ybBTC
When users deposit BTC into YieldBasis, they receive ybBTC (ERC-20 standard) LP tokens. Each ybBTC token represents a proportional share in a leveraged BTC/crvUSD position. Liquidity can be withdrawn at any time, just like in regular pools, with no minimum deposit requirements.
These LP tokens track BTC price movements 1:1 while earning trading fees. By design, the protocol eliminates traditional Impermanent Loss (IL) found in standard AMMs. This 1:1 tracking is achieved through 2× compounding leverage mechanics. The fee distribution mechanism is dynamic: the protocol splits yields between trading fees and YB tokens, allowing users to choose their preferred strategy.
Multi-BTC-Wrapper Support: YieldBasis will support depositing different wrapped versions of BTC across various chains. For example, depositing cbBTC will give users yb-cbBTC, WBTC will give users yb-WBTC, and so on.
Earning with unstaked ybBTC
After depositing BTC and receiving ybBTC tokens, users have two earning strategies available that maintain a built-in economic balance:
Hold ybBTC, earn organic yield
- Hold your ybBTC tokens to earn trading fees directly from the underlying BTC/crvUSD pools
- APR increases as more ybBTC tokens are staked for $YB emissions (stakers forfeit their trading fees)
- Provides yield from real trading activity
Understanding Value Fluctuations
While ybBTC tracks the value of BTC 1:1, you may observe temporary fluctuations (Temporary Redemption Discount (TRD)) in your balance or redemption rate. This is normal and stems from the protocol's rebalancing logic:
- Curve Crypto Pool Imbalance: If the underlying Curve pool (where the actual trading happens) becomes imbalanced due to heavy market buying or selling, the immediate withdrawal value may fluctuate slightly until the pool repegs.
- Volatility Decay (Rebalancing Costs): The protocol actively manages 2x leverage. During high volatility, the system arbitrages the pool to maintain the 2x ratio. These operations have a cost (slippage/fees).
- Note: In healthy markets, trading fees accumulate faster than these costs.
- Recovery: If volatility causes a temporary dip in fundamental value, the protocol activates a Recovery Mode. During this time, Admin Fees are waived, and 100% of protocol revenue is directed to refilling user balances until the value is restored.
When the market moves violently, the redemption rate of ybBTC may temporarily dip due to arbitrage lag. This usually resolves automatically as the pool stabilizes and collects fees.
Earning with staked ybBTC
Stake ybBTC, receive $YB emissions
- Stake your ybBTC tokens to earn $YB governance tokens instead of trading fees
- Give away immediate yield for future YB -> veYB yields
Staked Value Fluctuations
Just like the unstaked token, the underlying value of your staked position tracks BTC. However, due to Pool Imbalance and Volatility, Temporary Redemption Discount (TRD) may occur, which may cause the redeemable amount of BTC to fluctuate in the short term.
The protocol does not charge admin fees on "losses." If the fundamental value of the token drops due to volatility decay, the protocol pauses its own fee collection to accelerate your recovery.
Dynamics between Unstaked and Staked
The protocol creates natural incentives: when staking rates are high, unstaked holders earn more fees while stakers receive fewer emissions. This dynamic equilibrium encourages both strategies to coexist.
Fee Distribution: For a detailed visual explanation of how fees are distributed between unstaked ybBTC holders and veYB holders, see the Fees page.