A Capital Efficient Onchain Gacha Mechanism#

August 18th 2026

Onchain Gacha is a capital efficient, provably fair onchain gacha. A decentralised valuation mechanism allows a broad range of allowlisted assets to become yield-generating prizes without requiring an equal amount of ETH to remain paired with them. The protocol accepts allowlisted ERC721s and ERC20s, as well as native ETH.

Participants#

Depositors supply assets and earn yield
Vouchers appraise incoming assets for a fee
Players buy tickets for a chance to win assets from the pool

Intentions#

Onchain Gacha's north star is to create a sustainable protocol that can live onchain in perpetuity, permissionlessly pairing yield-seeking depositors with win-seeking players and providing rewards for vouchers and collection bidders helping the protocol function.

The economics must work without token emissions. $ONG rewards early participation and receives recurring buy pressure from ticket activity. The token exists to allow anyone exposure to protocol revenue upside but is not required to subsidise depositor yield. The economics are sound with or without $ONG.

Opportunity#

Existing onchain gachas let depositors pair an asset with an arbitrary amount of ETH and treat that ETH as the asset's value. The capital-efficient strategy is therefore to pair the cheapest accepted asset with as much ETH as possible. This does not make the asset yield-generating. It makes the ETH yield-generating and leaves the asset as decoration.

Onchain Gacha instead appraises the asset, removes the permanent ETH pairing, and prices every ticket from the expected value of the assets it can draw. Depositors can take assets and find liquidity for them, turning them into not just an expectation of their FMV in liquid ETH but also a positive yield on top.

Overview#

A depositor supplies an asset and opens its valuation with an ETH-backed vouch.
Vouchers compete to appraise it by outbidding each other. Overvaluation is punished by the "yoink" mechanism.
The asset enters the pool alone at its final appraisal - vouched ETH is returned as well as a finder's fee.
Players buy tickets priced from the pool's draw-weighted value.
Ticket revenue replaces drawn value, pays depositor yield, and funds $ONG buybacks. None is retained by the protocol owner.
Chainlink VRF selects a prize. The player either takes the asset, becomes the new owner of the deposit, or accepts a collection bid.

Valuation#

Non-ETH assets first enter a valuation phase. The depositor opens with a vouch: an ETH-backed estimate of the asset's value. Anyone who believes the asset is worth more can replace the current vouch with one at least 10% higher. Outbid vouchers are refunded in full. Native ETH deposits skip this entirely and directly enter the protocol, albeit earn less expected yield as a result.

The depositor's opening vouch remains reserved because some or all of it may be paid to the final highest voucher. The fee depends only on how much the final appraisal exceeds the opening vouch:

VF = \min(k(A-V_{ia}),V_{ia})

Here, $A$ is the final appraisal, $V_{ia}$ is the opening vouch, and $k$ is the share of the correction paid to the winning voucher. $k$ exists to cap the depositor's maximum vouch fee and is set such that it even the worst case doesn't take expected depositor yield negative. Ie: if the expected depositor yield is +2.5%, setting $k$ at 0.025 will ensure that the depositor yield stays positive.

The depositor can open low and pay the market for price discovery, while risking that the asset enters undervalued. Alternatively if they have the ETH they can open near fair value and pay little or nothing.

Valuation lasts one hour. The first outbid extends it to two hours from deposit. Any vouch made with less than five minutes remaining resets the clock to five minutes. The minimum outbid margin is 10%, ensuring no one can adversarially continually outbid by 1 wei and prevent an asset from entering the protocol. At close, the winner receives their ETH and fee, the depositor receives the remainder of their opening vouch, and the asset enters the pool alone at appraisal $A$ .

The depositor can mark their asset for cancel. If the asset has not been vouched for other than the depositor's initial vouch it can be withdrawn immediately. Otherwise, if cancelled, no more vouches can be made on the asset, but the asset can still be yoinked. At the end of the valuation phase the depositor can withdraw their asset as well as what is remaining from their initial vouch after the usual fee has been paid to the highest voucher. This exists in order to protect depositors from low valuations while still ensuring assets vouched at over F can be yoinked.

