1. Migration to New Pools: A transition to an improved pool version is planned, reducing the volatility of value calculations by a factor of 10. This addresses issues with oracles.

2. Compensation for LP Stakers: Losses for stakers (~54.34 BTC) will be compensated: 43.95 BTC for overpaid admin fees + 26 BTC in YB tokens, resulting in a total profit of ~15.4 BTC.

3. Migration Process: Launch will follow an announcement (48 hours prior) via a contract on yieldbasis.com. It is automated, but each individual needs to perform it, and quick migration is recommended.

4. Reason for Update: The use of an incorrect oracle in the old pool version led to overpayment of fees (48.76 BTC instead of 4.81 BTC). The new version resolves this.

5. Future Development: Plans include: switching veYB, scaling TVL to 500 million $, adding ETH pools, improving Curve pools underlying YB, and optimizing for dynamic fees and higher average yield.

Original @yieldbasis post

Migration awaits. If you’re a staked liquidity provider who has observed your BTC-denominated value decrease during recent volatility, we’ve identified the mechanism behind this and are deploying an improved implementation. Here’s what you need to know:

What’s happening: We’re migrating to an improved pool implementation that significantly reduces the variance of value calculations during volatility (approximately an order of magnitude more stable).

What does this mean for staked LPs affected by recent volatility?

You’ll receive a proportional distribution accounting for the variance between the legacy and updated calculations. It will be sent directly to your LP wallet no claim required.

Timeline: Migration begins following contract deployment. We’ll announce at least 48 hours prior to the start of migration.

Actions required by LPs: We recommend LPs migrate once the migration starts. A dedicated migration contract has been created. The UI will be available at yieldbasis.com once the migration is initiated.

The previous implementation of LT (so-called “leveraged token” or ybBTC) contained a point for improvement related to its price oracle:

1. The protocol profit (and its further split between staked LPs / unstaked LPs / admin fee) is based on an internal profit estimate.

2. The profit estimate uses oracles, and the legacy implementation was exposed to volatility in profit estimation due to the specific oracle design.

3. The updated implementation significantly reduces the volatility impact on profit splits, ensuring correct and fair operation.

Practical impact on profits distribution

• In cases of extreme price volatility, veYB admin fees were exposed to fluctuations meaning they could have been temporarily over- or under-charged. The main case observed was an admin fee overcharge.

• Due to this overcharge, staked LP holders experienced a temporary reduction in LP position value, while unstaked ybBTC holders received excess fees.

More details explaining origin of losses for staked ybBTC

• The source of staked LP losses originates from the same factor causing bidirectional volatility in veYB/admin fee values.

• These losses occur only within internal computations, no value leaked outside the protocol.

• Since the issue originated in the internal value split, the other side of that split absorbed the variance: overcharged veYB fees and unstaked ybBTC holders received the excess value.

The computation for system profits and their using the updated oracle model is presented below:

Summary:

• Fundamental protocol profitability: ~1% for ybBTC during the last month (Relative Growth section). This represents pure LP income excluding admin fees and YB emissions.

• Admin fee charged: 48.76 BTC, correct fee: 4.81 BTC > 43.95 BTC difference to be returned.

• Non-staked LP PnL: 16.11 BTC

• Staked LP PnL: −54.34 BTC (includes temporary overcharge impact)

• System net profit: 9.2 BTC (correct amount for unstaked LPs + admin fee)

Thus, 43.95 BTC of the 54.34 BTC temporary loss will be covered from the overcharged admin fee.

Additionally, staked LPs have received 4,704,361 liquid YB tokens (~26 BTC) as part of YB emissions, fully covering the remaining difference and resulting in an estimated ~15.4 BTC total profit for staked LPs.

See full metrics here.

The new implementation

The new version of the LT contract is designed for seamless LP migration:

• LT and LiquidityGauge contracts will be redeployed and updated.

• Curve ybBTC-crvUSD cryptopools remain unchanged.

• After migration, each LP position will retain its relative place in the pool spread, as the oracle value remains consistent.

Old LT contracts will remain operational to allow voluntary migration at any time.

A dedicated migration contract has been created. The UI will be available at yieldbasis.com once migration begins.

Migration will start following a public announcement after contract deployment and UI launch.

Overcharged admin fee distribution procedure

1. The final amount of overcharged admin fees and the corresponding distribution will be calculated once 75% of total TVL has migrated.

2. Current numbers are preliminary and subject to adjustment.

3. The overcharged amount will be distributed automatically to each staked LP wallet; no claim required.

4. As early product adopters, staked LPs will also be eligible for future protocol testing rewards.

Migration process

Handled automatically by the migration contract, no manual actions required.

