Summary:
YieldBasis (YB) was created with a clear mission — to redefine liquidity provision. It allows users to provide assets such as BTC or ETH as liquidity while earning fees and returns, all with controlled or even eliminated impermanent loss. The protocol achieves this through leveraged liquidity pools, automated rebalancing, and tokenized positions.
TL;DR
- YieldBasis (YB) is a DeFi protocol designed to offer leveraged liquidity exposure for BTC/ETH pairs while minimizing impermanent loss.
- Liquidity positions are tokenized into yield-bearing assets like ybBTC or ybETH, which utilize leverage and auto-rebalancing to keep LP losses minimal even during volatile price movements.
- The YB token serves as the backbone of the ecosystem — powering rewards, governance, and fee distribution.
1.Background: The Problem with Traditional AMMs
In conventional AMM (Automated Market Maker) models, liquidity providers (LPs) face a persistent challenge — impermanent loss. Whenever prices of paired assets diverge, LP portfolios suffer due to passive rebalancing within the pool.To compensate, many protocols have relied on high emission rewards — a model that’s often unsustainable.
YieldBasis aims to change this dynamic. By combining trading fee revenue with leveraged yield opportunities, it seeks to significantly reduce or neutralize impermanent loss for LPs.
2.What Is YieldBasis?
YieldBasis is a DeFi protocol reportedly co-founded by one of Curve’s creators (Michael Egorov and others). Its goal is straightforward: enable BTC and ETH holders to provide liquidity with minimal impermanent loss and enhanced returns.
The protocol introduces a mechanism that tokenizes LP positions into ybBTC, ybETH, and similar yield-bearing assets. These positions utilize 2× leverage and automatic rebalancing to keep portfolio exposure closer to the actual asset price path — avoiding the inefficiency of the traditional AMM’s √p curve.
Users not only earn trading fees from liquidity provision but can also stake these positions for additional rewards and governance rights.
In essence, YieldBasis operates as a “leveraged liquidity protocol with impermanent loss mitigation,” using crvUSD as borrowed capital and maintaining a 200% over-collateralization ratio to stabilize the leveraged position.
3.YieldBasis vs. YB: What’s the Difference?
YieldBasis refers to the entire DeFi protocol — its mechanisms, pools, and ecosystem design.YB is the protocol’s native token, used for governance, incentives, and fee sharing.
4.The Problems YieldBasis Solves
- Impermanent Loss: Traditional AMMs force LPs to rebalance assets as prices change, often underperforming single-asset holding. YieldBasis combats this with leverage and dynamic rebalancing.
- Low Capital Efficiency: Idle liquidity earns little in low-volume periods. YieldBasis’ leveraged design and tokenized LP assets maximize capital utilization.
- Fragmented Liquidity:BTC and ETH liquidity in DeFi is scattered. YieldBasis aims to be the central liquidity gateway for blue-chip assets.
- Weak Governance Participation: Many protocols separate liquidity providers from decision-making. YieldBasis integrates the YB/veYB model, aligning LPs, token holders, and governance participants.
5.The Core Mechanisms of YieldBasis
5.1 Leveraged & Auto-Rebalancing Pools
The protocol borrows crvUSD to create a 2× leveraged liquidity position, effectively “squaring” the √p exposure curve and theoretically eliminating impermanent loss.It continuously monitors pool health and automatically rebalances when needed — keeping the LP position closely aligned with real-market prices.
5.2 Tokenized Liquidity Positions (ybBTC / ybETH)
When users deposit assets, YieldBasis mints ybBTC or ybETH, representing ownership of the leveraged, auto-rebalanced LP position.These tokens can be staked to earn extra YB rewards or used across other DeFi integrations.
5.3 Fees, Rewards & Governance
A portion of transaction fees is allocated to protocol reserves and reward pools.YB holders receive fee-sharing rights and can participate in governance — including parameter adjustments, reward schedules, and strategy updates.
5.4 Curve Ecosystem Synergy
Built around crvUSD, YieldBasis maintains a close technical and strategic relationship with the Curve ecosystem, potentially influencing Curve DAO governance and attracting existing Curve liquidity.
5.5 Reducing Impermanent Loss
According to backtests, YieldBasis claims to deliver an average APY of 20.5%, with even low-volatility periods yielding around 9%. This stability stands in contrast to traditional LP models, which often lose capital during volatility. The goal: predictable yield with mitigated downside.
6.YB Tokenomics
6.1 Token Overview
- Token Name:Yield Basis（YB）
- Initial Supply: 700,000,000 YB
- Maximum Supply: 1,000,000,000 YB
cta：Trade YB on MEXC：https://www.mexc.com/price/YB
6.2 Utility & Use Cases
- Rewards: Distributed to liquidity providers, stakers, and active participants.
- Governance: YB (or locked veYB) tokens grant voting power for proposals and parameter changes, following a model similar to Curve’s veCRV system.
- Revenue Sharing: A portion of protocol income may be distributed to YB/veYB holders.
- Ecosystem Growth: Allocations are reserved for partnerships, developer incentives, and community programs.
In short, YB is the economic and governance backbone of the YieldBasis ecosystem — aligning all participants within a single incentive loop.
7. Market Positioning
YieldBasis positions itself as a “leveraged liquidity protocol with impermanent loss optimization.” Its key differentiator lies in leveraging, auto-rebalancing, and tokenized LP positions, setting it apart from traditional AMMs like Uniswap or Curve.
Potential Competitors:
- Traditional AMMs: (Uniswap, Curve) – offer passive LP returns but no IL mitigation.
- Lending Protocols: (Aave, Compound) – leverage focus but no liquidity optimization.
YieldBasis bridges these two worlds — providing leveraged yield for BTC / ETH liquidity while minimizing risk exposure.
8.How to Buy YB on MEXC
As a leading global crypto exchange, MEXC now lists $YB, offering deep liquidity and competitive trading fees. Here’s how to get started:
1）Log in to the MEXC App or visit the official website.
2）Search for “YB” in the trading section.
3）Select the spot trading pair and enter your desired order details.
9.Conclusion
YieldBasis represents one of the most innovative experiments in DeFi liquidity design — combining leverage, auto-rebalancing, and tokenized LP positions to fundamentally reshape how liquidity providers earn yield.By minimizing impermanent loss and aligning incentives through the YB token, the protocol aims to create a sustainable, high-efficiency liquidity ecosystem that benefits LPs, token holders, and governance participants alike.
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