What Is YieldBasis (YB)? YieldBasis is a DeFi protocol that enables users to provide liquidity to automated market maker (AMM) pools without experiencing impermanent loss. The protocol achieves this through a 2× compounding leverage mechanism built on Curve Finance’s infrastructure, where users deposit crypto assets and receive YieldBasis LP tokens representing their share in the liquidity pool.
The protocol maintains a constant 2× leverage ratio by borrowing crvUSD against LP positions through a dedicated collateralized debt position (CDP). When price movements occur, a specialized Rebalancing-AMM and VirtualPool architecture enables arbitrageurs to automatically restore the target leverage ratio. This mechanism ensures that YieldBasis LP track the underlying crypto asset price movements 1:1 while generating trading fees from the underlying Curve pool.
YieldBasis offers two earning strategies for liquidity providers: unstaked YieldBasis LP holders earn trading fees directly from pool activity, while staked YieldBasis LP holders receive YB token emissions. The protocol implements a dynamic admin fee formula that adjusts based on staking participation, splitting trading fees between unstaked LP holders and veYB governance participants.
YB is the native utility token that is used for: Governance and Voting Rights: YB tokens can be locked for up to 4 years to create veYB (vote-escrowed YB) positions. veYB provides voting power for protocol governance, including proposals for parameter updates, feature additions, and protocol upgrades. The voting power is time-weighted and decays linearly over the lock duration unless max-locked for 4 years.
Gauge Voting for Emissions: veYB holders vote on gauge weights to determine how YB token emissions are distributed across different liquidity pools. Each gauge’s emission share is proportional to the votes it receives, with weights updating instantly. This system allows the community to direct incentives toward preferred pools, with a 10-day cooldown period between vote changes.
Protocol Revenue Sharing: veYB holders receive a portion of protocol revenue through the dynamic admin fee mechanism. As more YieldBasis LPs get staked, the admin fee increases non-linearly, allocating more trading fees to veYB holders. This creates revenue sharing opportunities for long-term token holders committed to governance participation.
Liquidity Mining Incentives: YB tokens are distributed as emissions to users who stake their YieldBasis LP tokens. The emission schedule follows an exponential decay curve with a maximum emission rate controlled by the GaugeController contract. The total supply is capped at 1 billion tokens.