Migration of unstaked ybBTC:

1. Withdraw funds from the old LT contract.

2. Reallocate crvUSD to the new LT contract.

3. Deposit funds into the new LT contract.

Migration of staked ybBTC:

1. Unstake ybBTC tokens.

2. Migrate unstaked tokens as described above.

3. Restake them in the new LT contract.

(Implemented in the migration contract: lines 8–112 for unstaked migration, lines 123–134 for staked migration.)

• Should I unstake before migrating?

No, the entire migration process is automatically handled by the migration contract.

• Do I have to migrate immediately?

No. There is no time limit for migration. The legacy contracts and UI will work and you can migrate at any time.

However, the faster you migrate, the better. After 75% TVL will migrate, the overcharged admin fee will be recalculated and prepared for distributing to staked LPs.

• What if there’s high volatility during migration?

After migration, the new position has the same place in the pool spread as before migration.

The volatility losses occurring prior to the majority of TVL migrates will be taken into account.

• Will the improved implementation prevent all value fluctuations?

No, it is not possible to prevent all value fluctuations. However, the updated implementation will have an order of magnitude lower value fluctuations. Note that value fluctuations related to position in the spread still exist and could be comparable to twice the cryptopool fees (which are around 1%).

• How do I know the new implementation works better?

We rigorously simulated pools’ operation, and all calculations presented above also use the new implementation. With the new implementation value will have an order of magnitude less volatility and value split will work as it was initially proposed.

• What about the protocol’s broader roadmap?

The next steps after migration are following ones:

- veYB fee switch;

- TVL scaling: $500M is likely to be the next step;

- Pools with ETH (or staked ETH) and other Bitcoin wrappers;

- Improvements in Curve cryptopools which can increase protocol’s profitability.

The Curve pool withdrawal fee

The first step in the migration process for unstaked ybBTC is to withdraw funds from the yBTC contract. This results in a liquidity withdrawal from the underlying Curve pool with a fee associated with this process. Although this fee should not be significant given that the Curve pool is generally well-balanced, it is unavoidable because withdrawing funds from the yBTC contract also involves withdrawing them from the Curve pool. This fee is zero when Curve pools are balanced.

This publication is intended solely for informational purposes and does not constitute investment advice, solicitation, or financial promotion. Past performance or internal estimates are not guarantees of future results. All on-chain operations are transparent and governed by smart-contract logic verified on Ethereum mainnet.

1. Migration to New Pools: A transition to an improved pool version is planned, reducing the volatility of value calculations by a factor of 10. This addresses issues with oracles.

2. Compensation for LP Stakers: Losses for stakers (~54.34 BTC) will be compensated: 43.95 BTC for overpaid admin fees + 26 BTC in YB tokens, resulting in a total profit of ~15.4 BTC.

3. Migration Process: Launch will follow an announcement (48 hours prior) via a contract on yieldbasis.com. It is automated, but each individual needs to perform it, and quick migration is recommended.

4. Reason for Update: The use of an incorrect oracle in the old pool version led to overpayment of fees (48.76 BTC instead of 4.81 BTC). The new version resolves this.

5. Future Development: Plans include: switching veYB, scaling TVL to 500 million $, adding ETH pools, improving Curve pools underlying YB, and optimizing for dynamic fees and higher average yield.

Original @yieldbasis post

Migration awaits. If you’re a staked liquidity provider who has observed your BTC-denominated value decrease during recent volatility, we’ve identified the mechanism behind this and are deploying an improved implementation. Here’s what you need to know:

What’s happening: We’re migrating to an improved pool implementation that significantly reduces the variance of value calculations during volatility (approximately an order of magnitude more stable).

What does this mean for staked LPs affected by recent volatility?

You’ll receive a proportional distribution accounting for the variance between the legacy and updated calculations. It will be sent directly to your LP wallet no claim required.

Timeline: Migration begins following contract deployment. We’ll announce at least 48 hours prior to the start of migration.

Actions required by LPs: We recommend LPs migrate once the migration starts. A dedicated migration contract has been created. The UI will be available at yieldbasis.com once the migration is initiated.

The previous implementation of LT (so-called “leveraged token” or ybBTC) contained a point for improvement related to its price oracle:

1. The protocol profit (and its further split between staked LPs / unstaked LPs / admin fee) is based on an internal profit estimate.

2. The profit estimate uses oracles, and the legacy implementation was exposed to volatility in profit estimation due to the specific oracle design.

3. The updated implementation significantly reduces the volatility impact on profit splits, ensuring correct and fair operation.

Practical impact on profits distribution

• In cases of extreme price volatility, veYB admin fees were exposed to fluctuations meaning they could have been temporarily over- or under-charged. The main case observed was an admin fee overcharge.

