. But anyway, FWare launches are net new NFTs that are launched through the platform.

And so we saw it first with Jack Butcher launched a collection called Rappers. And so it was 80 NFTs. We backed them with 0.1. one, it was super low, and basically launching NFT collections through the protocol. And the reason I think this is interesting is kind of what I said with the, I think it was the Azuki example.

Like if you get a common rapper, you're still happy. You're like, oh my God, I finally got the collection that I wanted. And so we're hoping that this helps distribution as well. And there's a lot of problems with artists launching in the pool that I think Fuer solves. And so first you have to back it. the backup by ETH. And a lot of artists can't do that.

Or they're like, I kind of want to just release art. I don't want to have to put up ETH as well. And then also just distribution in general, I think is like we saw in 2021, a lot of these gas wars, a lot of these, like how do I get these NFTs,

not only in collectors' hands, but also in like a fair public distribution. And so I think by launching through Fuer, what it does is it lets people come in and say, I want to back these NFTs, let's say there's a thousand of them. And they want to sell them at 0.05. They say, all right, I want these to launch

at 0.05. Is there anyone interested? And then collectors can come in and say, I will back 1, 5, 10, whatever the limit is. And they put up 0.05 each. When it gets fully backed, the collection is launched, and all of those 1,000 NFTs get added to the pool with the backing. And then, let's say, someone purchases one of these NFTs,

from the pool. They can say, I want the ETH or I want the NFT. If they take the ETH, the NFT goes back to the launch contract and goes to the person that backed it. And so they said, I want it for 0.05. They got it for 0.05. They're happy. Or let's say, hey, I'm the purchaser.

I like this new NFT. I am going to keep it. They keep it. Then the ETH that it was paired with goes back to the backer minus the 1% pool fee because you can't really avoid that. If we ever launch a new pool, we'll make it so it doesn't have that. but 99% of the money goes back to them. How does the artist make money?

The artist makes money by the fees that it accrues while it was in the pool. And so like I mentioned earlier, you could deposit an NFT. It gets purchased the first purchase and you are out of luck. But with a large enough amount, the variance kind of evens out. And so on average, let's say for a thousand NFTs at 0.05 would mint out at 50th. the artist should get around 50 EF and fees, all things considered. And so the artist gets the full amount that they were hoping for. The backers that backed it get a chance, hopefully a higher chance of getting it

if the purchaser doesn't take it with a minimal risk. And then hopefully the distribution is really good because it goes to people who purchase from FWA. And so there's kind of a bit of chance of what I actually get. and there's a chance that someone purchases from there and decides to keep it is probably higher than the average thing in the pool. And so it kind of helps the ecosystem as well.

We'll see how it plays out. Again, the first one will probably launch by this podcast. This could be hugely dunked on as a result, but I think it's going to be pretty good. So the first one we're launching as well, which should be this weekend, is a test collection. There'll be 111.10.com.

It's backed by 0.25ith. and they'll act as almost like beta NFTs. You can activate them and get first access to deploy these custom user pools. And so we'll kind of like let people play that way. They're little cute, fuzzy things that we made. And so we'll price another at 0.25. I think the interest is there.

After that, the first like artist launch will be Sterling Crispin, who has made this awesome save Ethereum collection where the goal is to back up the, you know, block, the early blocks of Ethereum onto Ethereum and kind of save all the data that exists and it's kind of like a recursive thing. And they're

these on-chain little cards and have people's faces that are in the space and they're pretty cool. And they can trade card game too. I don't know. We'll see. I'm excited for both. But we'll kind of see what happens. I think the goal is to get activity and get people

purchasing. That's kind of the key. Like if no one, again, if no one's buying NFTs and there's no and bidding on NFTs and no one's purchasing from FWA, it's bad. It's bad for the ecosystem. And so incentivizing as much as we can for people to collect and to purchase NFTs from the protocol, like that's the goal. And so by doing these swear launches, we're hopefully adding NFTs to the pool that people

really like at prices that we've seen people are willing to back it at. And so it should be a net positive for the whole ecosystem. Yeah, I think it eliminates a lot of the issues we saw in like 2021, 2022 with NFT minutes. I mean, what you saw was, I made a lot of cash grabs, first of all, like instant sellouts and the artist's just walking away, right? This takes that away because the artist isn't getting paid to eat right away, right? They're getting fees off the backing of the collection, essentially, in the FWA pool.

