Understanding Asset States: Free vs Locked

Every asset in your Bitlease account has a state. This state determines what operations are available. Two states exist: Free and Locked.

Understanding these states prevents confusion and sets correct expectations.

Why States Exist

Asset states provide immediate clarity. When you see "Free" you know the asset is available within platform permissions. When you see "Locked" you know a contract is active.

This is not merely an access control mechanism. It is a structural information architecture. The state indicates the asset's contractual condition.

Free State

Definition

Free means available and not involved in any active contract. No contractual restrictions apply.

Where Free Assets Appear

FUNDING Wallet:
All assets in FUNDING wallet are Free.

LTO Wallet (Post-Completion):
After contract completion, assets in LTO wallet change to Free status.

Operations Available

Free assets support standard platform operations:

Withdraw
Send to external addresses subject to platform policies and compliance procedures.

Trade
If platform trading features are available, Free assets may be traded.

Convert
Exchange one cryptocurrency for another within the supported platform functionality.

Use in New Contracts
Free assets may be used as down payments for new LTO contracts.

Transfer Internally
Move between FUNDING and LTO wallets where applicable.

Hold
Remain in custody without any action.

Visual Indicators

The platform displays "Free" status next to asset amounts. This indicates availability.

Locked State

Definition

Locked means the asset is involved in an active contract. The asset supports the payment structure for an LTO agreement.

Where Locked Assets Appear

LTO Wallet Only:
Locked assets exist in the LTO wallet during active contracts.

Why Assets Lock

Contract Integrity:
The locked asset ensures contractual continuity during the payment period.

Payment Structure:
Installment payments progressively build equity in the locked asset. The asset remains stable within the contract framework.

Ownership Transfer:
Ownership transfers after full payment according to contract terms. The asset remains identifiable and contract-bound during this period.

Locking is structural to the contract model.

Operations Available

View Value
Monitor current market value.

Track Contract
See equity percentage, remaining payments, and completion date.

Make Payments
Installments may use stablecoins from either wallet according to payment priority rules.

Economic Participation
Market price movement is reflected in your economic position.

Operations Not Available

Cannot Withdraw
The asset cannot leave custody during an active contract.

Cannot Trade
Locked assets cannot be sold or converted.

Cannot Transfer
Locked assets cannot move to FUNDING wallet or to other users.

Cannot Use in Other Contracts
Locked assets cannot be used in additional features.

Visual Indicators

The platform displays "Locked" status along with contract reference details, such as:

Contract ID
Completion date
Current equity percentage

State Transitions

Free → Locked (Contract Creation)

Trigger:
You create an LTO contract.

Before:

FUNDING wallet: $30,000 USDT (Free)
LTO wallet: Empty

You Create:
Contract for 1 BTC, 35% down ($23,800)

After:

FUNDING wallet: $6,200 USDT (Free)
LTO wallet: 1 BTC (Locked)

Explanation:
The down payment left the FUNDING wallet. The contracted BTC appeared in the LTO wallet with Locked status.

Locked → Free (Contract Completion)

Trigger:
Your final installment processes successfully.

Before:

LTO wallet: 1 BTC (Locked)

After Final Payment:

LTO wallet: 1 BTC (Free)
Contract: Completed

Explanation:
The asset remained in the LTO wallet. Its status changed from Locked to Free. Full control is activated according to platform policies.

No Other Transitions

Assets cannot:

Move from Locked to Free without completing or settling the contract
Move from Free to Locked without activating a contract
Exist outside defined states

Every asset is either Free or Locked.

Multiple Assets in Different States

You can hold multiple assets in different states simultaneously.

Example Portfolio:

FUNDING Wallet:
5,000 USDT (Free)
2 ETH (Free)

LTO Wallet:
0.5 BTC (Locked - Contract 1, 8 months remaining)
5 ETH (Locked - Contract 2, 15 months remaining)
0.3 BTC (Free - previous contract completed)

Each contract operates independently. Free assets remain separate from contract-bound assets.

Understanding Economic Value During Lock

Value Participation vs Control

Locked assets create a distinction:

Economic Participation:
Market price movement is reflected in your economic position during the contract.

Transfer Control:
Withdrawal and transfer rights activate only after the asset becomes Free.

This represents a temporary separation of value participation and transfer control.

Comparison:

Traditional Ownership:
Value participation and control exist simultaneously.

Locked Asset:
Value participation exists. Transfer control is restricted until completion.

Rental:
Neither value participation nor ownership transfers.

LTO separates participation and control during the contract period.

State and Contract Terms

Lock Duration Matches Contract

Asset remains locked for the contract duration.

6-month contract → 6 months locked
12-month contract → 12 months locked
24-month contract → 24 months locked

Unlock timing is defined at contract creation.

Early Unlock

Standard contracts require completion of all payment obligations before unlocking.

Some contracts may include:

Early settlement options
Defined termination mechanisms

Review your specific contract terms.

Termination Impact

If a contract terminates before completion:

You retain payment history and any rights defined in the contract terms.

Ownership does not transfer without full payment.

Asset status changes according to contract provisions and platform policy.

Completion of contractual obligations is required for ownership transfer.

State Visibility

Dashboard Indicators

Your dashboard shows:

Total Balance:
Combined value of Free and Locked assets.

Available Balance:
Value of Free assets only.

Locked Balance:
Value of assets in active contracts.

Example:

Total: $85,000
Available: $15,000
Locked: $70,000

This distinguishes accessible assets from contract-bound assets.

Wallet View

Each wallet displays asset states clearly.

FUNDING Wallet:
5,000 USDT (Free)
2 ETH (Free)

LTO Wallet:
1 BTC (Locked - Contract #12345)
0.3 BTC (Free)

Labeling prevents operations on contract-bound assets.

Common Scenarios

Scenario 1: Need to Withdraw but Asset is Locked

Situation:
You need Bitcoin for an external payment. Your Bitcoin is locked in a contract with 6 months remaining.

Options:

Wait for contract completion.
Use available Free assets in FUNDING wallet.
Review early settlement options if available under contract terms.

Locked assets cannot be withdrawn during an active contract.

Scenario 2: Multiple Contracts Completing at Different Times

Each contract completes independently.

Upon completion:

The specific asset changes from Locked to Free.
Other active contracts remain unaffected.

Unlocking occurs per contract, not collectively.

Scenario 3: Converting Free Asset to Start New Contract

Situation:
You hold 2 ETH (Free) in FUNDING wallet and want to create a BTC contract.

Process:

Convert ETH to a supported stablecoin.
Use a stablecoin as a down payment.
BTC appears in LTO wallet (Locked).

Result:

FUNDING wallet balance decreases.
LTO wallet reflects the new Locked asset.

Free assets enable new contracts. Locked assets do not.