Yield Basis Deposits Jump 120% as Investors Keep BTC Exposure

Deposits into Yield Basis’ Hybrid Vaults climbed from 1.7 million crvUSD to 3.8 million crvUSD in less than two weeks, an increase of about 2.1 million crvUSD between May 25 and June 9. The vaults are designed to generate yield denominated in bitcoin and ether while letting investors retain exposure to those assets.

The Hybrid Vaults let users deposit BTC and borrow an equal value of crvUSD. That creates a two-times leveraged BTC/crvUSD liquidity position on Curve. A built-in automated market maker and a virtual pool rebalance the position automatically. By keeping debt at 50% of the position, Yield Basis says the liquidity position can move roughly one-to-one with the bitcoin price, while the position collects trading fees. Rebalancing costs are paid from interest on the borrowed crvUSD.

Yield Basis reported total value locked of about $126 million, with more than $100 million held in BTC pools. The protocol has recorded roughly $3.3 billion in cumulative trading volume and $3.95 million in protocol fees. Initial Hybrid Vault liquidity includes contributions from WETH and cbBTC pools.

The vaults are intended to address a known AMM issue: when bitcoin rises sharply, automated market maker liquidity providers can lag behind passive holders. Yield Basis estimates that a 2x increase in bitcoin price can leave LPs about 5.7% behind simple holders. The Hybrid Vaults combine crypto-denominated positions with yield-bearing crvUSD in a single strategy.

Michael Egorov, founder of Curve Finance and Yield Basis, commented, “Investors are increasingly looking for ways to generate yield or access liquidity without fully exiting their positions.” He noted the strategy offers users more flexibility across different market conditions.

The Yield Basis team notes the approach has been backtested and modeled, and that live-market performance will be the next test. The protocol and market participants will observe whether the vaults sustain their assumed risk profile and whether fees and interest costs remain manageable in active trading conditions.