The lock period is a protective mechanism in the SVT protocol that prevents price manipulation while preserving the benefits of the Harberger tax system.
Specifically, it's a 24-hour window that begins immediately after buying an SVT or increasing its valuation (Val). During this window, special rules apply that make gaming strategies economically unviable.
Rules During the Lock Period
SVT valuation constraints:
- Val can only be raised, never lowered
- Minimum raise: +10% of current Val
- Each Val increase restarts the 24-hour timer
- SVTs can't be unheralded
Fee splits:
- During 24h of locking: 90% of royalties go to the DAO treasury, 10% go to the author
- After locking: 30% of royalties go to the DAO treasury, 70% go to the author
Why It Exists
Without the lock period, a herald could see an incoming purchase in the mempool, frontrun it by increasing their Val to block the buyer, then immediately drop it back down, all at near-zero cost. The lock period makes this attack expensive: if you spike your Val to block a buyer, you're stuck paying the elevated royalty for 24 hours. Repeat the trick a few times and the costs exceed any benefit.
The special 90% protocol fees during locking discourage authors self-buying to grief, since they'll lose almost all of the paid royalties.
After the Lock Period
Once 24 hours have passed (without a new Val increase resetting the timer):
- Val can be set to any amount at or above the floor (0.001 ETH)
- Standard fee split applies: 30% DAO / 70% author
- SVTs can be unheralded