US/EST: 23 Jun 2021 14:59

STAKEBACK

32 posts, 14 voices


 
ndelapiedra
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12 years ago

there are all sorts of questions regarding stakeback, let’s use this thread to clarify.

This is how I described it in one of my events. If it helps, awesome, if not what is it missing/what is unclear that we can clarify to help it make sense.

PAYOUT/STAKEBACK EXPLANATION: Stakeback means that all investors are entitled to 100% of their buy-in before the player’s share. In other words, the split is on the PROFIT not the ‘returns’.

In practice it will work like this. When the event is over the bankroll is either above or below the original amount (obviously).

If bankroll is BELOW original amount. The ENTIRE remaining bankroll is redistributed to investors and none is retained by player.

If ABOVE original amount, 100% of original bankroll + 67% of profits are redistributed to investors and 33% of profits (and only profits) retained by player.

EXAMPLES:

50 shares @$10 sold = $500 collected = $500 original bankroll.

A) I enter 10 $10 tournaments and win nothing. = $400 FINAL bankroll. Each of the 50 shares returns $8 and the player keeps $0.

B) Enter 10 $10 tournaments and win $300. Final Bankroll is $700 (500 – 100 + 300). Profit is $200 ($700 Final – $500 original). Investors receive $10 per share PLUS $2.64 profit ($200×66% = investors share of profit divided by 50 shares) and player keeps $66 (33% of $200).

ndelapiedra
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12 years ago

PS: (and this is entirely my personal opinion so don’t be shy about disagreeing, I may be wrong on this).

I think stakeback on 1 tournament events is rather pointless and frankly an excuse to charge a higher %. The purpose of stakeback is to protect the original investment and only pay the player on profit. Yet, a min cash will ALWAYS cover the buyin (except the odd rebuy MTT). So unless the player has already set a very high %, you are getting your money back.

in MULTIPLE tourny events, it can be crucial because the original amount may not be met by a single cash. In this case, the player has to redistribute the entire amount ‘won’ and keeps nothing up until he is making a profit for his backers.

aussiedave9
aussiedave9 18 points
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12 years ago

Agree ndelapiedra.

Also wondering if it’s possible for the admin to ad a feature for this? Would make things easier to calculate for the seller. Might be a bit difficult though.

checkout
checkout 89 points
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12 years ago

Nate: thanks for posting. I also agree that stakeback should be limited to multi event customs. Good luck to all

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jconnor
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almost 12 years ago

ok so i’m looking at this stakeback thing and looking at how to code it.

let me see if i’ve got it right:

Scenario: You have a $100 event you want to play, you sell 5 shares of 10% each for $10 each that all sell.

1. You end up winning $200
— in this case the winnings are more than the event cost so each buyer just gets 10% of the winnings, i.e. $20 each
— Not using stakeback they would have just got 10% of $200, i.e. $20 (so stakeback or not with winning events makes no difference)

2. You end up ‘winning’ $40 (i.e. you lose $60)
— in this case where the ‘winnings’ are less than the amount raised. In this case each of the 5 buyers gets $40/5 = $8 back.
— The seller gets to keep nothing.
— Not using stakeback each buyer would have got 10% of $40, i.e. $4 each and the seller would have kept $20 themselves

3. You end up ‘winning’ $60 (i.e. you lose $40)
— in this case where the ‘winnings’ are less than the total amount ($100) but more than the amount raised from investors ($50). In this case each of the 5 buyers gets their buyin back (i.e. 5x$10=$50), which leaves $10 to be distributed. Each of the buyers gets 10% of $10, i.e. $1 each. In total each buyer gets $10 + $1 = $11 back
— Not using stakeback each buyer would have got 10% of $60, i.e. $6 each and the seller would have kept $30 themselves

TBH. I think this is a much more complicated system then just having straight out shares that we have now. The difference to me is that these are like ‘shares’ and the seller’s own shares are worth less than external buyer shares. I’d say a better way to do it is offer your shares at lower percentages (i.e. 115% vs 130%) – the effect is similar. I also think there are probably a number of variations on this that could be used, which will make it even more complicated.

