Lock-up Economics (Capital Efficiency)

Operator & jurisdiction: BASIS is operated by BASIS DIGITAL INFRASTRUCTURE LTD, a Seychelles-incorporated entity (LEI: 254900IX2F2KCWNSSS64).

Currency convention: Dashboard values may be displayed in USDT as an internal accounting and reference unit for USD-equivalent reporting. USDT is not a depositable or withdrawable asset on BASIS. Deposits and withdrawals use native tokens only: BTC, ETH, SOL, and PAXG.

Many products describe lock-ups as "bonus yield." Serious allocators should evaluate them through a measurable lens: capital efficiency.

BASIS explains lock-ups as a structural mechanism that improves deployable capital ratio under deterministic constraints.

1) Why lock-up can support higher efficiency

In a flexible pool, capital cannot be deployed at full utilization because:

• withdrawals may occur at any time

• the system must maintain a liquidity buffer

• part of the pool remains idle as operational reserve

If a flexible pool must keep 20-30% idle, even a strong strategy stack cannot continuously allocate the full capital base.

In a fixed lock-up pool, withdrawal timing is known in advance. This allows BASIS to:

• deploy capital more continuously

• allocate into strategies requiring a stable time horizon

• improve realized yield through lower idle balance and better execution precision

Lock-up yield should be understood as a redistribution of efficiency surplus, not as arbitrary bonus issuance.

2) A simplified model

Model variables

Variable	Meaning	Constraint
$C$	Total capital	-
$b$	Required buffer fraction	$0 \leq b \leq 1$
$r$	Realized strategy yield rate on deployed capital	-

Expected realized yield:

$$\text{Yield} \approx (1-b) \cdot C \cdot r$$

A lock-up reduces $b$, which increases deployed capital share and realized yield potential.

3) Why this is not automatically "more risky"

A lock-up does not inherently increase platform risk. In some cases, it can reduce specific failure modes:

• forced liquidation pressure during clustered withdrawals

• execution degradation caused by emergency unwinds

• opportunity loss caused by excessive liquidity buffers

What lock-up does add is user liquidity constraint: principal remains unavailable until the lock period ends.

For fixed pools on BASIS, unstaking is only available after the selected lock-up period has ended. Early exit is not supported.

Unstake is processed as full-position only. Partial unstake is not available.

4) What BASIS discloses for credibility

A credible lock-up system should clearly publish:

• available lock durations and booster rules

• whether adding stake resets the lock period

• how unstake and capital unwind are processed

• how the system behaves under internal risk-control states

• how rewards accrue and where they are credited

On BASIS, rewards accumulate in real time as the same stToken in the Staking Wallet.

5) Current fixed lock-up booster schedule

Lock-up period	Booster
14D	+10%
30D	+20%
90D	+50%
180D	+100% (2x)

Wallet model

• Funding Wallet: native tokens only (BTC, ETH, SOL, PAXG) for deposit and withdrawal

• Staking Wallet: stTokens only (stBTC, stETH, stSOL, stPAXG) for staking and reward accrual

Swap is same-token only at 1:1:

• BTC → stBTC

• ETH → stETH

• SOL → stSOL

• PAXG → stPAXG

Fees:

• Deposit: 0%

• Withdrawal: 0.05%

• Swap: 0.01%

6) Operational context

BASIS is designed around deterministic execution, mathematical constraints, and state-machine risk controls. Research and systems design are supported by Base58 Labs, with emphasis on structural alpha capture, execution precision, and controlled liquidity behavior.

BHLE infrastructure targets sub-50μs latency, 100K+ OPS, and proprietary routing for stable execution quality under load.

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Next: read Booster System.