This is partially correct.

Lead Time solves the problem of people voting disproportionately to their skin in the game (e.g. you vote on something in bad faith and then immediately sell all your merits).

Merits *without* lead time (lead time == 0) can be transferred to other people who exist in the identity tree, so theoretically they could be sold if someone wants to buy them.

Merits *with* lead time greater than 0 cannot be transferred.

Votepower = merits * lead time. So merits that can vote cannot be transferred.

All merits recive payments, regardless of their lead time. Lead time does not affect payments (from revenue) in any way.