What is YieldBasis (YB)?

Deep Dive

1. Purpose & Value Proposition

YieldBasis addresses a core DeFi challenge: impermanent loss (IL) for volatile assets like Bitcoin. By integrating with Curve Finance, it allows users to deposit BTC/ETH and receive ybBTC/ybETH tokens. These represent leveraged positions where the protocol borrows crvUSD to create a 2x exposure, ensuring LP value tracks the underlying asset 1:1. This neutralizes IL while generating trading fees from Curve pools (YieldBasis Docs).

2. Technology & Architecture

The protocol uses a Collateralized Debt Position (CDP) model to borrow crvUSD against LP tokens. A specialized Rebalancing-AMM and VirtualPool architecture triggers arbitrage when asset prices move, restoring the 2x leverage ratio automatically. Users choose between two yield streams:
- Unstaked LPs: Earn trading fees directly.
- Staked LPs: Receive YB token emissions.
This dual-mechanism ensures passive yield without active management (CoinMarketCap).

3. Tokenomics & Governance

YB (1 billion max supply) powers protocol governance via veYB—locked tokens granting voting rights. veYB holders:
- Direct liquidity mining emissions to specific pools.
- Earn protocol fees through a dynamic model where fees rise as staking increases.
- Vote on upgrades, fee structures, and risk parameters.
Token allocations prioritize liquidity incentives (30%) and long-term ecosystem growth (Tokenomics).

Conclusion

YieldBasis redefines sustainable yield for volatile assets by merging leveraged liquidity with automated rebalancing—how will its fee-sharing model evolve as adoption scales?