yb

Providing liquidity to #cryptocurrency AMMs often exposes users to impermanent loss (IL), a situation where holding tokens in a liquidity pool yields less value over time compared to simply holding the underlying assets.
YieldBasis (YB) offers a new solution for BTC liquidity providers aiming to avoid IL while earning trading fees. Using a leveraged liquidity model, YieldBasis maintains a 2x leverage position that closely tracks the price of BTC, eliminating IL and improving returns for liquidity providers.
How Does YieldBasis Work?
YieldBasis operates by creating a leveraged liquidity position in the Curve BTC/crvUSD pool. The process involves:
BTC deposit and receipt token: Users deposit BTC into YieldBasis and receive ybBTC tokens, which represent a claim on a 2x leveraged BTC/crvUSD liquidity pool position.Leveraged pairing with crvUSD: The protocol borrows an equivalent USD value of crvUSD (a stablecoin) against the liquidity pool position, maintaining a constant 2x compounding leverage, meaning a 50% debt-to-value ratio.Collateralized debt: The Curve LP token obtained from depositing BTC and crvUSD serves as collateral for the borrowed crvUSD debt.Auto-rebalancing: A built-in rebalancing mechanism incentivizes arbitrage traders to maintain the 2x leverage ratio by performing operations that adjust debt and LP holdings whenever BTC price changes.Fee earnings & staking options: Users can keep ybBTC unstaked to earn trading fees in BTC or stake ybBTC to receive YB token emissions. YB tokens can also be vote-locked to obtain governance rights and a share of BTC fees.
The Problem of Impermanent Loss
In traditional AMMs, impermanent loss occurs because the pool’s asset ratio regularly rebalances relative to price movements. This often causes liquidity providers’ position value to grow more slowly than just holding BTC.
For example, if the BTC price doubles, an AMM position rebalanced between BTC and stablecoins might end up worth about 5.7% less than simply holding BTC.
While some protocols offset potential losses through token incentives, these subsidies don’t eliminate the impermanent loss problem. YieldBasis tackles IL at its source by structuring leveraged LP positions to move exactly in line with BTC price, which effectively removes IL.
Leveraged Liquidity: The YieldBasis Solution
By pairing deposited BTC with borrowed crvUSD and maintaining a 2x leverage position, YieldBasis ensures the LP value tracks BTC price 1:1. Here’s what happens:
The protocol uses a dedicated collateralized debt position (CDP) to borrow crvUSD equal in USD value to the BTC deposit.Both assets are added together into the Curve BTC/crvUSD liquidity pool.The resulting LP token is collateral for the borrowed crvUSD debt.The system auto-rebalances to keep the debt exactly at 50% of the total LP value.Rebalancing is performed atomically by arbitrage traders interacting with the Rebalancing-AMM and VirtualPool, enabling the contract to mint or burn LP tokens and debt to restore the correct leverage after BTC price moves.
This structure leverages the mathematical properties of Curve’s pool and compounding leverage to eliminate the sublinear value drag seen in regular AMMs, thus killing impermanent loss and allowing liquidity providers to benefit fully from BTC price moves while still collecting trading fees.
Potential Risks
While YieldBasis eliminates the impermanent loss problem, there are some risks worth considering:
Smart contract risk: As with any DeFi platform, bugs or vulnerabilities in the smart contracts could potentially lead to loss of funds.Arbitrage and rebalancing dependency: YieldBasis relies on arbitrageurs to keep the leverage ratio stable; if these mechanisms fail or become inefficient, the position could deviate from its target leverage.Market risks: Sudden large price swings or low liquidity in the underlying pools could affect position stability and fee generation.Protocol and borrowing risks: The stablecoin crvUSD is borrowed on the platform; risks related to the stablecoin's stability or borrowing mechanism could impact overall position performance.
YieldBasis (YB) on Binance Holder Airdrops
On October 14, 2025, Binance announced YB as the 53rd project on the Binance Holder Airdrops. Users who subscribed their BNB to Simple Earn and/or On-Chain Yields products from October 9 to 11 were eligible to receive YB airdrops. A total of 10 million YB tokens were allocated to the program, accounting for 1% of the max total token supply.
#YB #ZBT ZBTUSDT CryptoAnalysis Binance Altcoins CryptoTrading BullishSetup CryptoCommunity TechnicalAnalysis TradingSignals CryptoUpdate Blockchain CryptoNews SwingTrade HoldStrong
$AVAX
$ZBT
$YB