Yoinking#

Vouching raises undervalued appraisals. Vouchers and depositors are separately incentivised to increase a pending deposit's valuation, the former are vying to win the vouch finder's fee, the latter want to maximise their protocol yield. Yoinking creates a game-theoretic enforcement action designed to constrain overvaluation and therefore keep the asset's appraisal close to its FMV.

During valuation, anyone can provide a comparable asset in exchange for the ETH backing the highest vouch, minus a 1% protocol haircut. The voucher receives the comparable. The depositor receives their asset and opening vouch back, and the deposit fails. In the Onchain Gacha a vouch represents a resting bid, a belief that an asset is worth at least the value of the vouch. It is selling a put and can be exercised.

The protocol also mints the yoinked wallet a soulbound NFT recording the event such that forever more the chain will remember them being yoinked.

For an ERC721, a comparable is any token from the same collection. For an ERC20, it is the same amount of the same token. For example, if a depositor deposits Cool Cat #100 and they or anyone else vouches that it is worth 100 ETH to inflate its yield, someone can buy another Cool Cat for 0.17 ETH, supply it as the comparable, and receive 99 ETH from the vouch after the 1% haircut.

A vouch above an asset's FMV cost creates an arbitrage: buy the comparable, yoink the vouch, and keep the difference. If $F$ is fair value, $\phi$ is replacement friction, and $h$ is the haircut, the enforceable appraisal band is approximately:

F \leq A \leq F(1+\phi+h)

Depositors and vouchers ensure roughly $F \leq A$ and the yoink mechanism ensures $A \leq F(1+\phi+h)$ . These are not hard constraints but more economic incentives provided by the protocol in order to set the long term equilibrium.

The mechanism therefore values floor assets, not rare traits within a collection. A separate boxing protocol can bundle individually appraised assets into equal-value, unrevealed ERC721s that can then be placed into the protocol but won't be part of the initial Onchain Gacha launch.

Tickets#

Player choices#

When a ticket resolves a player can choose between:

Receiving the asset
Taking over the deposit - no valuation period here; the player inherits the remaining appraisal lifetime but the deposit lock ends on takeover
Accepting collection bids (if any)

Pricing#

Every active position $i$ has appraisal $A_i$ . Its draw weight is:

w_i=A_i^{-\alpha}

Its probability of being drawn is therefore:

P_i=\frac{A_i^{-\alpha}}{\sum_j A_j^{-\alpha}}

Higher-value assets are less likely to be drawn, but $\alpha$ controls how much less likely. At $\alpha=1$ , ticket value is the harmonic mean used by FWA. At $\alpha=0$ , every asset is equally likely and ticket value is the arithmetic mean. Onchain Gacha begins at $\alpha=0.9$ .

The expected value drawn by a ticket is:

M=\sum_iP_iA_i=\frac{\sum_iA_i^{1-\alpha}}{\sum_iA_i^{-\alpha}}

Tickets add a surcharge $e$ :

T=M(1+e)

At $e=5\%$ , player RTP is $1/(1+e)\approx95.24\%$ . Chainlink VRF resolves tickets in purchase order and can only draw positions active when the ticket was bought.

Depositor yield#

Ticket principal replaces the expected value drawn. Of the 5% surcharge, 3% of appraisal goes to depositors and 2% funds $ONG buybacks, giving baseline depositor profit:

p=3\%

Depositor revenue follows $A_i^{1-\alpha}$ . This exactly offsets draw risk:

\frac{A_i^{1-\alpha}}{A_i^{-\alpha}}=A_i

A position therefore expects to accrue $A_i(1+p)$ before being drawn, independent of $\alpha$ . Changing $\alpha$ changes how long valuable assets remain in the pool, not their baseline expected return.

Size premium#

Purely proportional rewards give every asset the same expected percentage return. To modestly favour larger prizes, $\beta=0.5\%$ of depositor revenue is instead allocated with weight $A_i^{s-\alpha}$ , where $s=1.6$ . This is the smooth equivalent of a tithe: larger assets earn slightly more without a discontinuity at the top of the pool.

Each position contains one asset, preventing bundles from gaming the size premium.

