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yb-LP Tokens

When you deposit into a YieldBasis market, you receive yb-LP shares — an ERC-20 token representing your pro-rata claim on a 2× leveraged Curve Cryptoswap LP position.

A classic AMM LP share vs a yb-LP share​

A classic AMM LP share is a pro-rata claim on two unleveraged assets in a pool that prices trades by formula (for constant-product pools, x * y = k). When the volatile asset's market price moves, the share's underlying value — measured at that new market price — falls below what you'd have by simply holding both assets outside the pool. That shortfall is called impermanent loss. It exists from the moment the market price diverges from the pool's deposit point, whether or not any trader has acted on it: the LP value function is just shaped that way.

A yb-LP share is a pro-rata claim on the same kind of pool position, held at 2× leverage with the stablecoin side financed by borrowing. The 2× leverage exactly cancels the LP's underperformance: the share's value tracks the volatile asset one-to-one, and trading fees accrue on top. See Compounding Leverage for why 2× is the magic number.

Two ways to hold yb-LP​

ModeWhere it sitsWhat you earnTransferable?
UnstakedYour walletFundamental Value growth from trading feesYes (ERC-20)
StakedThe gaugeYB emissions, shown as Token APRNo, while staked

Choose based on whether the YB emissions on your gauge, priced in USD, beat the Fundamental Value growth you forfeit. See Stake and Unstake yb-LP for the decision framework.

Staked positions can also experience watermark drawdown during volatile periods. See Watermark and Recovery.

How new shares are priced​

New shares are minted at the current Fundamental Value, so a deposit doesn't dilute existing holders.

Example. The cbBTC vault has 100 shares outstanding and Fundamental Value = 1.0 cbBTC per share. A 10 cbBTC deposit mints 10 new shares (total: 110). Later, after fees push Fundamental Value to 1.05, another 10 cbBTC deposit mints only 10 / 1.05 ≈ 9.524 new shares. Existing holders are not diluted.

Fundamental Value vs Redemption Value​

Two numbers describe a yb-LP share:

  • Fundamental Value — what the vault accounts the share at.
  • Redemption Value — what a withdrawal would actually return right now.

These usually stay close. When they diverge, the gap is the Temporary Redemption Discount (TRD): it goes negative when the pool is imbalanced and a withdrawal would return less than Fundamental Value. Arbitrage closes the gap on its own.