Method
Three edges, all mechanicalDepositing on FWA pays a positive expected return with a negative median one. That single sentence is the whole product. A depositor commits backing to a listing; each acquisition in the pool pays every open listing an equal share of the fee; and the listing earns that flow until it is selected and settled. The mean depositor comes out ahead. The median depositor does not — because most positions are selected before their fees compound.
Lifetimes are memoryless
Selection is weight-proportional and a listing's weight is 1e36 ÷ backing, drawn independently each acquisition. A position therefore has a constant hazard of being picked, so its lifetime is geometric — memoryless, with a coefficient of variation of 1. The consequence is the hero curve: survival decays as e^−t, and 57.3% of positions close before they reach breakeven at t = 0.85 of their weight-implied expected lifetime. A single deposit is, more likely than not, cut short before its fee income covers the exit cost.
Median versus mean
Because the distribution of single-position outcomes is heavily right-skewed — most die early, a few survive long enough to earn a lot — the median outcome (≈ −16% per cycle on committed backing) sits well below the mean (≈ +15%). An individual depositor experiences the median. A book of many independent positions experiences the mean. Closing that gap is not a forecast; it is a consequence of holding enough uncorrelated lifetimes at once.
01 — CalibrationBacking held at 1.10× floor
Above 1.176× floor, purchasers accept the standing bid and the position surrenders the 15% settlement discount. Just below it, they keep the NFT and the position pays a 1% cut instead. The estate tracks floors continuously and lowers backing before the market moves, not after.
02 — The crownOne position, held permanently
A tithe on every acquisition fee accrues to a single deposit, and a challenger must clear it by 10% to take it. It is winner-take-all, so it is unreachable for individual depositors and structurally cheap for pooled capital. Its size also makes it the least likely position to be selected.
03 — VarianceForty concurrent positions
A single lifetime has a coefficient of variation of 1. Across forty independent positions spread over several collections, dispersion falls by √n to roughly 16%, which is what turns a 57% loss rate on any one deposit into a distribution the estate can actually underwrite.
Why it compounds for a vault and not for you
Fee income per position is independent of position size — every open listing earns the same equal share per acquisition — so annualised return scales with acquisitions ÷ (positions × backing). The estate favours the cheapest liquid eligible floors, holds no more than 25% of backing in any one collection, and rebalances backing down as floors move. None of these three edges is available to a single depositor holding a single position; all three are mechanical, and all three require size.