Note: i’ve looked at rwestover’s spread sheet, but i don’t get the correct results for scenario 2 above. In that case rwestover’s spreadsheet said to pay out $4 per share but $4×5 shares is only $20 and there was $40 to distribute.

vicy8
vicy8 117 points
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almost 12 years ago

This is how stakeback works.

Let A = % of profit backer receives per share
Let B = % of initial buyin that each share costs
Let C = Total money needed to play event
Let D = Amount of money cashed in the event

If (D < C), then each share gets B * D
else each share receives B * C + [A * (D – C)]

SNB
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almost 12 years ago

I didn’t read this, but if Ndel’s formula involves keeping everything, I don’t like it as a buyer.

Sizzlrer
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almost 12 years ago

1.In vicy8 example where D < C unless B(% of initial buyin that each share costs)=100% then seller receives a part of D(Amount of money cashed in the event) ie no stakeback. It should be D divided by number of shares issued. A makes no sense since tbe backer has no shares (excluding shares not sold which are treated the same as buyers).B needs to be further defined.

2. JC is using a simplistic approach that buyers and seller put 50% in each. There ia a growing trend to see P/V of > 150% so stakeback even in single events is a good selling point. Also he does not show how stackback affects payout when a profit is actually made on the event.

If the above does not make any sense ignore or leave a comment. lol I won’t be offended as stackback means different things to different people.

kickyourace
kickyourace 493 points
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almost 12 years ago

Strippers, LOL. I can’t stop laughing.

DwayneStacey
DwayneStacey 230 points
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almost 12 years ago

Ok, my 2 cents.
The way I see it for stakeback.
All money won upto original stake are returned to stakers.
All money won above original stake is then shared as per stated split. i.e 70-30.
I believe that it is this simple

kickyourace
kickyourace 493 points
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almost 12 years ago

So easy is what it is Sizzlrer. Simple really. Look. Backer gets paid back before the player does if there isn’t enough profit in the deal. It comes up on bubble cashes and multievents where you asked for $500.00. Got backed and didn’t win enough to cover the 500. backers get back what ever they put in based on the winnings. Win 250 and that 250 gets chopped up among the backers. If you paid for yourself in the event, and wound up having to cover 10 shares, you pay yourself back. Deciding if you are offering stakeback is certainly up to you and depending on the player, deciding to back you if you want the backing becomes a point of discussion.

kickyourace
kickyourace 493 points
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almost 12 years ago

Dwayne, can’t you make a very simple question hard. Everyone else seems to be trying.

jconnor
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almost 12 years ago
This post is hidden
Reason: Other
Comment: jconnor stating a wrong formula - lets not get it more complicated :)


post modified almost 12 years ago

DwayneStacey
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almost 12 years ago
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Comment: related to jconnor wrong post


post modified almost 12 years ago

DwayneStacey
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almost 12 years ago

this is my opion of stakeback.
buyer gets upto their original stake back first.
player gets upto their original buy-in second.
profit shared as per share value third.

themango69
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almost 12 years ago

I think jconnor’s formula makes sense more than vicy’s as the numbers come out right in those examples (vicy got him on the right track though). I think we need to bang this formula off of tons of examples to prove that it works everytime (when a loss has occurred, refunds for whatever reason, etc). It needs to be idiot proof as well (for people like me), so when we complete an event we should only have to fill in total amount “won” (which would be any amount won + leftover money from stakebacks, cancellations, etc) and then then the site does the calculation for us.

jconnor
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almost 12 years ago

Sizzler: concerning this

If you have a $100 event selling 10% shares for $15 and you sell only one share.
You win $20 (i.e. lose $80)

According to vicy8’s formula, you do B*D or 10%*$20 = $2

According to sizzler’s formula, you do $20/10(?) = $2

Hold on are these the same thing? :) :)


The other difficult thing is that in the above example where $20 is ‘won’ a lot of people would say ‘stakeback means that one buyer gets their $15 back first’, in this case the seller would get $5.

In this example there are basically 10 shares, 9 seller shares and 1 buyer share.

