Staking
Also known as: backing, horse, stable
A backer funds a player's action in exchange for a share of profits, governed by markup, makeup, and a profit split.
Staking is an investment contract: a backer puts up some or all of a player's (the horse's) buy-ins; profits are split per a pre-agreed deal. It lets a horse play above their own bankroll and lets a backer monetize edge without playing. Three terms define every deal:
- Markup. The price premium on a piece of action. At 1.2x markup, a backer pays $1.20 per $1 of buy-in. It compensates the backer for the horse's ROI edge — a higher-ROI horse commands higher markup. The horse keeps the markup premium up front as compensation for their skill; the backer only profits if true ROI exceeds the markup.
- Makeup. Carried losses. If the horse loses, the deficit ("makeup") must be cleared from future winnings before the backer pays out profit. It aligns incentives but can trap a horse in a deep hole.
- Profit split. After makeup is cleared, profits divide per the agreed ratio (e.g. 50/50).
Markup must be priced honestly against the horse's true ROI and variance — overpriced markup is a losing investment for the backer even on a winning horse. The Staking tool computes piece pricing, makeup balances, and profit splits so both sides see the same math.
Example
A horse sells 50% of a $1,000 MTT package at 1.2x markup: a backer buying that 50% piece pays \(0.50 \times \$1{,}000 \times 1.2 = \$600\). If the package cashes for $3,000, the backer's share is \(0.50 \times \$3{,}000 = \$1{,}500\) (assuming no makeup), netting \(\$1{,}500 - \$600 = \$900\). The markup only pays off because the horse's true ROI clears the 20% premium over a large sample.