For individual investors with limited funds, the annualized rate of return that ETH staking can bring is generally only about 5%, which is difficult to stimulate their investment interest. Their purpose of getting involved in the cryptocurrency market is often to seek higher returns. Asymetrix provides them with such an opportunity, that is, through a fair and transparent mechanism, all the returns of the pledgers are concentrated and distributed to a few lucky ones, so that they can obtain excess returns, while other pledgers only protect their principal and do not obtain any returns.
How the protocol works
Users deposit staked ETH (stETH) into a public pool backed by a smart contract. Once a user deposits to the Asymetrix protocol, the smart contract mints PST (Pool Share Token) at a 1:1 ratio and sends it to the user's wallet. PST tokens reflect the user's share in the protocol and are required for withdrawals. In the current version of the protocol, the minimum deposit amount is 0.1 stETH. However, deposits do not necessarily have to be multiples of 0.1 stETH (i.e. 0.11234 stETH is acceptable).
The public pool generates revenue every 24 hours; the revenue generated by the pool is randomly and asymmetrically distributed among the pool participants by the protocol regularly (currently once a week);
All users will receive an initial allocation of ASX tokens based on their percentage of the protocol’s TVL.
In case of winning, the user automatically receives a reward in the form of PST (equivalent amount of stETH), so the user's balance increases, which automatically increases the chances of further draws. Therefore, it is not necessary to claim the reward every time. It will be done automatically.
Calculation of the probability of winning
Since the protocol accumulates earnings over time, a fundamental metric is how long a user's stETH has been in the pool and how much earnings it has generated for the protocol. Otherwise, crypto whales may enter the protocol with large deposits at the last minute, gaining huge odds and "stealing" earnings from small users.
Therefore, the first metric that affects the odds is TWAB (Time Weighted Average Balance). This metric shows the user's contribution to the total pool revenue generated between draws. If the interval between two draws is one week, and a user stakes 100stETH in the pool for one week (i.e. 100% of the time), then its TWAB value is 100. The TWAB value determines the number of lottery tickets in the user's hand. The total number of lottery tickets is the TWAB value of all users in the pool / the minimum deposit number rounded. Users get the corresponding number of lottery tickets according to the proportion of their TWAB value to the total. After that, all lottery tickets will be hashed to obtain a unique id. The protocol sends a random number of the requested goods to CHainlink VRF, and modulos the returned random number to ensure that it is within the ticket number range. Once a random number that meets the requirements appears, it is matched with the lottery list to select the winner.
Governance
The protocol uses AXS tokens as governance tokens. By holding AXS tokens, users can participate in the governance process, where they can propose and vote on various parameters and policies that affect the operation and performance of the protocol. For example, users can decide how many users will receive a share of the proceeds from the weekly draw, how the proceeds will be distributed among them, how the funds of the protocol will be managed and distributed, and what other features or improvements should be implemented in the protocol.
Token value capture
The AXS token is supposed to be the governance token of the Asymetrix protocol and a tool to capture the value of the protocol's growth. However, from the current documentation, the protocol does not have a clear business model or fee structure, and does not charge any fees from the revenue generated by the protocol. This means that all profits from the protocol's revenue distribution go to users who deposit stETH into the protocol, and AXS token holders do not receive any rewards or dividends from the protocol's revenue. This also means that the AXS token has no strong demand or utility in the protocol, and its value depends entirely on speculation or governance participation.
Summarize
The protocol allows people who hold a small amount of ETH to join the exciting world of LSDfi, where they can enjoy high returns and randomness through asymmetric yield distribution. The protocol is also easy to use, as users only need to deposit stETH into the smart contract and wait for the weekly draw. However, there is still a lot of room for improvement in the token economics design of the protocol, as the ASX token does not have a clear value proposition or incentive mechanism to align the interests of users, developers, and governance participants.