TL;DR

• Activated Governance proposal introduces the Fee Switch - the distribution of captured fees to veYB holders

• The 17.13 BTC (approximately ~$1.578m) of collected fees began to be distributed to veYB holders

• The Fee Switch enables the full scope of YB utility and has a synergistic impact on YieldBasis DAO, Curve DAO, and crvUSD

Today, we are thrilled to announce the YB Fee Switch - a long-awaited protocol milestone. This article focuses on explaining the Fee Switch activation, distribution, and claim processes, as well as the impact of YB’s full utility activation

Details:

1. YieldBasis fees explanation

2. YB Fee Switch: activation, distribution, and stats

3. The impact YB fee switch

YieldBasis charges fees on trading activity in liquidity pools. This can be accounted as protocol revenue, which is further split between liquidity providers and YB DAO governance participants (veYB holders). The exact split proportion is algorithmic and will be explained below.

YieldBasis LPs have two options for generating yield from provided liquidity: (a) hold the ybBTC LP token and receive BTC-denominated trading fees (b) stake ybBTC, forgo BTC-denominated trading fees and participate in YB emissions.

The exact fee split (effective admin_fee) depends on the ybBTC stake_rate, or the share of ybBTC LPs receiving YB token emissions:

For example, when 50% of ybBTC is staked, unstaked tokens receive 64% of all fees and veYB holders receive the remaining 36%.

Fee Switch event enables distribution of the charged admin fee to YieldBasis DAO participants (veYB holders).

Note that YB tokens not locked in veYB do not receive fees.

You can lock your YB on the YB Lock Page.

Fee Switch activation

To activate the Fee Switch and initiate the distribution of fees to veYB holders, YieldBasis DAO approved this action via the governance proposal. Already passed.

veYB holders are the recipients of all fees, both those already captured and those collected in the future. The FeeDistributor contract will receive fees collected from all pools, including legacy pools, new implementation pools, and any new deployments.

The FeeDistributor contract temporarily holds BTC-denominated fees owned by veYB holders that await claiming. When fees are received by the FeeDistributor, the fee distribution can be initiated. Thus, the contract balance is a sum of fees that are already available for claiming by veYB holders (distribution was initiated) and those that are awaiting distribution initiation.

Fee Switch: distribution to veYB holders

In order to initiate the distribution of fees from the FeeDistributor contract, the permissionless fill_epochs() function must be called. The existing (undistributed) fees will be distributed equally over four future epochs. Each epoch lasts one week and starts at 00:00 UTC on Thursdays.

For example, there is 1 BTC in the FeeDistributor contract and someone calls the fill_epochs() function. As a result, 1 BTC will be assigned for equal distribution across the next four epochs, at a rate of 0.25 BTC per epoch. Fee distribution is only scheduled exclusively for future epochs, meaning that if fill_epochs() is called on Wednesday, the next four epochs starting at 00:00 UTC on Thursday will be used.

The fees claiming mechanics for veYB holders:

• veYB holders can claim fees at any time

• To initiate a claim, the user must call the claim function. If the user has never claimed fees before, all epochs starting from the first one are checked for potential fee claims. If fees have been claimed before, it checks the epochs starting from the one after the most recent claim.

• For each epoch, the user’s veYB share is calculated as the ratio of the user’s veYB balance to the total veYB in that epoch. As a result, the veYB holders receive a share of the fees scheduled for distribution according to their veYB share for that epoch.

The Claim option available at YB Lock Page.

Fees will be available for veYB holders starting with the Fee Switch. These fees are comprised of legacy pool collected fees, new implementation pool fees (which have already been transferred to the Yield Basis: DAO contract), and undistributed fees from existing pools:

Upon the Fee Switch, fees generated by the protocol were technically attributed to the Yield Basis: DAO contract and veYB holders could use only the share of planned utility - vote on YB emission distribution & protocol decisions via vote-escrowed governance mechanics.

After the Fee Switch event, veYB holders will have an opportunity to participate in protocol fee distribution, claiming their share of captured fees.

This will not only deliver the planned YB functionality to YieldBasis veYB lockers, but will also have the following impact on YieldBasis and Curve ecosystems:

• By activating the complete YB utility the revenue loop in the token economics will close, enabling the system to operate as designed

• It means that CurveDAO veCRV governance participants receive YB that earns BTC fees (as veYB position), which strengthens the value proposition for veCRV governance allocating rewards to crvUSD pools

• As a result, the synergistic effect of veYB fees on veCRV voter decisions and ultimately crvUSD CRV rewards, liquidity depth, and peg is possible

YieldBasis operates in accordance with applicable MiCA and AML/CFT requirements. This publication is intended solely for informational purposes and does not constitute financial advice, solicitation, or an offer to invest. Past performance does not guarantee future results. All distributions are executed programmatically on-chain and remain subject to governance approval and smart-contract conditions.