Its a question whether or not the seller shares rank the same as the buyer share – if they do, its not really ‘stakeback’, but if they don’t you end up with the 1 buyer getting their $15 back and the seller only receiving $5 even tho they spent $85 to buy into the event.

I’m leaning towards implementing vicy8’s or sizzler’s formula.. Any opinions?



post modified almost 12 years ago

themango69
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almost 12 years ago

I am pretty sure that a buyer share is the same as a seller share in regards to stakeback as it wouldn’t make sense that a buyer gets their money back before you do as you have also risked. IMO – Stakeback in common terms just means that the seller isn’t making ANY profit (keyword profit) before all investors get their investment back (including yourself as an investor if you have shares). Please correct me if I’m wrong guys…

vicy8
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almost 12 years ago

“Let A = % of profit backer receives per share
Let B = % of initial buyin that each share costs
Let C = Total money needed to play event
Let D = Amount of money cashed in the event

If (D < C), then each share gets B * D
else each share receives B * C + [A * (D – C)]"

In regards to sizzlrer post, if B < 100% of initial buyin, then the player SHOULD get some of the money cashed even if D < C. It’s seriously not that complicated. It should just be a few lines of code. There shouldn’t be any creating of some new crazy data structures to account for this and that. It’s as simple as what I wrote.

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vitobiggs
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almost 12 years ago

I agree with Mango, stakeback should be split evenly to all who put up a stake including the player if he invested some of his own money. Once everybody, including the player, gets thier initial investment back (even distribution per share), then you split the profits per the agreement.

^Also agree with vicy ^ Looks like it should be easy.

jconnor
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almost 12 years ago

OK, i know this should be simple (lots of people have told me :)), but i’m going to write out my understanding to make sure everyone’s on the same page.
From what i’ve seen there is a lot of different ideas people have how stakeback should work, and in most cases its simple to work out but there are some

tricky situations.

After doing the scenarios below, i’m pretty convinced vicy8’s formula is correct. I’m sure there will be confusion though :)

To me, the tricky situation is like Scenario 2 below, where the player cashes for more than the buy-in but because he sold his shares at >100% price/value has to pay more out to the buyers than was won. E.g. $100 event, you win $120, but have to pay out more than $120 to your backers – the seller still ends up in front as they collected more than the $100 buyin cost.

In any case I think this is the best way to implement Stakeback but I do think people (esp. sellers) will get confused when they have to pay out more than what they won in an event.

Vicy8’s Formula:j
Let A = % of profit backer receives per share
Let B = % of initial buyin that each share costs
Let C = Total money needed to play event
Let D = Amount of money cashed in the event

If (D < C), then each share gets B * D
else each share receives B * C + [A * (D – C)]

Scenario 1

  • $100 event
  • 10% shares sold @ 150% for $15 each
  • 4 shares sold so $60 collected
  • $120 won

A = 10%
B = 15%
C = $100
D = $120

In this case D > C so use the second formula: B * C + [A * (D – C)]
→ 15%*$100 + [10% * ($120 – $100)]
→ $15 + (10% * $20)
→ $15 + $2
→ $17
So four shares get paid out at $17 ($68).
The remaining money $52 goes to the seller

Scenario 2

  • $100 event
  • 10% shares sold @ 150% for $15 each
  • 9 shares sold so $135 collected
  • $120 won

A = 10%
B = 15%
C = $100
D = $120

In this case D > C so use the second formula: B * C + [A * (D – C)]
→ 15%*$100 + [10% * ($120 – $100)]
→ $15 + (10% * $20)
→ $15 + $2
→ $17
So nine shares get paid out at $17 ($153).
In this scenario only $120 was “won”, so the seller has to pay out an additional $33. But note, as the shares were sold at 150% the seller actually collected

$135 for a $100 event. So the seller actually ends up $2 in front.

Scenario 3

  • $100 event
  • 10% shares sold @ 150% for $15 each
  • 9 shares sold so $135 collected
  • $20 won

A = 10%
B = 15%
C = $100
D = $20

In this case D < C so use the first formula: B * D
→ 15% * $20
→ $3

So nine shares get paid out at $3 ($27).
In this scenario only $20 was “won”, so the seller has to pay out an additional $7. But note, as the shares were sold at 150% the seller actually collected

$135 for a $100 event. So the seller actually ends up $28 in front.

