> For the complete documentation index, see [llms.txt](https://docs.3jane.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.3jane.xyz/levered-callable-capital-lcc/mechanism/worked-example.md).

# Worked Example

```
ASSUMPTIONS (launch terms)

margin ratio       7.5%  (13.33x promise leverage)
promise APY        1.25% on the active promise
funding bonus      0.75% on funded capital, during the cooldown
underlying APY     3.5%
auction            30-min steps, each offering a further 0.84% of the unoffered margin
bidder hurdle      10%  (illustrative)
```

### 1. Alice stakes $75,000

* At the 7.5% margin ratio her margin backs a **$1,000,000 promise**: $75,000 ÷ 7.5%.
* She keeps custody of the unfunded $1,000,000; the facility holds only her margin.

### 2. Yield earned

* Underlying APY: 3.5% on $75,000 = **$2,625 / year**
* Promise APY: 1.25% on the $1,000,000 promise = **$12,500 / year**, 16.7% on margin
* Total: **≈ 20.2% APY on posted margin**

### 3. 3Jane calls 20% of the pool

* A new fintech facility executes, and 3Jane opens a capital call for 20% of active promises.
* Alice's obligation: **$200,000**, fundable over the 9-day funding window.

### 4a. She funds the call

* She delivers $200,000 USDC and receives **$200,000 of USD3 in a 35-day cooldown**, earning USD3 yield plus the funding bonus.
* $15,000 of margin releases back to her; her promise pays down to $800,000.
* Her remaining $60,000 of margin still earns **≈ 20.2% APY**: 3.5% base yield plus 1.25% on the $800,000 remaining promise, still 13.33x her margin.
* The $200,000 funded earns USD3 yield plus the 0.75% funding bonus while the cooldown runs, **≈ 8.75%** at the \~8% USD3 target.
* Day 35: the cooldown ends, the full amount unlocks, and the USD3 is redeemable to USDC through [USD3 liquidity](/usd3-susd3/liquidity.md).

### 4b. She misses a call

Suppose in a later epoch Alice has a **$50,000** obligation and fails to fund it.

1. **Slash.** Her full $75,000 margin moves into the auction pool. The shortfall is $50,000.
2. **Auction.** The offer ramps every 30 minutes, each step adding a further 0.84% of the not-yet-offered pool. A bidder holding out for a 10% return on the $50,000 fill needs a $5,000 award; the offer crosses that at step 9, about 4.5 hours in. The bidder fills the $50,000 for the $5,483 award, an 11% instant return, and the auction clears.
3. **Return.** The fill covered the whole shortfall, so everything except the award returns: Alice gets **$69,517** back as margin, with a ≈ $927,000 promise restored.

* Net cost of the miss: **$5,483**, the clearing award, about 7.3% of her margin and 11% of the missed amount, not the whole bond.
* Her position continues at $69,517 of margin backing a **≈ $927,000 promise**, earning the same ≈ 20.2% APY on the smaller base.
* A $500,000 miss against the same pool would ramp much deeper, clearing about 2.7 days in and awarding $50,158 of her margin; see [Backstop Bidders](/levered-callable-capital-lcc/mechanism/backstop-bidders.md).

### 5. She unstakes

* She requests an unstake, waits the 2-epoch unstake delay, and exits through the 20% per-epoch unstake capacity.
* Until her position exits she remains callable, and any call in that window must be funded.
* On exit she claims her remaining margin.

### Outcomes

| Participant                | Outcome                                                                             |
| -------------------------- | ----------------------------------------------------------------------------------- |
| Alice (funds her calls)    | \~20.2% APY on margin, plus USD3 yield and the funding bonus on the $200,000 funded |
| Alice (misses a $50k call) | Loses $5,483 of margin; the rest returns after the auction                          |
| 3Jane                      | $200,000 of promised capital delivered exactly when the facility executed           |
| Backstop bidder            | $50,000 of USD3 in cooldown plus $5,483 of margin for backstopping the miss         |