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Example in Real World

  • Adam has $10,000 deposited in a bank account, which is generating $1 in daily interest.
  • He has the option to "Upfront Stake" his entire $10,000 and immediately receive $365.
  • By doing so, Adam will still maintain complete control over his $10,000 and can reclaim it entirely after one year.
  • If he chooses to withdraw his $10,000 early, he can do so by repaying a gradually decreasing percentage of the $365.
  • Essentially, Adam has traded the future value of his money for upfront capital through Upfront Stake