Exotic premium#

Native ETH enters at face value and skips valuation, making it easier to deposit but less interesting to win. When non-ETH assets make up less than the target 80% of the pool, up to $EP=2.5\%$ of ETH depositor yield is redirected to them:

D=\operatorname{clamp}\left(\frac{E_{upper}-r}{E_{upper}-E_{lower}},0,1\right)

The applied premium is $D\cdot EP$ . It is maximal below 50% exotic assets and falls linearly to zero at 80%.

Withdrawal and staleness#

An appraisal remains valid for 30 days. Stale positions stop accruing and being drawn until revouched.

Every position must remain active and drawable for seven days after activation. A takeover ends this lock. After this lock, a depositor can mark an active asset for withdrawal. It immediately stops entering new draws, but remains locked until every ticket that could already draw it has resolved. Accrued rewards are always claimable.

There is no clawback or break fee: accrued rewards paid for draw risk already borne. As the protocol distributes only collected ticket revenue, it creates no unfunded depositor-reward liability.

Together, $e$ , $\alpha$ , the size premium, and the exotic premium tune the balance between compelling tickets and compelling deposits without changing the core mechanism.

Collection bids#

Anyone can place an ETH bid on a supported collection or ERC20 amount. ERC20 bids must cover the full amount drawn. A player has one hour after resolution to accept the highest available bid, after which they receive the asset. Equal bids resolve first-in-first-out and accepted bids pay a 1% protocol fee.

Bids can be submitted or withdrawn at any time, including during the player's decision window. Collection bids provide instant liquidity without requiring ETH to remain paired with every deposited asset.

$ONG#

The total supply of $ONG will be 100 billion. The protocol provides players with approximately 95.24% nominal RTP and, before size and exotic adjustments, depositors expect to accrue 103% of their asset's appraisal before it is drawn. The token receives recurring buy pressure equal to 2% of expected prize value per ticket. In today's landscape allowing the market to buy into a protocol is critical. There is no equity of any kind associated with the protocol, just $ONG.

$ONG begins gated. It can only be bought by allowance holders and remains non-transferable once bought, preventing secondary pools from bypassing the gate. When a ticket resolves, both the player and the depositor whose asset was drawn receive buy allowance equal to $A$ . This distributes access to the two sides responsible for protocol activity without giving either free tokens. This gated period will last 7 days, after which the token will no longer be gated.

50% of the total $ONG will be placed in a single sided Uniswap V4 liquidity pool. This pool will initially have a 1% dynamic pool fee, lowered to 0.25% when $ONG is no longer gated. Accrued ETH from this liquidity position will go to the protocol as revenue, accrued $ONG will be burned.

20% of the supply will be distributed to players of the protocol. The protocol will start with 10% of the token supply represented by 1000 $ONG deposits ranging from 7,500,000 tokens to 100,000,000 with an average of 10,000,000 tokens, deposited by the protocol through the valuation bypass and appraised at $100 worth of ETH each. This implies an initial conservative market cap of $1,000,000. This initial 10% deposit can be considered a first-of-its-kind gacha ICO. The remaining 10% will be periodically added to the protocol over the following 10 days, 1% a day, always at a discount to the market cap at that point in time. The goal here is to distribute the token widely at the start of the protocol and reward early players. Depositors already expect a 1.03x return on any deposited asset and receive a buy allowance whenever their asset is pulled. As such this tranche is distributed to players of the protocol. Anything that incentivises more play -> more tickets purchased -> more capital velocity -> deposits accrue their expected yield more quickly -> incentivises more depositors.

30% of the supply will be held by the protocol for future betterment of the protocol. These tokens will not be sold on the open market. There are no plans for them yet but will be used to help grow the protocol and align incentives between the protocol and token holders.

