Is This The Next Best BTC Yield?

Earning a real yield for BTC has been one of DeFi’s longest running challenges.

Traditional AMMs expose us as liquidity providers to some of the best BTC yields but it comes with the caveat of impermanent loss (IL), a persistent drag that causes BTC LPs to underperform vs simply holding BTC. Most protocols have tried to offset that loss through token incentives or subsidies.

Yieldbasis, built by Curve Founder Michael Egorov, takes a different path: it attempts to eliminate impermanent loss entirely.

By pairing BTC with borrowed crvUSD and maintaining a constant 2× leveraged LP position, yieldbasis tracks BTC 1:1 in both directions, no IL. Liquidity providers earn Curve trading fees in BTC while staying fully exposed to the price of BTC, just like BTC holders prefer. They can stake their ybBTC to earn YB emissions.

The end goal is a structurally sustainable BTC yield that scales with market activity, rather than subsidies. Ideally, a yield-bearing version of BTC that can scale to $50B in liquidity according to simulations. The real unlock here is providing BTC holders (currently the form of cbBTC, wBTC, tBTC) the ability to deposit any amount of BTC and know that they will be able to reliably retrieve their principal + compounding BTC yield.

In this new episode of The Edge Podcast, Michael walks us through how yieldbasis works, how it fits into the broader Curve ecosystem, and what this model could mean for BTC yield farmers, including institutional investors like BTC DATs.

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Disclosure: DeFi Dad and Nomatic are both long BTC.