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> We provide a rate of return on savings that on average is in-line with the top yielding savings accounts out there like Marcus or Ally. You might get a higher
by tych0 6y ago
> We provide a rate of return on savings that on average is in-line with the top yielding savings accounts out there like Marcus or Ally. You might get a higher return if you’re lucky and win more prizes than expected. You might get a lower return if you win fewer prizes than expected. Even in a worst case scenario where you never win a prize, you still have your savings.
Can you elaborate more on this? (Maybe you can't because of the SEC?) APY of Ally is 1.0% right now, vs. 0.20%, so are the expected value of winnings 0.8%?
- Jommi 6y agoAPY in most savings account changes quarterly so doing temporal comparisons does not have much bearing here.
- adammoelis 6y agoYeah fair point. Our all-in rate (base rate + prizes) will move with market cycles as well to match HYSAs
- adammoelis 6y agoYeah. Right now, the EV from prizes is actually higher than that. We are subsidizing to provide an even better value for early users. But in the long run, that's exactly right. The base rate plus prizes will be, on average, what you would earn in a vanilla but high yielding HYSA
- tych0 6y agoAnd can/will you disclose the difference? :D
- adammoelis 6y agoWe can and may do this sometime soon. The official rules has the prizes and odds laid out, so you could back into it with some math.
- Jommi 6y agoDid some quick excel sketching here: https://docs.google.com/spreadsheets/d/17t00LzdgRcC8dtVKnTwKxvP4GgiNuRqbYgP811LL19A/edit#gid=0 https://docs.google.com/spreadsheets/d/17t00LzdgRcC8dtVKnTwK... Odds from here: https://www.withyotta.com/official-rules https://www.withyotta.com/official-rules I might be completely wrong but looks like your estimate yield is heavily dependent of amount of other people saving as well. I bet the real model gets pretty damn interesting. Would love to get a closer look for sure. If you wanted to be a bit more "evil genius". It would be interesting if somehow the money in the grandprize grew based on how many people participated. This would give people incentive to join and lower the overall EV for everyone, but also give you guys more funds to manage :)
- lyrrad 6y agoA few errors in the spreadsheet: - Odds for the $0.20, $0.80 prizes are slightly off. - The $15 and below prizes are not split between participants, so one would not need to consider the number of other entries for winning those prizes. If one just considers the $15 and below prizes, I think the odds work out to about 3.2% per year, making it about a 3.4% expected interest total.
- Jommi 6y agoThanks so much!
- deleted 6y ago[deleted]