What is Yieldbasis (YB)?

What Is Yieldbasis?

(Source: yieldbasis)

Yieldbasis is an innovative protocol developed by Michael Egorov, who founded Curve Finance. It enables users to deposit BTC or ETH into the protocol, earning steady transaction fees while providing liquidity through a unique automated leveraged AMM structure that completely eliminates impermanent loss.

For long-term BTC or ETH investors, Yieldbasis introduces a new way to earn fees without liquidating their holdings. The entire process is driven by smart contracts, ensuring transparency and self-balancing within the system.

Core Principles of Yieldbasis

The core innovation of Yieldbasis is Leveraged Liquidity (Double-Leveraged Liquidity), which designs liquidity pools with a 2× leverage structure. This mechanism allows LP positions to track BTC prices at a 1:1 ratio, eliminating impermanent loss. It achieves:

• Providing liquidity → No impermanent loss → Ongoing transaction fee earnings.

Process Overview

Yieldbasis provides a seamless user experience: deposit, earn returns, and exit anytime. The process includes:

1. Deposit BTC → Mint ybBTC

2. The protocol automatically borrows crvUSD and deposits it into the Curve pool

3. Holders of unstaked ybBTC can:

• Receive BTC transaction fee earnings
• Stake ybBTC to earn YB token rewards

4. To exit, burn ybBTC. The system will auto-liquidate, repay debt, and return BTC plus accrued interest.

The process is fully automated, with no need for manual leverage management or risk controls. Users only need to deposit BTC to benefit from automated leveraged yields and transaction fee sharing.

Yield and Revenue Sharing Mechanism

Yieldbasis’ primary source of yield is transaction fees from the Curve BTC/crvUSD pool. The protocol automatically allocates these fees among participants through a multi-layered, activity-driven incentive structure. The fee distribution rules are:

1. Unstaked ybBTC holders

Receive BTC fee sharing directly (after dynamic management fees). This method closely matches actual spot yield.

2. Staked ybBTC users

Do not receive direct BTC transaction fees, but instead get YB token rewards. This suits users who support long-term protocol growth and seek governance participation and value capture.

3. veYB holders

By vote-locking YB tokens, holders receive a share of dynamic management fees, along with governance rights and additional voting incentives.

The protocol distributes 50% of pool earnings as revenue share; the remaining 50% is used to maintain leverage balance and supplement liquidity. This cyclical design ensures long-term sustainability, strengthens liquidity stability, and enhances the intrinsic value of YB tokens.

Tokenomics

Yieldbasis’ native token, $YB, serves three core functions: governance, incentives, and fee distribution. YB token functions include:

1. Governance: Voting on protocol parameters, fee structures, and liquidity incentive strategies.

2. Fee Share: Vote-locking YB to become a veYB holder grants access to protocol fee sharing and governance rewards.

3. Staking Rewards: Staking ybBTC earns YB, incentivizing user retention.

Token Distribution

The YB token supply balances protocol growth, community incentives, and governance. Distribution is as follows:

• 30% for community incentives, rewarding liquidity providers, early adopters, and governance contributors. This drives protocol expansion.
• 25% for the team, rewarding core development and operations to ensure ongoing investment in R&D, security, and maintenance.
• 15% for the ecosystem reserve, supporting integration with other DeFi protocols, collaboration incentives, and cross-chain expansion to foster ecosystem growth and interoperability.
• 12.1% for investors, mainly strategic partners and capital backers who supported Yieldbasis at launch, recognizing their contributions.
• 7.5% for Curve technology licensing, compensating for underlying architecture and technology integration.
• 7.4% for the protocol development reserve, funding future upgrades and ecosystem expansion.
• 3% for voting and liquidity incentives, promoting governance participation and market liquidity for effective long-term decentralized operations.

This structure supports early development and ecosystem growth. It also returns more value to community participants and reflects Yieldbasis’ user- and liquidity-focused economic design.

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Conclusion

Yieldbasis unlocks dormant BTC assets and signals a new phase for DeFi yield mechanisms. Rather than relying on inflationary rewards or risky leverage, transaction fees become the core source of yield. For BTC and ETH holders, Yieldbasis delivers secure, stable, and decentralized earning opportunities—without altering asset exposure.