Inflation & Emission

YieldBasis uses sophisticated emission mechanics to ensure sustainable token distribution and prevent excessive inflation.

30% of all tokens (300M YB) are distributed through liquidity mining based on a dynamic emission schedule. These tokens are distributed to users who provide liquidity to different pools based on gauge weights.

How Gauge-Based Distribution Works

The liquidity mining program uses a gauge voting system where veYB holders vote on which pools receive emissions. Gauges are smart contracts that measure provided liquidity and distribute rewards based on users' shares. The more votes a pool receives, the more tokens it gets distributed to its liquidity providers.

Emission Formulas

Maximum daily emission rate:

$E_{max} = \frac{\text{Tokens for LM left}}{4 \times 365}$

Actual daily emissions:

$E_{daily} = E_{max} \times \sqrt{s}$

Where:

• Tokens for LM left: Remaining tokens available for liquidity mining
• 4 * 365 days: 4-year emission period (1,460 days total)
• $E_{max}$: Maximum daily emission rate
• $s$: Scaling factor computed as the share of staked ybBTC volume (0 ≤ s ≤ 1)

Daily Emissions vs Staking %

Staking: 50%Daily Emission: 70.7%

How it works: As more ybBTC gets staked (higher s), daily emissions increase following the √s curve. This creates a natural balance where higher staking leads to higher emissions, but with diminishing returns.