Estimates need to reflect reality. Some basic characteristics of what we need from estimates include:

• The estimates consistently reflect the capacity of the Team to deliver.
• The estimates consistently reflect the size of the work no matter what kind of work it is. For example, it should not matter that we are estimating a new feature or defects
• They are truly relative in that on a Team by Team basis an 8 is an 8 and an 8 is about 4 times a 2 no matter the source.
• Estimation data allows the use of ranges of estimates to help understand the risk profile of the work. A simple example of this is when the Product Owner uses best, average and worst velocities to understand what is likely to happen with their plan.

It is worth saying again:

They must be based on reality.