yieldbasis (@yieldbasis): Hybrid Vaults are Coming to Yield Basis

Hybrid Vaults are Coming to Yield Basis TL;DR Hybrid Vaults introduce per-LP caps, enabling scalable growth while maintaining $crvUSD peg stability It is a concentrated volatility bet for LPs offering dual $BTC + stablecoin yields driven by market volatility The proposal to deploy the first Hybrid Vault for $WETH with a $25m cap is set to go live in the coming days. Get ready to vote. Why Hybrid Vaults exist Yield Basis pools have capacity limits for a reason: The protocol uses $crvUSD provided by Curve DAO to create leveraged liquidity positions Ultimately, $crvUSD is used not only for leverage but also acts as intermediary for $BTC/$ETH swap for other stablecoins. If Yield Basis grew too large relative to the $crvUSD supply, significant $ETH/$BTC volatility could create outsized swaps that pressure the $crvUSD peg. Demand for Yield Basis exceeds current limits: YB pools fill up within minutes of each cap raise and new depositors are waiting for capacity to open up. The protocol needs a way to grow without increasing the pressure on the crvUSD peg. Hybrid Vaults solve this by tying TVL inflows directly to $crvUSD demand. When you deposit crvUSD into a Hybrid Vault, you're creating direct demand for $crvUSD - either by minting or buying crvUSD. This supports the peg and in return Yield Basis will provide you with a personal cap that lets you deposit into the Yield Basis pool beyond the normal caps. Hybrid Vaults don't remove all limits. Yield Basis operates within a $crvUSD credit line allocated by Curve DAO, currently set at 1 billion crvUSD, meaning up to $500M million TVL limit at 2x leverage. Hybrid Vaults are a way to scale toward that ceiling while preserving peg stability at every step. Hybrid Vaults as a dual yield product To enter the Hybrid Vault, LPs deposit $crvUSD + $BTC (0.55 $crvUSD per $1 of $BTC provided). It means that LPs owns $ybBTC earning Bitcoin yield sourced from volatility, and $crvUSD in $scrvUSD at llamalend, earning fees from mint markets. Other $crvUSD yield options beyond $scrvUSD will be announced later. Thus, Hybrid Vault is a concentrated bet on volatility earning diversified $BTC+stable yield supercharged in volatile periods. Note: $crvUSD is supplied directly to the $scrvUSD contract which is an isolated module that accrues fees from the $crvUSD mint markets. User-provided $crvUSD has no exposure to the underlying Curve $BTC-$crvUSD pool. Hybrid Vault: Key Details One vault per address, supporting up to 16 pool positions simultaneously No deposit or withdrawal fees on the Hybrid Vault itself - standard YB pool fees apply to your LP position as usual Personal Caps are personal - other users' deposits don't affect your capacity Hybrid Vault deposits are subject to their own caps, which are separate from the regular pool caps. These caps can be adjusted through DAO governance. The first Hybrid Vault market is $WETH. Additional assets will follow TRD applies the same way and affects Hybrid Vault positions exactly as it does regular positions. Emergency withdrawals are supported if a pool enters an abnormal state How Hybrid Vaults work Deposit crvUSD/scrvUSD to create your Personal Cap The $crvUSD that is deposited is automatically staked into $scrvUSD, Curve's yield-bearing stablecoin savings vault. This earns a passive yield (currently 4.5% APY) and determines how much crypto you can deposit into the pool. Currently for every $100 of crypto you want to deposit, you need $55 of $crvUSD. This ratio is set by the YB DAO and can be adjusted through governance in the future. Deposit your crypto asset in the YB pool. Your $crvUSD backing unlocks access to the Yield Basis pool. Deposit $WETH (or other supported assets as they launch) into the Yield Basis pool through the vault. Your position is identical to what happens in a regular pool deposit. What you earn: $scrvUSD yield: Your staked $crvUSD earns the $scrvUSD savings rate (currently ~4.5% APY). This accrues automatically with no action required. Trading fees or $YB emissions: Your crypto in the Yield Basis pool earns either trading fees (if you choose the Yield Bearing Vault) or $YB token emissions (if you choose the Staked Vault) (exactly the same as a regular pool deposit). Withdrawals Withdrawals follow a specific order: reduce your crypto position first, then withdraw your $crvUSD. The vault requires that your $crvUSD backing covers 55% of your remaining pool position value. Fully exiting your pool position unlocks all your $crvUSD. Liquidity Provider Guide The detailed guide on liquidity deposits and withdrawals is here. Security The Hybrid Vault contracts have been audited by ChainSecurity and MixBytes. The code is open source and available on Github. Note: Hybrid Vaults are governed by the YB DAO. Pool caps, stablecoin fractions, and supported markets are set through governance. The vision is to gradually increase utilization of the $crvUSD credit line through Hybrid Vault adoption, scaling toward the $1 billion limit while preserving peg stability at every step. Disclaimer: This publication is provided for informational purposes only and does not constitute financial, investment, legal, or tax advice, nor does it represent an offer or solicitation to buy, sell, or hold any digital assets. All mechanisms described are subject to governance approval by the Yield Basis DAO and are implemented via smart contracts that may change over time. Participation in DeFi protocols involves risks, including but not limited to smart contract risk, market volatility, liquidity constraints, and potential loss of funds. Any examples, estimates, or APY figures presented are illustrative, based on current conditions, and are not guaranteed. Past or hypothetical performance does not guarantee future results. Yield Basis operates within applicable regulatory frameworks, including MiCA and AML/CFT requirements, where relevant. Users are responsible for ensuring compliance with their local laws and regulations before participating.