Yieldbasis Strengthens Curve’s Liquidity While Tackling Impermanent Loss
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Yieldbasis is a new system designed to solve one of the biggest problems in automated market makers (AMMs)—impermanent loss. As it stands, this platform allows users to deposit Bitcoin-related assets such as cbBTC, tBTC, and WBTC while enjoying 2x compounding leverage through Curve’s crvUSD credit line. By combining Curve’s AMM model and DAO-approved credit tools, Yieldbasis creates a strong and self-sustaining liquidity structure.
In recent weeks, activities around Curve governance have increased rapidly. On September 24, Curve DAO gave Yieldbasis an initial 60 million crvUSD credit line, which was quickly filled. Due to high demand, the credit line was later raised to 300 million crvUSD by mid-October. The latest decision on October 15 launched YB token rewards and an airdrop for veCRV holders who had supported earlier votes.
Expanding Liquidity and Growing Revenue
Every dollar’s worth of BTC assets added to Yieldbasis represents $2 in total value locked (TVL) on Curve, thanks to its leveraged system. This mechanism helped Curve’s TVL jump from $6 million to $300 million in a short time. Yieldbasis also increased trading activity in crvUSD pools on Curve, producing about $188,000 in total revenue. Around $35,000 came from PegKeeper operations, which helped keep crvUSD’s price stable while bringing extra profit to the DAO.
Source: Bitcoin.com
The rapid growth shows how powerful Yieldbasis can be in boosting both liquidity and trading volume on Curve. The difficulty, though, is maintaining the equilibrium of this increase. Meanwhile, preserving the system’s long-term stability requires keeping the crvUSD peg constant and avoiding excessive leverage.
Preparation for Responsible Extension
At the moment, Curve governance is reviewing proposals to ensure controlled and sustainable growth. On one end, the firm is reviewing a proposal (No. 1238) recommending directing YB emissions into a DepositPlatformDivider contract to support vote incentives through Votium and VoteMarket. The firm is also reviewing another proposal (No. 1241) aimed at tripling PegKeeper capacity to increase crvUSD liquidity.
Michael Egorov, the founder of Yieldbasis, is currently promoting cautious scaling, increasing the quantity of crvUSD, coordinating token incentives, and getting ready for a potential $1 billion allocation if liquidity stabilizes.
To this end, the DAO community continues to discuss these steps, seeking to balance Yieldbasis’s growth with Curve’s stability. Hence, this collaboration may mark the next major phase in Curve’s decentralized evolution.
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