Yield Basis Secures Overwhelming Vote Approval from Curve DAO Community
Curve DAO has voted to approve a credit line for Yield Basis, the new liquidity protocol from Curve founder Michael Egorov. According to Blockworks, the proposal passed with over 80% voter participation and a wide margin in favor. The decision allows Yield Basis to borrow 60 million crvUSD to seed Bitcoin-stable liquidity pools.
The vote cleared despite debate over potential conflicts of interest. Egorov waited until after quorum was reached to cast his own vote, which represents over 3% of total voting power. CoinTelegraph reported that 97% of votes were cast in support at the time of their coverage.
Major voting blocs including Convex and StakeDAO participated, while a smaller group from Yearn abstained. The proposal enables Yield Basis to launch three Bitcoin pools on Ethereum: WBTC, cbBTC, and tBTC, each initially capped at 10 million dollars in deposits.
Why This Matters
The approval creates new revenue streams for Curve and its ecosystem participants. Yield Basis will return between 35% and 65% of its value to veCRV holders, while allocating an additional 25% for the broader ecosystem. The protocol attributes 7.5% of total Yield Basis token supply to Curve DAO as a technology licensing fee.
The credit line addresses a longstanding challenge in decentralized finance by targeting Bitcoin yield generation. Unchained notes that earning meaningful returns on Bitcoin in DeFi has been limited to roughly 1-2% yields. Yield Basis claims to eliminate impermanent loss through constant leverage rebalancing, potentially unlocking higher yields for Bitcoin holders.
For crvUSD adoption, the proposal creates organic demand without affecting the stablecoin's peg. The borrowed crvUSD remains within liquidity pools rather than being sold on the open market. With crvUSD's current supply around 113 million dollars, the 60 million credit line represents substantial utilization of the protocol's stablecoin capacity.
Industry Implications
The vote represents a shift toward more experimental DeFi governance decisions. Traditional finance institutions typically require extensive due diligence before extending credit lines of this magnitude. The DAO's willingness to approve the facility demonstrates decentralized governance's capacity for rapid innovation, though it also reveals potential risks.
Impermanent loss solutions have become a priority across automated market makers. Yield Basis's approach uses leverage to maintain constant 50/50 exposure in volatile asset pairs. While this eliminates the geometric underperformance characteristic of standard AMMs, it introduces new operational costs including rebalancing trades and borrowing interest.
The broader DeFi sector shows renewed momentum in 2025. Total value locked across protocols has risen to 163.2 billion dollars, up 40.9% since January. Curve maintains 2.4 billion dollars in TVL, though this represents a decline from its January 2022 peak of 24.2 billion dollars. Other major protocols like Aave have expanded into new ecosystems, while projects like Ethena have crossed 500 million dollars in revenue.
The governance concentration evident in Curve's voting structure reflects broader challenges in DAO participation. Most veCRV voting power flows through aggregator protocols rather than individual holders, raising questions about true decentralization in protocol governance decisions.
Further Reading
For those interested in decentralized governance mechanisms and tooling, our comprehensive DAO tooling guide provides detailed analysis of over 100 platforms used in decentralized governance. The guide covers voting systems, proposal management tools, and treasury management solutions employed across the DeFi ecosystem.
