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What is Yield Basis (YB)?
Quick Facts
- Token symbol: YB
- Blockchain: Ethereum (ERC-20), also on BNB Smart Chain
- Core purpose: Impermanent-loss-free liquidity provisioning
- Built on: Curve Finance infrastructure using crvUSD
- Governance model: ve-Tokenomics (veYB vote-escrow)
- Founded by: Michael Egorov, founder of Curve Finance
- TGE: October 2025
Introduction
Yield Basis is a DeFi protocol that solves one of the most persistent problems in decentralized finance: impermanent loss (IL). By applying a novel 2x compounding leverage mechanism, it allows liquidity providers to deposit assets like BTC and earn trading fees — without the value erosion that typically comes with AMM participation.
The protocol's native token, YB, powers governance, liquidity incentives, and revenue sharing across the ecosystem.
History & Background
Yield Basis was created by Michael Egorov, the founder of Curve Finance — one of the largest and most influential AMM protocols in DeFi. Drawing on deep expertise in AMM design, Egorov set out to re-engineer how liquidity positions behave when underlying asset prices move.
The project raised $5 million in early funding and completed its Token Generation Event (TGE) in October 2025, launching YB on major centralized and decentralized exchanges.
How Yield Basis Works
When a user deposits BTC, the protocol issues a ybBTC receipt token and automatically borrows an equal USD value of crvUSD stablecoin. Both assets are deposited into a Curve BTC/crvUSD pool, with the resulting LP token serving as collateral for the debt.
The system maintains a constant 2x leverage ratio (50% debt, 50% equity). A specialized 'Re-leverage AMM' and virtual pool architecture incentivizes arbitrageurs to restore this ratio whenever BTC's price moves — keeping the LP position tracking BTC's price 1:1. This design effectively eliminates impermanent loss while the position continues to earn trading fees.
Tokenomics
YB follows a next-generation ve-Tokenomics model inspired by Curve's veCRV system. Token utility is activated by locking YB into the vote-escrow contract, which mints veYB — an NFT representing time-weighted governance power.
Allocation categories include liquidity incentives (the largest share), team, ecosystem, and investors, all subject to multi-year vesting schedules. Emissions to stakers follow an exponential decay curve managed by a GaugeController contract, reducing sell pressure over time.
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Circulating supply
| 246.93 million YB |
|---|---|
| |
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Total supply
| 743.18 million YB |
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Max supply
| -- YB |
Ecosystem & Use Cases
- Liquidity provisioning: Deposit BTC or ETH, receive yield-bearing ybBTC or ybETH tokens
- Staking: Stake ybTokens to earn YB emissions
- Governance: Lock YB for veYB to vote on protocol parameters and gauge weights
- Revenue sharing: veYB holders receive a portion of protocol trading fees (admin fees) distributed weekly in ybBTC tokens
Team, Governance & Community
The protocol is led by Michael Egorov, whose track record with Curve Finance lends significant credibility. Governance is fully decentralized through the veYB system, where token holders vote on emissions allocation, protocol upgrades, and key parameters. Votes apply immediately with no epoch delay, giving active participants direct influence over incentive flows.
Advantages
- Eliminates impermanent loss for BTC and ETH liquidity providers
- Real yield generated from trading fees, not just token inflation
- Battle-tested infrastructure built on Curve Finance and crvUSD
- Aligned incentives through long-term ve-Tokenomics with multi-year vesting
- Founded by a proven DeFi builder with deep AMM expertise
Risks & Challenges
- Leverage risk: The 2x mechanism introduces smart contract complexity and potential liquidation edge cases
- Dependency on Curve: Protocol health is closely tied to Curve Finance's stability and crvUSD liquidity
- Early-stage adoption: Liquidity depth and TVL growth remain key metrics to watch
- Token unlock pressure: Vesting schedules mean ongoing token unlocks could affect market dynamics
Long-Term Vision
Yield Basis aims to become the standard infrastructure for productive liquidity in DeFi — enabling any holder of volatile assets like BTC or ETH to earn sustainable, fee-based yield without sacrificing price exposure. By making impermanent loss a solved problem, the protocol envisions a future where large holders and institutions can participate in AMM liquidity markets confidently and profitably.
Frequently Asked Questions
- What problem does Yield Basis solve?
Yield Basis solves impermanent loss (IL), a form of value erosion that affects liquidity providers in AMM pools when asset prices move. Its 2x compounding leverage mechanism keeps LP positions tracking the deposited asset 1:1, effectively eliminating IL.
- Who founded Yield Basis?
Yield Basis was founded by Michael Egorov, the creator of Curve Finance. His background in AMM design directly informs the protocol's core mechanics.
- What is veYB and how does it work?
veYB is the vote-escrowed form of the YB token, received when users lock YB for up to 4 years. It grants governance voting power and entitles holders to a share of protocol trading fees, distributed weekly.
- How do liquidity providers earn on Yield Basis?
Liquidity providers can earn in two ways: unstaked ybToken holders earn trading fees directly from pool activity, while staked ybToken holders receive YB token emissions. veYB holders additionally receive a portion of admin fees.
- What is ybBTC?
ybBTC is a yield-bearing receipt token issued when a user deposits BTC into Yield Basis. It represents a claim on a 2x leveraged BTC/crvUSD liquidity position on Curve Finance.
- What blockchain is YB on?
YB is primarily an Ethereum ERC-20 token, and is also available on BNB Smart Chain. The protocol's liquidity infrastructure runs on Curve Finance using crvUSD.
- How does the YB emission system work?
YB tokens are emitted to users who stake their YieldBasis LP tokens. The emission rate follows an exponential decay curve and is governed by a GaugeController contract, with veYB holders voting on how emissions are distributed across different liquidity pools.
- What are the main risks of using Yield Basis?
Key risks include smart contract complexity from the 2x leverage mechanism, dependency on Curve Finance's infrastructure, and ongoing token unlocks from vesting schedules that could create selling pressure.