# Understanding Equity Events

{% hint style="info" %}
**Understanding Equity: Your slice of the pie.**\
\
Think of your Group like a delicious pizza. Each member owns a slice, and the bigger the slice, the bigger their ownership share.
{% endhint %}

**Member Equity:**

* When you contribute to the Group Vault during Group Deposits, you earn a slice based on your contribution and the Vault's value.
* Track your slice size (equity percentage) in the Member tab!
* Payouts or new members affect your slice size - it all gets recalculated to keep things fair.

**Two Ways to View Your Slice:**

* **Equity (%):** How much of the Vault you own compared to others (e.g., 20%).
* **Equity Value:** The value of your slice in ETH based on the total Vault value (e.g., 5 ETH).

**How We Calculate Your Slice:**

* It's like a recipe! We consider your contributions through Group Deposits, payouts, and the Vault's overall value. These are Equity Events that Lore tracks automatically, replacing what would have been a very complicated excel sheet.
* See a step-by-step example here!

{% hint style="info" %}
**Example: Alice Receives A Payout:**\
\
After Alice's payout, the equity distribution is then as follows:

* Alice: 33.3% \* 30 ETH + 0 ETH = 10 ETH; payout 10 ETH -> 0%
* Bob: 33.3% \* 30 ETH + 0 ETH = 10 ETH -> 40% 
* Charlie: 33.3% \* 30 ETH + 0 ETH = 10 ETH -> 40% 
* David: 0% \* 30 ETH + 5 ETH = 5 ETH -> 20%
  {% endhint %}

**Equity Changes Over Time:**

* Imagine the pizza grows in value - everyone's slice gets bigger! (Yay!)
* New members join? The pizza expands, and everyone gets a slightly smaller slice (but still delicious!). Although each slice is a bit smaller, everyone still owns a part of the Vault and benefits from its growth
* Members leave? Their slice goes back to the group, and everyone else's slice gets a little bigger.

This system ensures that **new members can join the Group as it grows** **while** **maintaining fairness** for existing members. Equity Events are at the heart of the Co-Ownership Framework. Everyone's ownership reflects their contribution, and as the Vault grows, everyone's slice grows as well.

{% hint style="success" %}
**Remember:**

* Equity ensures everyone gets a fair share based on their contributions.
* It changes dynamically to reflect the Vault's activity.
* We have the recipe down to a science, so you can focus on enjoying the Group pie!
  {% endhint %}


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