Rising Tide

Earnings examples

Four illustrative cases turn the Rising Tide formula into money: a thin-pool model, a thick-pool model, a full month with four models, and what happens when you discount.

This page does one thing: it turns the three sentences of At a glance into numbers. All amounts are illustrative US dollars. Models are lettered and do not correspond to any real upstream discount. Parameters are the current values: 5% floor, 50% split, 3% loss provision.

Each case first computes the pool, then applies one formula:

pool       = usage revenue − upstream cost − usage revenue × 3%
floor      = usage revenue × 5%
your share = min(pool, max(floor, 50% × pool))     when pool > 0
           = 0                                     when pool ≤ 0

Case 1: thin pool, all yours

Model A's upstream discount is still shallow, so the margin is thin. The customer consumes 1,000 dollars this month.

ItemAmount
Usage revenue1,000
Upstream cost940
Loss provision (3%)30
Pool30
Floor (5%)50
Your share30
Praxis0

The pool of 30 is thinner than the floor of 50, so the whole pool goes to you and Praxis earns nothing. A thin-pool model is sold at zero margin: volume first, upstream discount once volume arrives.

Case 2: thick pool, split evenly

Model B's discount has been negotiated, so the margin is thick. The same customer consumes the same 1,000 dollars.

ItemAmount
Usage revenue1,000
Upstream cost800
Loss provision (3%)30
Pool170
Floor (5%)50
50% × pool85
Your share85
Praxis85

The pool of 170 exceeds 10% of usage revenue, so it is split 50/50 and you receive 85. On the same 1,000 dollars of usage, the thick-pool model pays you almost three times as much. The platform negotiated the discount; the even split is what you earned.

Case 3: one customer, four models, a full month

A real month mixes models. The customer consumes 9,000 dollars across four models.

ModelUsage revenueUpstream costLoss provisionPoolFloorBandYour sharePraxis
A2,0001,8806060100Thin600
B5,0004,000150850250Thick425425
C1,5001,3354512075Middle7545
D50052015−3525Negative0−35
Total9,000560435

Three things to read. First, each model has its own pool. Model D's negative pool pays no share, and no other model's positive pool fills it. A model like D is repriced or withdrawn. Second, model C sits in the middle band, with a pool of 120 between 5% (75) and 10% (150) of its usage revenue, so you take the floor of 75 and Praxis keeps 45. Third, the total of 560 is your share for the month, 6.2% of the customer's consumption.

Settlement holds back 10%:

ItemAmount
Share for the month560
Holdback (10%)56
Payable this period504
Holdback release56 after 90 days

Case 4: you discount for the customer

To win model B, you promise the customer another 5% off. The discount comes out of your share; the pool is unchanged.

ItemAmount
Usage revenue at the Praxis price5,000
Discount you promised (5%)250
Pool (unchanged)850
Your share (split)425
Your share after the discount175
Praxis425

This rule protects the price chain: the customer pays the same Praxis price through any channel. A discount is your business decision, and its cost is yours.

Four cases later, every rule has a number. The rules themselves are on the next page: Rules.

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