And it might take a long time for like all these NFTs to sell, right? They're in the larger pool. People have to spend and land on them and all this stuff. And it also, it's a better distribution. like for the artists. They're getting put in this larger pool. There's a lot of the users using Epitwai that maybe didn't know about the artist

that has a smaller like Discord community. There's less of like just rush to trying to cite Ments and you know, white lists and all these things. So I, you know, it still requires the NMT market to be hot for any launch to do well or for NMT's in general to sell out. But I think it takes away a lot of the issues we saw with Ments in 2021, 2021, which led to, I mean, it was like an IPO like craze.

It led to too many scammers, too many cash grabs, and eventually just drying up liquidity, right? And in the end, that led to the downfall of NFTs for the last four years until hopefully now, seem to be bouncing back a little bit. But I like the mechanism. I'm interested to see how to play out. You know, an NFTs, at least Robin Hood NFTs right now seem pretty high with FWA on a deer main net things seem to be bouncing back.

So getting a new launch, mechanism could be a nice catalyst as well. So definitely excited. Yeah, launch mechanism. I think these are definitely the right words. It feels like one of the things that pump did is it really homogenize and standardized the token launch process. And there was somewhat of that in the NFT space, but it was all like opt in like the

10,000 NFT, PFB, but really that was it. And so what I like about this is like there's one central place to have a standardized launch for an NFT and that like just orderly market structure makes things more scalable, more easy to reason about, more easy to think about. And I think that has like potential just

just palatibility and like understanding in the market. And so like having an NFT launch pad where like liquidity is there no matter what that NFT is or what it does, I think it's actually pretty bullish. Bankless Nation, we've built something for you. Introducing the

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Wherever you get your podcast, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now. Adam, what's next for FWA? When we shut down this podcast here in a bit, where are you going to go work on? What's a short-term roadmap? I just got the contract back for the four-launch stuff.

So I kind of got to come the auditor, go through, make the changes that need to. It seemed pretty good, but they had some recommendations, try to get that out. And then for our launch zero, and then hopefully for our launch one, hopefully be Sterling.

And then another thing I want to kind of work on and kind of take my hands off as much as possible is that the NFTs that are added to the main pool. I don't really love that I can pick and choose. And just like, if FWA holders think 10,000 tokens are bad for the ecosystem, like maybe they should be able to kind of take them out. And so brainstorming that, a lot of it is just like sitting on the changes more than actually

doing them of like what feels right, what, you know, the mechanisms itself, like, how do we tweak these? And that's kind of a hard, like if I sit down and really try to think about mechanisms, like I can't, but they'll kind of just like come to you. And so just kind of keep chugging along on that. It's nice that, you know, we have a pretty, like, like solid short-term roadmap. And so it's just always something to work on.

But, yeah, got to throw a podcast in here and there. Yeah. Oh, we appreciate. The podcaster, it's appreciate you throwing a podcast in here there. What's interesting here is just all the building on top. And the composed ability of Ethereum just showing to be very beneficial. Like we're seeing a lot of, I don't know, Dave, you've seen emblem vault, but essentially this is a thing that you can wrap NFTs from other chains and bring over.

So like, that's how the Pokemon cards are coming over, right? Most of these are on Solana or other chains. You can now wrap them, bring them over to Ethereum, and put them in FWA. So I think this is driving a lot of innovation around composability across chains and real world assets. I mean, I have a hot take that in like two years, most of the most valuable assets on fake world assets

are going to be real world assets. I just think like if you can pitch to like quote unquote normies, I hate the term. But if you can pitch to them, hey, like, you know, instead of, oh, you can get this NFT, which maybe they don't like good of teas, they've heard bad things about NFTs. Like everyone wants a punk, I guess,

but other NFTs, who knows where that's going? If you can pitch, hey, you can spend for 50 bucks and win a $100,000 Pokemon card, or you can win a Rolex or you can win a title. Don't know, like whatever. Things could get weird, right? I don't know. I think luxury good sellers, like, I don't know,

a Louis Vuitton or a Prada or something, could tokenize authenticity, and we could see those go into insured vaults. on crypt collect. And you could spin and you could win a Louis Vuitton bag. I don't know. There's just so many things that could happen with this real world asset layer that are being tokenized.

