How Chits Work

Chit Value

The prize money of the chit, basically the total value of the pot.

Chit Period

Typically equal to the number of months as the number of members in the chit.

Subscribers/Members

Users subscribing or joining a chit. They bid every month during the Chit Period for the Chit Value.

Organizers (StackUp Protocol)

  • StackUp Dapp registers different chits based on Chit Values and Members via smart contract
  • StackUp Protocol is on open-source smart contract on the Polygon BlockChain Network
  • This ensures StackUp is transparent and faster transaction settlement with better accessibility
  • Ex: A Chit Fund of Chit Value 5,000 USDT and 10 Members valid for a period of 10 months

Subscriptions

  • Based on the requirement, Users can subscribe to the chit by paying a token amount (USDT, generally 1 % of Chit Value) which is completely refundable after the first installment
  • Every month, the Chit Value is up for auction. At the time of the auction, whichever member bids the maximum discount gets to take home the prize money(Chit Value)
  • If maximum bid is 100 USDT, user will receive a total of 4900 USDT (5000-100 USDT). The discount amount is equally divided amongst users.

Collateral

  • Members have to pay the collateral (typically 120-130% of the Chit Value in popular crypto coins to pick up the Chit Value
  • The remaining members have to pay 500 USDT (5000 USDT/10) minus the dividend amount monthly.
  • Members also have an option to exit the Chit by trading their position with other users.
  • Ex: A Member can exit on 5th month by selling his position to another user, the new member will have an option to bid from next month onwards
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