Scenario 4

  • $100 event
  • 10% shares sold @ 100% for $10 each
  • 9 shares sold so $90 collected
  • $20 won

A = 10%
B = 10%
C = $100
D = $20

In this case D < C so use the first formula: B * D
→ 10% * $20
→ $2

So nine shares get paid out at $2 ($18).
In this scenario only $20 was “won”, each share recevies $2 back.

Scenario 5

  • $100 event
  • 10% shares sold @ 110% for $11 each
  • 3 shares sold so $33 collected
  • $90 won

A = 10%
B = 11%
C = $100
D = $90

In this case D < C so use the first formula: B * D
→ 11% * $90
→ $9.90

So three shares get paid out at $9.90 ($29.70). Seller gets to keep $60.30

Scenario 6

  • $100 event
  • 10% shares sold @ 150% for $15 each
  • 7 shares sold so $105 collected
  • $120 won

A = 10%
B = 15%
C = $100
D = $120

In this case D > C so use the second formula: B * C + [A * (D – C)]
→ 15%*$100 + [10% * ($120-$100)]
→ $15 + [10% * $20]
→ $17

So seven shares get paid out at $17 ($119). Seller gets to keep $120-$119 = $1. But note the seller also raised $105 for a $100 event, so is ahead another

$5.

Scenario 7

  • $100 event
  • 10% shares sold @ 150% for $15 each
  • 7 shares sold so $105 collected
  • $190 won

A = 10%
B = 15%
C = $100
D = $190

In this case D > C so use the second formula: B * C + [A * (D – C)]
→ 15%*$100 + [10% * ($190-$100)]
→ $15 + [10% * $90]
→ $24

So seven shares get paid out at $24 ($168). Seller gets to keep $190-$168 = $22. But note the seller also raised $105 for a $100 event, so is ahead another

$5.

Scenario 8

  • $100 event
  • 10% shares sold @ 150% for $15 each
  • 9 shares sold so $135 collected
  • $190 won

A = 10%
B = 15%
C = $100
D = $190

In this case D > C so use the second formula: B * C + [A * (D – C)]
→ 15%*$100 + [10% * ($190-$100)]
→ $15 + [10% * $90]
→ $24

So nine shares get paid out at $24 ($216). Seller has to chip in another $26, but really raised $135 for a $100 event, so is $35-$26=$9 ahead.

kickyourace
kickyourace 493 points
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almost 12 years ago

Scenario 2

$100 event
10% shares sold @ 150% for $15 each
9 shares sold so $135 collected
$120 won
A = 10%
B = 15%
C = $100
D = $120

In this case D > C so use the second formula: B * C + [A * (D – C)]
→ 15%*$100 + [10% * ($120 – $100)]
→ $15 + (10% * $20)
→ $15 + $2
→ $17
So nine shares get paid out at $17 ($153).
In this scenario only $120 was "won"�, so the seller has to pay out an additional $33. But note, as the shares were sold at 150% the seller actually collected

$135 for a $100 event. So the seller actually ends up $2 in front.

I’m confused about how a 100 dollar event gets sold for $135?

jconnor
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almost 12 years ago

The $100 was the buyin for the event. Each share was sold at 150% price/value. i.e. each 10% share was sold for $15 and 9 shares were sold (9*$15 = $135).



post modified almost 12 years ago

vitobiggs
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almost 12 years ago

Sign me up for the ones where you sell more than the event buy-in :)

Seriously though, I’ve never seen anybody collect more than the buy in, that just doesn’t make sense to me.

themango69
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almost 12 years ago

Vito – I have seen people do it before, usually it’s a small amount of money but I have seen it as Rwest has made comments to people’s events saying something sarcastic about “must be nice to know you put up event for free and still make money”.

Rwest – can you look at all of Jconnor’s scenarios and make sure they are all correct as you seem to understand as good as anyone on here?