The entire Yield Basis lifecycle has taken place during a bear market. Operational results:
5.4–9.9% BTC APY (TRD ~0% as of 26/04/2026), $3.84M in fees distributed to $YB lockers
No security incidents across the protocol or its dependencies
99% TVL retention, while the broader market lost 80B$+ (~50% since Oct 10)
Launching the brand new yield primitive on a Bear market works as a genuine stress test.
Most innovations work on paper.
But do they hold when:
markets are under extreme stress
the cybersecurity landscape is hostile (open-source code + AI widely accessible)
DeFi sentiment is pessimistic, with persistent risk-off and capital outflows
Yield Basis architecture and yield model have proven robust in these conditions.
Below, we review performance, the security stack, and the protocol’s next steps.
Since deployment, Yield Basis pool model was tested by the extremely volatile market which led to multiple improvements targeting pool operation and $crvUSD peg support.
Below we present the timeline of protocol’s journey and key events:
Extreme market volatility began immediately after deployment, leading to the rollout of v2 pools (now live) and the development of v3 pools (next-gen design with significantly shorter TRD ranges).
Despite the BTC downtrend, multiple DeFi exploits, and persistent risk-off sentiment, Yield Basis retained 99% of TVL and generated up to 9.9% native BTC yield for LPs.
TRD: After BTC dropped from 90k$ to 60k$ in just several days, ybBTC LP positions experienced up to ~17% TRD that recovered in ~11 weeks at ~$76k price. This practically demonstrates that TRD is not IL: IL could recover only when prices are back to the initial values.
*TRD (Temporarily Redemption Discount) is a temporary reduction of LP position value due to YB Pool imbalance caused by rapid BTC price movements. The rebalancing process brings TRD back to zero over time.
LPs remained with Yield Basis during the TRD times. Even after the recovery phase and subsequent withdrawals, Yield Basis initial pool capacity remains approximately 99% utilized. Such a behavior triggered additional R&D and v3 pools creation (with much faster TRD recovery) as a result.
During such complicated times for Defi (-50% TVL outflow since 10 Oct), Yield Basis operates the most liquid volatile pool in the market and ranks #2 across all liquidity pools (great to see that #1 is Curve):
Throughout this period, the YB DAO captured $3.84M of protocol fees on top of LP yield.
The chart below shows key BTC volatility events versus DAO fees (through Feb 17):
YB DAO fees vs. BTC Volatility Index (green line). Source: Valueverse MID Q1 YB Report
There were no security incidents with Yield Basis itself or any of its dependencies during the entire operational timeline.
The security stack is based on three core ideas:
Battle-tested infrastructure as a key partner - Curve
Decentralization-first approach - DAO control, no multi-sig dependency, no centralized infrastructure used
Dependencies minimalism - less is more
Below we explore it in detail.
Yield Basis dependencies
As shown, the only dependency beyond Curve is BTC wrappers. There is no alternative way to deploy BTC on Ethereum, so the pools rely on industry-standard assets widely used across lending markets and DEXs (cbBTC, WBTC, tBTC).
The only multi-sig used in the stack is The Emergency Admin. It can pause ("kill") individual markets and force emergency withdrawals. It doesn’t have an option to access users' funds or update any protocol parameters; it is an emergency-only tool that can pause markets.
The only authority on contracts code is YB DAO, requiring an onchain governance process for every update. Our vision is that such an approach is a way how Defi must operate to preserve user’s safety.
The Bear market triggered further development, leading to the introduction of Hybrid Vaults and the v3 pool design.
These upgrades are aimed at delivering a BTC yield product that not only captures fees, but also features a significantly improved position profile (shorter TRD ranges) while maintaining stability of the crvUSD peg during operation.
Below we present summary for the future protocol expansion:
Yield Basis next steps:
new assets are coming to Yield Basis with v3 pools
existing pools will migrate to v3 standards
all pools will have Hybrid Vault feature to scale TVL safely
New v3 pools and Hybrid Vaults are designed to drive additional TVL inflows, further strengthening Yield Basis as a provider of most liquid BTC and ETH pools in Defi.
It’s worth mentioning that besides being a liquidity backbone for Ethereum Defi, the pools generate yield without impermanent loss.
This article is for informational purposes only and is not financial, legal, tax, or investment advice. Nothing herein is an offer, solicitation, or recommendation. Past performance and protocol metrics are not guarantees of future results. DeFi involves risks, including potential loss of capital. Future upgrades are subject to audits, governance, market conditions, and applicable laws.