Yield Basis (YB) is a DeFi protocol but people also called it Yield basis Crypto. It designed to allow crypto owners to earn stable, on-chain yields without suffering from impermanent loss. YieldBasis was founded in 2025 by Curve Finance’s founder, Michael Egorov. YieldBasis is deeply integrated with the Curve ecosystem (one of the largest stablecoin and liquidity networks) and even obtained a significant credit line of Curve’s stablecoin (crvUSD) to start its pools.

The fundamental concept is straightforward of Yield Basis Crypto: users lock up cryptocurrency (first being Bitcoin) in YieldBasis pools and, as a return, collect yield on trading fees without sacrificing value through IL. Behind the scenes, YieldBasis does this by establishing a leveraged liquidity position. When you place BTC in the pool, the protocol mingles it with an equal amount of Curve’s stablecoin (crvUSD) and keeps a 2× leverage by default. This arrangement guarantees that as BTC’s price fluctuates, your position’s overall worth fluctuates in tandem with it, preventing mismatch that leads to impermanent loss.

Yeild Basis benefits

Short of it, Yield Basis Crypto provides you with the best of both worlds: the safety of HODLing your exposure to the price of your asset, along with a stream of income in the form of market-making fees. It’s best referred to as “HODL-friendly yield.” Rather than unstable APYs or poisonous incentives, YieldBasis instead targets sustainable, organic income – asset volatility becomes the yield source.

The decentralized finance (DeFi) world comes with new means to earn cryptocurrency yields, but it may be daunting to newbies. Classic yield farming — providing tokens to automated market maker (AMM) pools — tends to come with impermanent loss and fluctuating returns. Yield Basis Crypto (also referred to as YieldBasis or YB) is a fresh DeFi protocol aiming to alter this. It came online in early 2025 by Curve Finance creator Michael Egorov.

YieldBasis seeks to enable crypto holders to generate consistent on-chain yields (particularly on Bitcoin) without incurring impermanent loss. Simply put, YieldBasis allows you to “HODL and earn”: you retain your crypto exposure and receive trading fees and rewards in return. In this guide, we will detail Yield Basis Crypto extensively, including how it operates, its characteristics, pros and cons, and how new users can get involved.

Understanding DeFi Yield Farming and Impermanent Loss

Prior to going into Yield Basis, it’s helpful to understand how yield farming and impermanent loss function. Yield farming entails supplying your crypto (such as Bitcoin or Ethereum) as liquidity within a DeFi protocol so that you can accrue rewards (usually fees or tokens). For instance, on an AMM such as Uniswap, you put in equal amounts of two tokens (e.g., BTC and USD-stablecoin). When people exchange those tokens, fees build up for liquidity providers (LPs). For putting in assets, LPs get LP tokens which hold a fraction of the pool. The more swaps happen, the more fees LPs earn.

Traditional AMM yield farming, however, causes what we know as impermanent loss. Impermanent loss occurs when the price of the tokens in a liquidity pool. It changes after you have deposited them. While one asset’s price.

When one of them goes up or down relative to the other, the rebalancing of the pool happens automatically, which leaves you with a different mix of assets. That can lower your total value versus just holding the assets. In other words, even when the market is in favor, an LP might end up with less value. This could happen compared to if they had held the tokens outside the pool. We call it impermanent loss. The loss disappears if you withdraw at the exact moment prices return to their starting ratio. However, it becomes permanent if you withdraw after the prices have shifted.

How Yield Basis Crypto Works

Here are the key steps to understand how YieldBasis works when one participates:

Deposit Crypto Asset:

First, you deposit a supported cryptocurrency—currently only wrapped Bitcoin (wBTC)—into the YieldBasis protocol on its platform.

2× Leverage Setup:

The protocol automatically borrows an equivalent value of Curve’s stablecoin (crvUSD) and pairs it with your deposited asset. For example, depositing 1 BTC leads to the borrowing of $BTC value in crvUSD to form a 50/50 BTC–crvUSD pool position; this doubles your exposure (2× leverage) without risking extra collateral beyond your BTC.

2× Leverage Setup:

YieldBasis uses a special automated process to achieve this whenever market prices change. Market maker-which would include a “VirtualPool” and other mechanisms-to keep the leverage ratio at 2×. In practice, arbitrageurs and the protocol’s own logic correct any imbalance; you do not need to rebalance positions manually.

Receive Wrapped Pool Tokens (e.g. ybBTC):

In return for your deposit and leveraged position, you receive “yield tokens” representing your share of that pool, like ybBTC, which encapsulates your 2× leveraged BTC position.

Earn Trading Fees:

Because traders heavily use the BTC/crvUSD pool for swaps, you receive a pro-rata share of the trading fees. Traditional AMM yield farming, however, causes what we know as impermanent loss.

Stake for Extra YB Rewards:

You can take your wrapped tokens, called ybBTC, and stake them within YieldBasis to earn additional rewards denominated in YB tokens. This adds another incentive for providing liquidity.

Conclusion

Yield Basis Crypto, or YB for short, introduces a new twist in DeFi yield farming. It uses Curve’s infrastructure and innovative AMM design to enable liquidity providers to collect fees while maintaining their crypto’s price essentially “flat”. For beginners seeking passive income on their Bitcoin or other assets, YieldBasis is user-friendly, with easy liquidity provision and no risk of impermanent loss.
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