Prize-linked savings account

Because of this, those falling in the low end of the economic distribution have the potential to see true growth of personal savings through the use of a PLSA.

Examples of prize-linked savings in cryptocurrency DeFi applications and Games include: Prize-linked savings accounts have also been offered in Argentina, Brazil, Canada, Colombia, Germany, Indonesia, Iran, Japan, Mexico, Oman, Pakistan, Spain, South Africa, Sri Lanka, Turkey, United Arab Emirates, and Venezuela.

[35] The success of the prize-linked savings account can be attributed to several concepts studied in the field of behavioral economics.

The misunderstanding of small probabilities also can be attributed to the success of prize-linked savings as it is nearly impossible for any individual to fathom odds in the millions as our day-to-day lives deal with quantities going no higher than a few thousand.

[38] Skewness also plays into the appeal of PLSAs as it is essentially the idea that there is some chance to win a big prize with possible odds that could be realized (although they are small).

[39] PLSAs are not very complex in their investment strategy and typically go for risk-averse vehicles, so they often require less effort and maintenance on behalf of the institution.

[39] Finally, PLSAs can maximize the liquidity of their consumers by denying those who frequently make withdrawals eligibility to win prizes.