Glossary
This glossary defines the key terms and concepts used throughout the YieldBasis ecosystem.
Admin Fee
A portion of trading fees taken from the BTC/crvUSD pool that is awarded to veYB holders. This fee is dynamic and adjusts based on staking participation - as more ybBTC gets staked, the admin fee increases non-linearly, diverting more fees to veYB holders while maintaining incentives for unstaked holders.
AMM (Automated Market Maker)
A smart contract that uses mathematical formulas to determine asset prices and facilitate trading without traditional order books. YieldBasis uses Curve's Cryptoswap AMM technology for its BTC/crvUSD pool.
Arbitrage
The practice of taking advantage of price differences between markets. In YieldBasis, arbitrageurs help maintain the correct leverage ratio by trading against the Rebalancing-AMM when prices deviate from the oracle.
BTC/crvUSD Pool
The underlying Curve liquidity pool that holds BTC and crvUSD assets. This pool generates trading fees that are distributed to ybBTC and veYB holders.
CDP (Collateralized Debt Position)
A borrowing mechanism where users deposit collateral to borrow assets. YieldBasis uses a dedicated crvUSD CDP line to borrow against BTC/crvUSD LP tokens to maintain 2× leverage.
Compounding Leverage
A leverage mechanism where borrowed funds are used to increase position size, and the position itself serves as collateral for additional borrowing. YieldBasis maintains a constant 2× compounding leverage.
crvUSD
Curve's decentralized stablecoin that is pegged to the US dollar. Used as the USD side of the BTC/crvUSD pool in YieldBasis.
Curve
A decentralized exchange and lending protocol. YieldBasis builds on Curve's technology (AMM and lending) and uses Curve pools for liquidity provision.
Emission
The distribution of YB tokens to liquidity providers through the gauge voting system. Emissions are calculated based on a dynamic schedule that considers staking participation.
Flash Loan
A type of loan that must be borrowed and repaid within the same transaction. YieldBasis uses flash loans to maintain the correct leverage ratio without requiring users to provide additional collateral.
Gauge
A smart contract that measures provided liquidity and distributes rewards based on users' shares. Gauges are used in YieldBasis's liquidity mining program, with veYB holders voting on which pools receive emissions.
Gauge Voting
A governance mechanism where veYB holders vote on which pools receive YB token emissions. Votes are weighted by veYB balance and determine the distribution of rewards across different pools.
Gauge Weights
The relative allocation of YB token emissions to different liquidity pools based on gauge voting results. Higher gauge weights result in more emissions being distributed to that pool's liquidity providers.
Impermanent Loss (IL)
The loss experienced by liquidity providers when the price of assets in a pool changes compared to simply holding the assets. YieldBasis eliminates IL through its 2× leverage mechanism, making positions track BTC price 1:1.
Leverage
The use of borrowed funds to increase the potential return of an investment. YieldBasis uses 2× compounding leverage to eliminate impermanent loss while maintaining exposure to BTC price movements.
LP (Liquidity Provider)
A user who provides assets to a liquidity pool in exchange for LP tokens. In YieldBasis, users deposit BTC and receive ybBTC tokens representing their share of the BTC/crvUSD pool.
LP Tokens
Tokens that represent ownership in a liquidity pool. In YieldBasis, ybBTC tokens represent ownership in the BTC/crvUSD pool and entitle holders to trading fees (LP unstaked) or YB emissions (LP staked).
Locking
The process of locking YB tokens to create veYB positions for governance rights and admin fee sharing. Users can lock their YB tokens for different durations to receive veYB voting power and protocol revenue.
Oracle
A data feed that provides external price information to smart contracts. YieldBasis uses a BTC/USD oracle to price the Rebalancing-AMM and maintain correct leverage ratios.
Rebalancing-AMM
A specialized AMM that holds Curve LP tokens on one side and implicit crvUSD debt on the other. It's anchored to an oracle price and helps maintain the correct leverage ratio in YieldBasis.
Staking
The process of staking ybBTC tokens to earn YB emissions instead of trading fees. Users do not need to stake ybBTC tokens - if they are unstaked they earn trading fees, if they are staked they earn YB emissions. Staking is only possible with ybBTC tokens.
Trading Fees
Fees generated from trading activity in the BTC/crvUSD pool. These fees are distributed to unstaked ybBTC holders and veYB holders based on the dynamic admin fee formula.
veYB (Vote-Escrowed YB)
The vote-escrowed version of the YB governance token. veYB provides voting power and protocol revenue sharing based on the amount of YB locked and the duration of the lock.
VirtualPool
A smart contract that bundles flash loans, LP mint/burn operations, and debt operations into a single transaction. Arbitrageurs interact with the VirtualPool to maintain the correct leverage ratio.
YB
The native governance token of the YieldBasis ecosystem. YB tokens can be locked to create veYB positions for governance and revenue sharing.
ybBTC
The LP token received when users deposit BTC into YieldBasis. Each ybBTC token represents a proportional share in the BTC/crvUSD LP pool and tracks BTC price movements 1:1 while earning trading fees.