No.325
YieldBasis YB
the leverage alchemist that turns idle Bitcoin into steady fees
🎭 a Curve-born creature that doubles a BTC position to make impermanent loss cancel itself out
💬 “Lend out your Bitcoin and you get crumbs. Drop it in a normal pool and impermanent loss quietly skims you. So I double the position, hold it at exactly 2x, and watch that skim cancel to zero. Your BTC stays BTC, and the trading fees are yours.”
- What it is: a DeFi protocol that pays Bitcoin holders trading-fee yield without the usual impermanent loss.
- The trick: it borrows crvUSD to hold a constant 2x-leveraged BTC/crvUSD pool, and that exact 2x mathematically erases impermanent loss.
- Sep 26, 2025: mainnet went live with three small capped pools (WBTC, cbBTC, tBTC), built by Curve Finance's founder.
- YB token: a capped governance token, max 1 billion, steered by veYB vote-locking copied from Curve.
📖 The Story
If you hold Bitcoin and want it to earn something, your options are thin. Lending desks pay almost nothing. The other path, dropping your BTC into a trading pool to collect fees, comes with a hidden tax called impermanent loss: when the price moves, the pool quietly rebalances against you, and you can walk away with less than if you had just held. For years that tax was treated as the unavoidable cost of earning fees.
Early 2025. Michael Egorov, the person who built Curve Finance, started telling investors he had a way to make impermanent loss disappear for Bitcoin liquidity. The pitch raised roughly five million dollars at about a fifty-million-dollar valuation, and it was heavily oversubscribed. The idea sounded almost too tidy: hold the leverage of a pool at exactly two times, and the math term that represents impermanent loss falls out to nothing.
September 26, 2025. YieldBasis went live on mainnet. It opened cautiously, with three small pools wrapping Bitcoin (WBTC, cbBTC, and tBTC), each capped near a million dollars so the new machine could be watched under a low ceiling. Deposit BTC, receive a token called ybBTC, and behind the scenes the protocol borrows crvUSD and keeps your position levered at a steady 2x against a Curve pool. A rebalancer nudges it back whenever Bitcoin moves, so your exposure tracks BTC roughly one-to-one while the fees roll in.
A few weeks later the YB governance token reached the public through a Curve-style launch. It was never meant to be a coin you spend. It is the steering wheel: lock it as veYB and you help decide where the protocol points and you collect a cut of its fees. The alchemist had turned the oldest complaint in liquidity provision into a number that cancels.
📊 Stats
These are altrookie editorial ratings, not live data. How we score the codex →
🧩 How it works
You deposit Bitcoin and get back ybBTC, a receipt for your spot in the pool. To kill impermanent loss, the protocol borrows an equal value of crvUSD, a stablecoin from the Curve world, and uses it to hold your position at a constant 2x leverage on a BTC/crvUSD pool. A rebalancer keeps the debt at about half the value, so your exposure stays close to plain Bitcoin while the trading fees accumulate. You then pick one reward: real BTC-denominated fees, or YB token emissions, never both at once.
🌗 Light & Shadow
- Goes after a real, decade-old problem: it aims to give Bitcoin holders pool fees without the impermanent loss that normally eats LP returns
- Built by Curve Finance's founder on proven Curve plumbing, including crvUSD and the veCRV-style vote-escrow design
- The YB token is capped at 1 billion, so rewards are emitted from a fixed ceiling rather than printed forever
- The whole design leans on constant 2x leverage and borrowed crvUSD. If a rebalance lags in a violent move, or crvUSD wobbles, the loss can be very real (leverage cuts both ways)
- It is young and tiny. Mainnet only opened in September 2025 with pools capped near a million dollars each, so it has little history under stress
- LPs who take YB emissions instead of cash fees are paid in a governance token whose price can fall, which can quietly undo the yield they were chasing
🧬 Evolution lineage
Not a fork. YieldBasis is a spin-off of the Curve Finance ecosystem: same founder, built on Curve infrastructure, borrows crvUSD, and copies Curve's vote-escrow design (veCRV → veYB). Its closest relative is CRV / Curve Finance.
🧭 Meet other friends
❓ FAQ
- What is YieldBasis?
- A DeFi protocol that lets Bitcoin holders put their BTC into a trading pool and earn a share of the fees. Its trick is a constant 2x leverage on a BTC/crvUSD Curve pool, which cancels out impermanent loss, the hidden cost that usually eats away at a liquidity provider's returns.
- Who created YieldBasis?
- Michael Egorov, the founder of Curve Finance. YieldBasis is built on Curve's infrastructure, borrows Curve's crvUSD stablecoin, and copies Curve's vote-escrow governance (veCRV becomes veYB). The mainnet went live on September 26, 2025.
- Is YieldBasis its own blockchain?
- No. There is no YieldBasis chain. It is a set of smart contracts running on Ethereum (and on BNB Smart Chain), and YB is an ERC-20 governance token, not a coin with its own network.
- How many YB tokens will there ever be?
- The supply is capped at 1 billion YB. New tokens are emitted to liquidity providers who choose token rewards instead of cash fees, but the total can never pass that 1 billion ceiling.
⚠️ Not investment advice. All figures are for information only.