And of course there's an element of trust there. But as someone like collector crypt gets bigger, you know, and more trustworthy, like at the time hardens that stuff, right? But, you know, all these like new things that are popping up like in Vault and just you could bring them over to Ethereum. And then, you know, Adam, I'm sure you guys have, I've talked to you a little bit about going to Robin Hood. I'm sure you guys have plans for other chains too,

but just be able to bring these assets from chain to chain. Because I think, like, I love Main Net Ethereum, right? Like in my heart, that's where I started. And I still got a soft spot for it. But there's no denying the UX of Layer 2 chains is way better, right? Fees are cheaper. But like FTAB had to launch on Main Net Ethereum because that's where Punks live. That's where high value in FTs live.

But if we slowly start talking about composability layers and wrapping vaults to bring over to other chains, that opens a whole other aspect here. Because now of a sudden, NFTs don't have to live on one chain. I could bring my punk over to Robin Hood. There's an FWA on Robin Hood. It's cheaper. It's quicker, all these things. So there's just, like, to me, there's unlimited potential here that go well beyond just, you know,

spinning for NFTs that are on the dear main net. And I'm not against moving through a different chain. Like, I mean, we're obviously, like said, mainnet makes sense for the home of the token and the protocol because that's for the NFTs. are. But also just like people are building on top of us, like we built on top of on chain link and on uniswap v4.

And so anywhere there's like a uniswap B4. Actually, I don't even think we need Uniswap V4 on the chains that we deployed but we'll need chain link because you can just, we can bridge the token over with like layer zero. We've seen many people do that. Like Adam from

very surf code repeat, is his Twitter. But he launched Friend Pet like years ago and he's since bridged it over to MayNet and has renamed the token on Maynet. And it's like a different project there. But it's the same token, which is pretty cool. I think there's no reason we couldn't bridge FWA token to all these chains, have a deployment there and benefit from the speed.

Because that's probably the biggest thing too is it takes about a minute to purchase because we're waiting for some chain link callbacks and some other stuff behind the scenes. And so not the end of the world, but it could be way more fun to do it instantly. and it's definitely there. Although I'm pretty firm on it won't leave for the EVM, you know. I'm not a big, I mean, Solana's fine. I trade on Solana. I participate in Solana.

I like building on Ethereum. I think it just makes sense. So we'll probably die on that hill. Yeah, I mean, think about the crazy stuff. I mean, you could, if it's Robin Hood, say, you know, there's tokenized stocks there. I saw today someone's like making a Nvidia 3X long token on Robin Hunt's chain. You can move along a wallet.

It's like you could have, you know, stocks. inside of this theoretically, right? You could have a custom pool where you spin for, you know, top prizes, a thousand shares of Tesla, and the bottom prize is one share of GME, right? And you're doing gosh the spins for stocks, right? Or like, there's leverage stock tokens in there. It's like when you start thinking about what could actually go in here,

it gets really interesting. Adam, thank you for building cool stuff on chain. I think there's definitely a missing need for that these days. And hopefully this is the first of many apps. like this, bringing fun back to on-chain stuff, and thank you for being the first. Awesome. Thank you for participating, everyone,

and you guys for being interested. And we'll see what happens. It's pretty exciting so far. Eric, it's good to talk to you, my man. I think we're probably to talk a lot more now the energy's back into the cryptosphere, so this is perhaps also the first of many. Definitely. Good to be back.

Thanks, David. Bankless Nation, y'all know the deal crypto is risky, but not risky enough. The institutions are here, so we're going even further west. This is the frontier. It's not for everyone. but we are glad you're with us on the bankless journey.

Thanks a lot.