Comment by roelschroeven

Physics-based sounds perfectly fine to me.

"X-based" to me is equivalent with "based on X". Physics-based = based on physics, evidence-based = based on evidence, values-based = based on values; all perfectly fine.

Physically based feels correct in a sentence like "Our company is physically based in New York but we operate world-wide". But what does the "physically based" in "physically based rendering" mean?

But I'm not a native speaker, what do I know.