Michael Egorov, the founder of Curve Finance, is making waves with Yield Basis, a decentralized protocol dedicated to sustainable yield generation on Bitcoin. After experiencing significant setbacks in his career, the entrepreneur is now focused on addressing one of DeFi’s biggest challenges: impermanent loss.
Yield Basis: an impermanent loss-free AMM
The promise is simple yet ambitious: a reinvented AMM model designed to completely eliminate the risk of impermanent loss (IL). In traditional pools, every price divergence between assets leads to erosion of earnings. With Yield Basis, this problem vanishes, paving the way for deeper liquidity and finally attractive returns for Bitcoin holders. A wager that could appeal to institutions, previously reluctant to lock up BTC on-chain for less than 2% annual returns.
Capped pools and locked governance
To manage initial growth, the protocol starts with three pools, each capped at $1 million in deposits. This cap strategy limits systemic risks while creating scarcity that could boost early user interest. On the governance front, Yield Basis directly draws inspiration from Curve with its vote-escrow system (veYB). Token holders must lock their YB to influence decisions and earn protocol fees, distributed in crvUSD or wrapped Bitcoin.
A “value-protecting” model
The innovation doesn’t stop at pool mechanics. Unlike most DeFi projects, token emissions are not handed out to liquidity providers. They are dependent on position performance, a system dubbed “value-protecting” by Egorov. This choice aims to align incentives with real yield creation, rather than artificial token inflation.
$5 million and a strategic launch
Yield Basis raised $5 million in early 2025 to fund its development. The protocol also kicks off with the launch of the Legion and Kraken joint launchpad, where the community can participate in token sales. A spotlight move that immediately places the project among the big players.
A vision beyond Bitcoin
While Bitcoin serves as the initial testing ground, Egorov already has broader ambitions. The model could adapt to Ethereum, tokenized commodities, or even stocks. This transformation could turn Yield Basis into a new star of decentralized finance, extending the promise of secure returns to a range of assets.
