Is Yield Basis Safe?
Risk Grade: C+ (40/100)
Yield Basis is rated as elevated risk — multiple novel mechanisms and notable interaction risks.
Elevated risk — novel leveraged AMM mechanism with unproven IL-elimination claim and liquidation risk from Curve borrowing, balanced by credible founder.
Yield Basis is a novel AMM protocol by Curve Finance founder Michael Egorov that claims to eliminate impermanent loss through 2x leveraged BTC liquidity positions. With $154M TVL since its October 2025 mainnet launch, its C grade reflects the untested nature of its core IL-elimination claim, leverage-related liquidation risks from borrowed crvUSD, and a very short track record.
TVL
$167M
Mechanisms
5
Interactions
4
Value Grade
D
Key Risks for Yield Basis Users
The protocol's core claim that 2x leverage eliminates impermanent loss is a novel mathematical assertion not tested through extreme market volatility.
ybBTC positions involve auto-borrowing crvUSD from Curve to create 2x leverage. If BTC price drops sharply, positions could be liquidated.
The protocol launched in October 2025 with less than 6 months of track record.
Yield depends on trading volume generating enough fees to offset crvUSD borrowing costs.
Top Risk Factors
- •The 2x leveraged liquidity model that claims to eliminate impermanent loss is a novel mechanism — the mathematical assertion that leveraging by exactly 2x eliminates IL pricing effects is untested in prolonged volatile conditions.
- •Yield Basis auto-borrows crvUSD via Curve to create 2x leveraged BTC/crvUSD positions, creating dependency on Curve's lending markets and introducing liquidation risk if BTC drops sharply.
- •Protocol launched on mainnet in October 2025 with less than 6 months of track record; the leveraged AMM model has not been battle-tested through a significant market drawdown.
- •Concentration risk from single-strategy dependency — the entire protocol relies on the 2x leveraged AMM thesis, with no fallback strategy if the model fails.
Risk Score Breakdown
Yield Basis's highest risk area is Interaction Severity (10/20). Here's how each dimension contributes to the overall 40/100 score:
Read the Full Yield Basis Risk Report
This protocol has 2 collapse scenarios. 3 high-severity interaction risks identified. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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