Bloodspore Thrinax has at least one +1/+1 counter on it.
You control at least one additional creature that has a +1/+1 counter on it.
Steps
Activate Altar of Dementia by sacrificing another creature with a +1/+1 counter on it.
When the creature dies, Basri's Lieutenant's second ability triggers, creating a 2/2 Knight creature token that enters the battlefield with at least one +1/+1 counter due to Bloodspore Thrinax.
Resolve the Altar of Dementia ability, causing target player to mill cards equal to the sacrificed creature's power.