• Due to this overcharge, staked LP holders experienced a temporary reduction in LP position value, while unstaked ybBTC holders received excess fees.

More details explaining origin of losses for staked ybBTC

• The source of staked LP losses originates from the same factor causing bidirectional volatility in veYB/admin fee values.

• These losses occur only within internal computations, no value leaked outside the protocol.

• Since the issue originated in the internal value split, the other side of that split absorbed the variance: overcharged veYB fees and unstaked ybBTC holders received the excess value.

The computation for system profits and their using the updated oracle model is presented below:

Summary:

• Fundamental protocol profitability: ~1% for ybBTC during the last month (Relative Growth section). This represents pure LP income excluding admin fees and YB emissions.

• Admin fee charged: 48.76 BTC, correct fee: 4.81 BTC > 43.95 BTC difference to be returned.

• Non-staked LP PnL: 16.11 BTC

• Staked LP PnL: −54.34 BTC (includes temporary overcharge impact)

• System net profit: 9.2 BTC (correct amount for unstaked LPs + admin fee)

Thus, 43.95 BTC of the 54.34 BTC temporary loss will be covered from the overcharged admin fee.

Additionally, staked LPs have received 4,704,361 liquid YB tokens (~26 BTC) as part of YB emissions, fully covering the remaining difference and resulting in an estimated ~15.4 BTC total profit for staked LPs.

See full metrics here.

The new implementation

The new version of the LT contract is designed for seamless LP migration:

• LT and LiquidityGauge contracts will be redeployed and updated.

• Curve ybBTC-crvUSD cryptopools remain unchanged.

• After migration, each LP position will retain its relative place in the pool spread, as the oracle value remains consistent.

Old LT contracts will remain operational to allow voluntary migration at any time.

A dedicated migration contract has been created. The UI will be available at yieldbasis.com once migration begins.

Migration will start following a public announcement after contract deployment and UI launch.

Overcharged admin fee distribution procedure

1. The final amount of overcharged admin fees and the corresponding distribution will be calculated once 75% of total TVL has migrated.

2. Current numbers are preliminary and subject to adjustment.

3. The overcharged amount will be distributed automatically to each staked LP wallet; no claim required.

4. As early product adopters, staked LPs will also be eligible for future protocol testing rewards.

Migration process

Handled automatically by the migration contract, no manual actions required.

Migration of unstaked ybBTC:

1. Withdraw funds from the old LT contract.

2. Reallocate crvUSD to the new LT contract.

3. Deposit funds into the new LT contract.

Migration of staked ybBTC:

1. Unstake ybBTC tokens.

2. Migrate unstaked tokens as described above.

3. Restake them in the new LT contract.

(Implemented in the migration contract: lines 8–112 for unstaked migration, lines 123–134 for staked migration.)

• Should I unstake before migrating?

No, the entire migration process is automatically handled by the migration contract.

• Do I have to migrate immediately?

No. There is no time limit for migration. The legacy contracts and UI will work and you can migrate at any time.

However, the faster you migrate, the better. After 75% TVL will migrate, the overcharged admin fee will be recalculated and prepared for distributing to staked LPs.

• What if there’s high volatility during migration?

After migration, the new position has the same place in the pool spread as before migration.

The volatility losses occurring prior to the majority of TVL migrates will be taken into account.

• Will the improved implementation prevent all value fluctuations?

No, it is not possible to prevent all value fluctuations. However, the updated implementation will have an order of magnitude lower value fluctuations. Note that value fluctuations related to position in the spread still exist and could be comparable to twice the cryptopool fees (which are around 1%).

• How do I know the new implementation works better?

We rigorously simulated pools’ operation, and all calculations presented above also use the new implementation. With the new implementation value will have an order of magnitude less volatility and value split will work as it was initially proposed.

• What about the protocol’s broader roadmap?

The next steps after migration are following ones:

- veYB fee switch;

- TVL scaling: $500M is likely to be the next step;

- Pools with ETH (or staked ETH) and other Bitcoin wrappers;

- Improvements in Curve cryptopools which can increase protocol’s profitability.

The Curve pool withdrawal fee

The first step in the migration process for unstaked ybBTC is to withdraw funds from the yBTC contract. This results in a liquidity withdrawal from the underlying Curve pool with a fee associated with this process. Although this fee should not be significant given that the Curve pool is generally well-balanced, it is unavoidable because withdrawing funds from the yBTC contract also involves withdrawing them from the Curve pool. This fee is zero when Curve pools are balanced.

This publication is intended solely for informational purposes and does not constitute investment advice, solicitation, or financial promotion. Past performance or internal estimates are not guarantees of future results. All on-chain operations are transparent and governed by smart-contract logic verified on Ethereum mainnet.