Understanding Asset States: Free vs Locked
Understanding Asset States on BitLease
Inside your BitLease wallets, assets exist in one of two states: Locked or Free. These states determine what you can do with an asset at any given moment.
The state of an asset changes depending on where it is in the contract lifecycle. Understanding this distinction helps you plan your settlements, withdrawals, and contract management effectively.
Locked assets
An asset becomes Locked the moment an LTO contract activates. When you pay your down payment and sign the contract, the asset is immediately placed into the Locked state inside your LTO Wallet.
A Locked asset has the following properties:
Non-transferable: You cannot send a Locked asset to another wallet address, internal or external.
Non-withdrawable: You cannot withdraw a Locked asset from the platform.
Under MPC custody: The asset is held in institutional-grade MPC (Multi-Party Computation) secured escrow via Fireblocks. Neither you nor BitLease can unilaterally move it.
Eligible for staking (optional): For supported Proof-of-Stake assets, you can enable LTO Staking Delegation. The asset remains Locked while staking — it does not become Free. The staking rewards generated, however, arrive as Free Assets.
Released only by settlement or termination: A Locked asset transitions to Free only when you complete Full Settlement, settle all installments, complete a Buyout, or the contract terminates.
Free assets
A Free asset is fully under your control. It sits in your LTO Wallet but is not bound by any contract.
Assets become Free in the following situations:
After Full Settlement or Scheduled Settlement: Once you complete all installments or pay the outstanding balance early, the leased asset transitions from Locked to Free. Formal on-chain ownership also transfers at this point.
Staking rewards: If you have LTO Staking Delegation enabled, the 80% rewards you receive arrive directly in the Free state inside your LTO Wallet. They are immediately withdrawable.
Surplus from Termination or Buyout: If your contract closes and the asset value exceeds what you owed at that moment, the surplus amount is returned to you as a Free Asset.
Incentives and cashback: Any reward credits applied to your account from the platform also arrive as Free Assets.
Free assets can be:
Used to pay installments directly
Transferred to your Funding Wallet
Withdrawn from the platform (once moved to the Funding Wallet)
The important rule about withdrawals
Assets can only be withdrawn from the Funding Wallet. If you want to withdraw a Free Asset from your LTO Wallet, you must first transfer it to your Funding Wallet, and then initiate the withdrawal from there.
Locked assets cannot be withdrawn through any path until they become Free.
Quick reference
Common Scenarios
Scenario 1: Need to Withdraw but Asset is Locked
Situation:
You need Bitcoin for an external payment, but your Bitcoin is locked in a contract with 6 months remaining.
Options:
Wait for contract completion.
Use available Free assets in the FUNDING Wallet.
Review early settlement options if available under your contract terms.
Scenario 2: Multiple Contracts Completing at Different Times
Each contract completes independently.
Outcome:
The specific asset changes from Locked to Free upon completion.
Other active contracts remain unaffected.
Scenario 3: Converting Free Asset to Start a New Contract
Situation:
You hold 2 ETH (Free) in the FUNDING Wallet and want to create a BTC contract.
Process:
Convert ETH to a supported stablecoin.
Use the stablecoin as a down payment.
BTC appears in the LTO Wallet (Locked).
Result:
FUNDING Wallet balance decreases.
LTO Wallet reflects the new Locked asset.
This guide ensures you understand asset states on BitLease, helping you manage your portfolio with confidence.