> ## Documentation Index
> Fetch the complete documentation index at: https://docs.fade.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Rewards with upside

> Cashback, staking rewards and points can take a shot instead of a flat amount.

## What the user sees

> **Your cashback**
> Take 2.00 USDC, or a 1 in 10 chance at 19.30 USDC.

Or: "Put 10 % of your staking rewards on a multiplier."

The user picks. When they take the shot, the payout is guaranteed by the pool, not by a marketing budget that might run out.

## The arithmetic

A 2.00 USDC cashback becomes a stake on a two-outcome paytable at a 3.5 % declared edge:

| Outcome | `p` (billionths) | `m` (bps) | Pays |
| - | - | - | - |
| Win | 100 000 000 (10 %) | 96 500 (9.65×) | 19.30 USDC |
| Nothing | 900 000 000 | 0 | 0 |

`Σ p·m = 100 000 000 × 96 500 = 9 650 × 1e9`: exactly a 3.5 % edge. The liability is 17.30 USDC, which an idle pool carries from about 1 200 USDC of assets.

A paytable does not have to be all or nothing. Three tiers keep a small floor for most users and a larger prize for a few:

| Outcome | `p` | `m` | Contribution |
| - | - | - | - |
| Boost | 50 000 000 (5 %) | 100 000 (10×) | 0.500 |
| Most back | 450 000 000 (45 %) | 9 000 (0.9×) | 0.405 |
| Some back | 500 000 000 (50 %) | 1 200 (0.12×) | 0.060 |
| | 1 000 000 000 | | 0.965, a 3.5 % edge |

Every tier that pays less than 1× is what makes room for the larger prize: if every outcome paid at least the stake back, the expected return would exceed 1 and the program would refuse the paytable.

## Who integrates

* Loyalty and cashback programs.
* Wallets.
* Validators and liquid staking protocols.
* DeFi apps that distribute yield.

## Who funds the stake

| Variant | Stake funded by | Typical reading |
| - | - | - |
| "Free spin" on top of the reward | The program's own budget | A promotion |
| The user converts their own reward | The user | A wager |

## How it is wired

The rewards program is the app. If the user signs, `stakeOwner` is the user and `stakeSource` is the user's USDC account holding the reward. If the program holds the rewards and stakes on the user's behalf, it signs as `stakeOwner` and names the user's account as `beneficiary`.

<Warning>
  Prize-linked payouts are subject to local gaming and promotion law. Whether a reward with upside is a promotion or a wager depends on who funds the stake and on the market.
</Warning>


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