TL;DR

• Activated Governance proposal introduces the Fee Switch - the distribution of captured fees to veYB holders

• The 17.13 BTC (approximately ~$1.578m) of collected fees began to be distributed to veYB holders

• The Fee Switch enables the full scope of YB utility and has a synergistic impact on YieldBasis DAO, Curve DAO, and crvUSD

Today, we are thrilled to announce the YB Fee Switch - a long-awaited protocol milestone. This article focuses on explaining the Fee Switch activation, distribution, and claim processes, as well as the impact of YB’s full utility activation

Details:

1. YieldBasis fees explanation

2. YB Fee Switch: activation, distribution, and stats

3. The impact YB fee switch

YieldBasis charges fees on trading activity in liquidity pools. This can be accounted as protocol revenue, which is further split between liquidity providers and YB DAO governance participants (veYB holders). The exact split proportion is algorithmic and will be explained below.

YieldBasis LPs have two options for generating yield from provided liquidity: (a) hold the ybBTC LP token and receive BTC-denominated trading fees (b) stake ybBTC, forgo BTC-denominated trading fees and participate in YB emissions.

The exact fee split (effective admin_fee) depends on the ybBTC stake_rate, or the share of ybBTC LPs receiving YB token emissions:

For example, when 50% of ybBTC is staked, unstaked tokens receive 64% of all fees and veYB holders receive the remaining 36%.

Fee Switch event enables distribution of the charged admin fee to YieldBasis DAO participants (veYB holders).

Note that YB tokens not locked in veYB do not receive fees.

You can lock your YB on the YB Lock Page.

Fee Switch activation

To activate the Fee Switch and initiate the distribution of fees to veYB holders, YieldBasis DAO approved this action via the governance proposal. Already passed.

veYB holders are the recipients of all fees, both those already captured and those collected in the future. The FeeDistributor contract will receive fees collected from all pools, including legacy pools, new implementation pools, and any new deployments.

The FeeDistributor contract temporarily holds BTC-denominated fees owned by veYB holders that await claiming. When fees are received by the FeeDistributor, the fee distribution can be initiated. Thus, the contract balance is a sum of fees that are already available for claiming by veYB holders (distribution was initiated) and those that are awaiting distribution initiation.

Fee Switch: distribution to veYB holders

In order to initiate the distribution of fees from the FeeDistributor contract, the permissionless fill_epochs() function must be called. The existing (undistributed) fees will be distributed equally over four future epochs. Each epoch lasts one week and starts at 00:00 UTC on Thursdays.

For example, there is 1 BTC in the FeeDistributor contract and someone calls the fill_epochs() function. As a result, 1 BTC will be assigned for equal distribution across the next four epochs, at a rate of 0.25 BTC per epoch. Fee distribution is only scheduled exclusively for future epochs, meaning that if fill_epochs() is called on Wednesday, the next four epochs starting at 00:00 UTC on Thursday will be used.

The fees claiming mechanics for veYB holders:

• veYB holders can claim fees at any time

• To initiate a claim, the user must call the claim function. If the user has never claimed fees before, all epochs starting from the first one are checked for potential fee claims. If fees have been claimed before, it checks the epochs starting from the one after the most recent claim.

• For each epoch, the user’s veYB share is calculated as the ratio of the user’s veYB balance to the total veYB in that epoch. As a result, the veYB holders receive a share of the fees scheduled for distribution according to their veYB share for that epoch.

The Claim option available at YB Lock Page.

Fees will be available for veYB holders starting with the Fee Switch. These fees are comprised of legacy pool collected fees, new implementation pool fees (which have already been transferred to the Yield Basis: DAO contract), and undistributed fees from existing pools:

Upon the Fee Switch, fees generated by the protocol were technically attributed to the Yield Basis: DAO contract and veYB holders could use only the share of planned utility - vote on YB emission distribution & protocol decisions via vote-escrowed governance mechanics.

After the Fee Switch event, veYB holders will have an opportunity to participate in protocol fee distribution, claiming their share of captured fees.

This will not only deliver the planned YB functionality to YieldBasis veYB lockers, but will also have the following impact on YieldBasis and Curve ecosystems:

• By activating the complete YB utility the revenue loop in the token economics will close, enabling the system to operate as designed

• It means that CurveDAO veCRV governance participants receive YB that earns BTC fees (as veYB position), which strengthens the value proposition for veCRV governance allocating rewards to crvUSD pools

• As a result, the synergistic effect of veYB fees on veCRV voter decisions and ultimately crvUSD CRV rewards, liquidity depth, and peg is possible

YieldBasis operates in accordance with applicable MiCA and AML/CFT requirements. This publication is intended solely for informational purposes and does not constitute financial advice, solicitation, or an offer to invest. Past performance does not guarantee future results. All distributions are executed programmatically on-chain and remain subject to governance approval and smart-contract conditions.