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FAQ

Balance Fluctuations & Recovery​

Why did my balance drop?​

Short Answer: This is a "Temporary Imbalance Drawdown," not a realized permanent loss.

The Mechanism: YieldBasis relies on a leveraged balance between BTC and crvUSD to maintain its 2x exposure. When the market moves rapidly (High Volatility), the internal pool ratio skews away from its target. The Lag: The interface calculates your share value based on the current, imbalanced state of the Curve pool. This creates a temporary "paper loss" visible in your UI. The Fix: Arbitrageurs naturally trade against the pool to return it to the target leverage ratio. Once this rebalancing completes, the imbalance disappears, and your balance recovers.

Why does recovery takes time?​

If you see a prolonged lag, it is usually due to the protection mechanism found in the LT contract, often called the "Rebalancing Budget."

  1. The Protection: To prevent the protocol from realizing excessive permanent losses during one-way market trends (e.g., Bitcoin dumping continuously), the system tracks a value called v_st_loss (Staked Value Loss).
  2. The Budget: The system uses accumulated trading fees as a "budget" to cover these rebalancing costs. If the price moves faster than fees can accumulate, the protocol waits for more fees to trickle in before "filling the hole."
  3. The Result: The system protects stakers by waiving Admin Fees until the "Fee Cushion" grows large enough to restore the peg.

What are the scenarios for recovery?​

How fast your balance recovers depends on market activity:

  • 📉 Stagnation (Slow): If the price trends only one way with low volume, fees accumulate slowly. The "Budget" fills up slowly, and the drawdown may persist for days or weeks.
  • ➡️ Neutral (Steady): The market moves sideways. Arbitrage becomes profitable again, and the pool gradually rebalances over a few days.
  • 🚀 High Volume (Fast): A sharp move triggers massive liquidations on lending markets. This generates a spike in trading fees, instantly filling the "Rebalancing Budget" and rapidly restoring the peg.

Is this the same as Impermanent Loss?​

No. This is fundamentally different from the Impermanent Loss (IL) experienced in standard AMMs.

YieldBasis eliminates impermanent loss through its leverage design. What you're seeing is a temporary effect from rapid price movements that gets recovered through fee earnings.

Tokens & Vaults​

What's the difference between sybBTC and ybBTC?​

ybBTC (Yield Bearing / Unstaked):

  • You hold the LP token directly.
  • Yield: You earn a share of trading fees.

sybBTC (Staked Vault):

  • You deposit your LP tokens into the Staker (Gauge).
  • Yield: You forgo organic trading fees to earn $YB emissions (governance tokens).
  • Peg: Ideally maintains a 1:1 ratio with BTC.

How do the two tokens interact during a drawdown?​

  • Shared Lag: If the main pool experiences a lag (drawdown), both tokens will show a temporary value drop.
  • Recovery Mode: If sybBTC drops below its peg, the protocol activates Recovery Mode. It automatically redirects 100% of Admin Fees to the pool until the loss (v_st_loss) is fully covered.
  • V2 Stability: In the updated pools, losses are significantly smaller (estimated 10-20x less) during similar volatility compared to legacy pools.

How do I actually receive trading fees?​

Trading fees are automatically compounded into the value of your token.

  1. Generation: The AMM generates fees from traders.
  2. Collection: The protocol collects these fees via collect_fees.
  3. Distribution: The value is added to the total pool liquidity. This increases the amount of BTC redeemable for every 1 ybBTC. You do not need to manually claim BTC fees.

Temporary Redemption Discount (TRD)​

What is Temporary Redemption Discount (TRD)​

Pools may become imbalanced during high volatility, causing discounts on redeeming ybBTC or staked ybBTC. Arbitrage and swaps naturally rebalance them with time, reducing the discount to 0.

Where can i check the current TRD?​

The current TRD can be checked on a special analytics page on the YieldBasis UI: Analytics. The TRD can be checked on the right side of the table.

TRDTRD

Migration & Troubleshooting​

Why is there a protocol update (V1 to V2)?​

The V2 update fixes an issue in the legacy vault where volatility caused excessive fluctuations for staked users.

  • Legacy (V1): Staked positions could experience new losses before recovering from previous ones.
  • Updated (V2): Changes the value calculation to use price_scale consistent with the AMM.
How YieldBasis worksHow YieldBasis works

The code is publicly available for both versions: (1) the legacy code in question (2) the updated version.

Why do I see "Debt too high" when migrating or depositing?​

Error: Debt too high Cause: The pool has reached its current capacity (specifically the crvUSD debt limit) and cannot currently accept new funds.

LPs who have not yet migrated can wait and try again later. Space becomes available when other users withdraw or when the protocol raises the debt limit*.

Important: Migration is not time-limited. You can migrate your position as soon as capacity opens up

*Note: Raising the debt limit requires a Curve DAO vote.

Why do I see "Not enough out" during migration?​

Error: Not enough out Cause: This is a slippage error, the migration contract checks if the amount of new tokens you receive matches your minimum expectation.

Increase your slippage tolerance slightly in the UI (e.g., from 0.1% to 0.5%). Volatility can cause the exchange rate to shift slightly between the time you sign the transaction and when it is processed.

Do I Need to Migrate?​

When Curve cryptoswap pools are very imbalanced, it might make sense to wait for a more rebalanced state to migrate to the new version. Pool imbalance can be checked via the Curve UI by searching for the YB pools.

How does migration work?​

YieldBasis uses a dedicated LTMigrator contract to handle this in one transaction:

  1. Withdraw: It withdraws assets from your V1 position.
  2. Exchange: It moves the liquidity to the new system.
  3. Deposit: It calls deposit on the new V2 position. Your accumulated fees and emissions are preserved during this process.

Protocol Update: Legacy vs Updated Vaults​

Why is there a protocol update?​

The YieldBasis team identified an issue in the legacy vault (v1) implementation that causes excessive value fluctuations, particularly affecting staked vault depositors. An updated vault (v2) has been developed that significantly reduces these fluctuations.

The code is publicly available for both versions: (1) the legacy code in question (2) the updated version.