Understanding baskets
A Lots basket is a fixed recipe of 2–10 unique approved stock-token addresses. Its basket token represents specified quantities of every component. Those quantities are set when the recipe is created and do not rebalance as prices move.
From percentages to quantities
The standard creation flow asks for percentage weights and targets an initial reference value of $1 per whole basket token. Approved token-denominated prices convert those percentages into fixed quantities once.
This fictional example uses stock tokens X, Y and Z. Prices are made up for arithmetic, not current quotes or an approved asset list.
| Component | Target weight | Reference price per stock token | Fixed quantity per basket token | Initial value |
|---|---|---|---|---|
| X | 50% | $100 | 0.005 X | $0.50 |
| Y | 30% | $50 | 0.006 Y | $0.30 |
| Z | 20% | $20 | 0.010 Z | $0.20 |
| Total | 100% | — | Complete recipe | $1.00 |
The relation is quantity = target weight × initial basket value / component price. Actual token decimals introduce rounding, so the signing review must show the exact quantities, realized weights, realized value and reference time.
The advanced flow accepts exact quantities directly. It preserves those quantities even if their initial value differs from $1.
Fixed quantities mean drifting weights
Suppose X later rises to $200, while Y and Z stay at the example prices. One basket token still represents 0.005 X, 0.006 Y and 0.010 Z. It is now worth an indicative $1.50, with weights of about 66.67%, 20% and 13.33%.
Nothing sells X to restore its original 50% weight. Nothing buys Y or Z to compensate. The recipe is a fixed set of token units, not a continuously maintained percentage allocation.
The $1 value is therefore a starting reference for a new standard recipe, not a peg, guaranteed redemption price or reset rule. Reusing this basket at the later prices does not turn it back into a $1 basket.
One receipt, proportional component exposure
Ignoring atomic-unit rounding in this whole-token example:
| Basket tokens held | X redeemable | Y redeemable | Z redeemable |
|---|---|---|---|
| 100 | 0.5 | 0.6 | 1.0 |
| 120 | 0.6 | 0.72 | 1.2 |
| 80 | 0.4 | 0.48 | 0.8 |
More basket tokens means proportionally more of every component under healthy redemption. It does not necessarily mean a higher dollar value than at an earlier time.
What makes a basket the same basket?
Canonical recipe identity includes the chain, sorted component addresses, fixed quantities and vault semantics/version. Names, tickers and historical percentage labels are insufficient. Identical eligible recipes may reuse an existing basket.
For rotation, the requirement is stricter than visual similarity: both registered launches must point to the same registered basket vault address on the same chain. Two separate vaults showing the same recipe are not a supported rotation pair.
Always inspect addresses and exact quantities before relying on a familiar name. A token label is not proof of canonical identity.
Costs and limitations
There is no Lots protocol fee for basket minting or redemption and no basket-creator royalty. Gas, approvals, component purchases or sales, market fees and price impact can still cost money.
Healthy in-kind operations require actual components and transferable tokens. ETH routes also need executable component markets. Bundling, unbundling and recovery cover those differences.