Michael Egorov, founder of Curve Finance, has launched Yield Basis, a decentralized protocol built to provide sustainable yield while eliminating impermanent loss (IL), one of decentralized finance’s longest-running challenges.
Bitcoin holders have long faced limited opportunities for on-chain returns. Lending markets rarely offer more than a fraction of a percent, while automated market maker (AMM) pools have exposed users to IL — the risk of losing value when token prices diverge. Even in favorable conditions, yields rarely topped 1–2%.
Yield Basis tackles this by reengineering the AMM model. The protocol removes IL risk altogether, which Egorov says will enable deeper Bitcoin liquidity on-chain and more attractive yield opportunities for institutional and professional investors. To manage early growth, three pools launched with a $1 million deposit cap each.
The system borrows from Curve’s five years of infrastructure resilience, adopting a vote-escrow mechanism (veYB) for governance. Token holders must lock their YB to participate in governance and earn protocol fees, distributed in either Curve’s crvUSD stablecoin or wrapped Bitcoin. Unlike many DeFi projects, token emissions aren’t simply handed to liquidity providers; they are tied to position yield, a model Egorov calls “value-protecting.”
Yield Basis secured $5 million in early 2025 funding and is the first project to debut on the joint Legion and Kraken launchpad, where the community can access its token sale. While Bitcoin is the initial focus, Egorov says the protocol’s impermanent loss solution could extend to Ethereum, tokenized commodities or even stocks — potentially broadening the scope of yield-bearing assets on-chain.