Curve Finance launches Yield Basis: A 60 million USD plan to turn CRV into an income-generating asset

The founder of Curve Finance, Michael Egorov, has just announced a proposal on the Curve DAO governance forum, aimed at providing investors holding tokens of this decentralized exchange with a more direct way to generate income.

Introducing the Yield Basis protocol, designed to distribute sustainable profits to CRV holders participating in staking and governance voting, in exchange for receiving veCRV tokens. This is a step beyond the irregular airdrop model that has dominated the token economy of Curve until now.

According to the plan, Curve will issue 60 million USD stablecoin crvUSD before deploying Yield Basis. The capital raised from the sale of crvUSD will be allocated to three pools focused on Bitcoin, including WBTC, cbBTC, and tBTC, each with a limit of 10 million USD.

Yield Basis is expected to distribute between 35% to 65% of profits to veCRV holders, while 25% of the Yield Basis tokens will be held for the Curve ecosystem. The voting for this proposal will take place from September 17 to 24.

The goal of the protocol is to attract institutional and professional traders through transparent, sustainable Bitcoin yields, while avoiding the risk of temporary (impermanent loss) – a common issue in automated market makers (AMM).

*The chart shows that the double leverage can eliminate the risk of temporary loss (CRV)*Temporary losses occur when the value of the assets locked in the liquidity pool changes compared to direct holding, causing liquidity providers to receive less profit (or even incur losses) when withdrawing funds.

The new proposal comes amid Egorov's own financial difficulties. In 2024, he faced several large-scale liquidations related to leveraged loans to buy CRV.

In June 2024, over 140 million USD worth of CRV was liquidated after Egorov heavily borrowed to support the token price, causing Curve to take on a bad debt of 10 million USD. More recently, in December 2024, Egorov was further liquidated for 918,830 CRV ( equivalent to about 882,000 USD) after the token price plummeted by 12% in just one day. On X, he explained that this position was linked to funds from the uWu hack, and the liquidation was essentially a process of repaying the commitments of the uWu founder.

In the last 24 hours, the price of CRV has increased by about 7%.

Thạch Sanh