100,000,000,000 $ONG (100%)
│
├── 50,000,000,000 (50%)  Uniswap v4 liquidity
│   └── Single-sided $ONG/ETH position
│
├── 20,000,000,000 (20%)  Player distribution through the protocol
│   ├── 10,000,000,000 (10%)  1,000 launch positions
│   └── 10,000,000,000 (10%)  Added over 10 days at 1% per day
│
└── 30,000,000,000 (30%)  Protocol reserve
    └── Reserved for protocol growth; not sold on the open market

Revenue#

The full ticket price is $T=M(1+e)$ . The expected prize value $M$ goes to depositors, replacing the value expected to leave the pool when the ticket resolves. Of the surcharge, $0.03M$ goes to depositors and $0.02M$ funds $ONG buybacks. None of the ticket price is retained by the protocol owner:

T = M + 0.05M
    │
    ├── depositors: M + 0.03M
    │                └── replaces expected drawn value and provides yield
    │
    └── $ONG buyback: 0.02M

At the initial parameters of $e=0.05$ , depositors collectively receive $1.03M$ from a $1.05M$ ticket: $M$ replaces expected prize value and $0.03M$ is depositor profit. The remaining $0.02M$ buys and burns $ONG from launch. The protocol owner receives no ticket revenue. Collection-bid fees, the retained yoink haircut, and fees earned by the protocol's liquidity position remain ancillary protocol revenue.

Risks#

Appraisal drift: $A$ $A$ is unbonded after valuation and can diverge from fair value
- Appraisals expire after configurable period $T_s$ , initially 30 days, after which the asset must be revouched
Floor-only NFTs: any collection token can yoink a vouch, so traits above the floor cannot be appraised directly
- An in-development boxing protocol will bundle individually appraised assets into equal-value, unrevealed ERC721s
Gas: small appraisals may be uneconomic to vouch or yoink, while gas spikes widen the unenforceable appraisal band
- Configurable $VF_{min}$ keeps deposits above this enforcement dark zone and can rise with prevailing gas costs
Last-block overvaluation: an adversary could submit an unchallengeable vouch immediately before close
- Any vouch with less than five minutes remaining resets the clock to five minutes
Endless outbidding: an adversary could repeatedly extend valuation
- Every bid must rise 10%, eventually crossing replacement cost and becoming profitable to yoink
Draw dodging: a depositor could withdraw after seeing a pending ticket
- Withdrawals remain locked against every ticket purchased before withdrawal
Late deposits: a new position could dilute or enter an already purchased ticket
- Each ticket can only draw positions active when it was purchased
Allowance overhang: every draw creates two buy allowances of $A$ $A$ , producing a large stock of latent purchase rights before the gate opens
- Preferable to the alternative of locking players into potentially poorly timed and high price-impact buys
Persistent appraisal premium: self-vouching may push $A$ $A$ toward the top of its enforceable band, lowering realised player RTP below 95.24%
- The protocol can tune $k$ , the minimum outbid, the yoink haircut, valuation timing, appraisal staleness, and the asset allowlist as market behaviour matures. If a premium persists, part of depositor yield can be redirected to players to return towards 95.24% RTP

Parameters#

Var	Definition	Initial value
$A$	Final appraisal	derived
$M$	Draw-weighted expected prize value	derived
$e$	Ticket surcharge	5%
$p$	Baseline depositor profit	3%
$b$	$ONG buyback share of appraisal	2%
$\alpha$	Draw exponent	0.9
$\beta$	Depositor revenue allocated to size premium	0.5%
$s$	Size-premium exponent	1.6
$EP$	Maximum exotic premium	2.5%
$E_{lower}$	Full-premium exotic ratio	50%
$E_{upper}$	Zero-premium exotic ratio	80%
$V_{ia}$	Opening vouch	$\geq VF_{min}$
$VF_{min}$	Minimum opening vouch	0.02 ETH
$k$	Vouch discovery rate	2.5%
$h$	Yoink haircut	1%
$T_s$	Appraisal lifetime	30 days
$T_l$	Minimum active deposit lock	7 days

Every constant is configurable. The initial values are hypotheses to be tested against real market behaviour.

Protocol actions#

Deposit ETH directly or submit an ERC20 or ERC721 for valuation
Vouch, outbid, or yoink during valuation
Buy and resolve tickets
Claim a drawn asset or accept a collection bid
Place or withdraw collection bids
Mark assets for withdrawal or revouch stale assets
Claim depositor revenue, launch $ONG rewards, or buy allowance