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Michael Egorov is back with Yield Basis, a new protocol designed to eliminate impermanent loss through leveraged Curve crypto pools. The move rethinks both tokenomics and multi-chain architecture. Yield Basis introduces a per-chain token model, avoiding cross-chain bridges in favor of localized governance and distribution.

In other news…are you coming to Permissionless IV Brooklyn in June? Tickets are $399 (for now!), but you can get one for half price with a unique 50% off discount code if you successfully refer 10 new subscribers to the 0xResearch newsletter. Scroll down for details.

Axiom leading trading bots:

In recent weeks, the Y Combinator-backed trading bot Axiom has slowly begun to dominate market share on Solana, surpassing 2024’s market leaders Photon, BullX and Trojan.

What’s Axiom doing differently? Axiom is teasing an airdrop with points, offering referral rewards and a tiered trader leveling system — but all that is par for the course with memecoin trading bots. The key was combining the two most popular trading products right now — Solana memecoins and Hyperliquid perps — into one interface, Blockworks’ Danny Knettel told me.

Telegram trading bots are to DEXs what Robinhood was to traditional trading platforms. Robinhood popularized commission-free trading, while Telegram trading bots democratized the use of technical tools like MEV-protected execution and sniper tools for average traders. 

Despite its popular usage by degen traders, Solana trading bots still made up a mere 5-10% of total Solana DEX volumes in 2024.

For more on this niche sector, see Blockworks Research’s report by Danny Knettel.

— Donovan Choy

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DeFi’s ‘Bitcoin black hole’

Michael Egorov is no stranger to token incentive mechanisms. As the founder of Curve, he pioneered vote-escrow (ve) tokenomics to juice the growth of the stablecoin AMM. But his new protocol, Yield Basis, is built for a different kind of user: “people who want to earn something on mostly Bitcoin,” as Egorov told Blockworks.

At its core, Yield Basis is an attempt to eliminate LP impermanent loss by leveraging liquidity. Egorov explains: “If you leverage liquidity by a factor of two and keep this leverage, then the pricing of liquidity which gives you impermanent loss actually disappears.” The result, he says, is LP positions that behave like spot BTC exposure — with none of the usual downside when prices move violently.

The mechanism builds on Curve’s liquidity pools, but with key upgrades. Egorov has engineered the system to “re-leverage” automatically, keeping the 2x ratio constant. “It’s very important to keep this ratio very, very precise,” he said, noting that “a special AMM will do it for you.”

That precision, he argues, is what distinguishes Yield Basis from Fluid. “From what I understand, [Fluid is] doing it rather manually,” he said. “They’re earning a lot in fees, but they are losing more when this process of moving the range happens.” With Yield Basis, by contrast, the rebalancing logic is automated and driven by arbitrage, preserving capital value in BTC terms. “You want your number of bitcoin to smoothly go up rather than ever go down.”

Of course, there are new protocol tokens involved. And the tokenomics design is no less ambitious. LPs must choose: Either earn real BTC-denominated yield from trading fees, or forgo that income in exchange for emissions of the protocol’s first native token, $YB. “We only distribute real revenues to liquidity providers who did not choose to earn YB inflation,” Egorov said.

That dynamic turns YB emissions into something closer to mining than farming. “Every single $YB token has an intrinsic cost of being mined,” wrote researcher Vasily Sumanov in a recent X article. “Users efficiently buy $YB from the protocol at a certain price (or bear a certain cost to obtain them).”

The token’s utility follows a familiar Curve model. YB can be locked into veYB to direct emissions and capture BTC yield, launching what some are already calling Curve Wars 2.0. “When bootstrapping a new project, it’s actually good to have a new token,” Egorov said — and there is expected to be one for each chain deployment with “its own governance on every chain.”

That decision, which is likely to raise some eyebrows, is driven partly by a desire to remove any need for bridging, and partly because “having one token per chain can open good business opportunities to align with local ecosystems in non-ETH chains,” Egorov said.

Despite being a standalone protocol, Egorov insists Curve also stands to benefit. “10% of the fully diluted YB token distribution will go toward Curve,” he said. Plus, Curve’s collateralized stablecoin, crvUSD, is central to the architecture. “These YB tokens can be used to buy votes for crvUSD liquidity…that’s revenues for the DAO if you count vote incentives as revenues.”

The Curve DAO directly funds Egorov’s company, Swiss Stake AG. Aave founder Stani Kulechov recently received pushback from Aave token holders about his plans to launch a new protocol under similar terms.

Yield Basis quietly raised $5 million in February, and is not yet live. It will launch first on Ethereum mainnet. When? “Once I’m sure the code is safe and ready,” Egorov said. “I want to see it performing in real life.”

— Macauley Peterson

How Ethena is redefining digital finance | Guy Young

How permissionless is Ethena’s new Converge chain?

Guy Young: Converge will not have a permissionless validator set, but it won’t be fully permissioned as well. Validators will play a role within the network as a safety mechanism for institutional capital. In the event of a hack, validators will have the ability to throttle flows in and out of the chain.

Why does Ethena need a dollar-backed stablecoin like USDtb?

Guy Young: USDtb is a useful product for us to tap into the borrow demand within DeFi. By backing USDe with USDtb, we can lend them into a lending market like Aave and double dip on the yields. So you get the T-bill yield, plus the lending rates in Aave, stacked together. It’s a neat product that fits into our distribution strategy with the CEXs. USDtb is not a big profit center for us but it allows us to manage the backing of USDe without leaking that value to Tether or Circle.

How does Ethena handle the risk of protocols hardcoding USDe to a dollar value?

Guy Young: My view is that Ethena should have a design that allows toggling between the hardcoded price and the market price. What you want is a time window where the price of USDe is attached to market prices, but if we determine that it wasn’t a temporary price dislocation and funky liquidation on the exchange that the asset has lost 10% of its underlying collateral, then humans step in with a multisig and resolve it.

Build Fast. Ship Loud. Before the Crowd Shows Up.

36 hours. $100K+ on the line.

Before Permissionless kicks off, builders will be deep in the code.
Push something onchain, on mainnet, in front of the right people.

We’ll cover:

• Food, caffeine, WiFi, vibes

• Technical mentorship, workshops

• A free ticket to Permissionless IV

• Eyes from top investors and protocols

📅 June 22–23 | Brooklyn, NY