Bitcoin was once seen only as something to hold. It was a store of value, not something that produced income. But that view is starting to shift.
Today, more people are asking a new question, which is can Bitcoin earn passive returns without being sold or converted into altcoins?
Many existing options do offer yield, but often in the form of complex strategies or rewards paid in tokens that fluctuate wildly. Yield Basis offers something clearer. It allows users to earn Bitcoin yield directly, using a structure that prioritises real trading activity and user choice.
What Is Yield Basis?
Yield Basis is a decentralised protocol designed to help users earn returns in Bitcoin. The idea is simple: users deposit wrapped Bitcoin, such as wBTC, into a trading pool where other users buy or sell Bitcoin against stablecoins.
As these trades occur, the platform generates fees. These fees are then shared with the users who supplied the liquidity.
What makes Yield Basis different is its focus on two key areas. First, it addresses the risk of impermanent loss. This is a problem where the value of a user’s tokens in a liquidity pool falls compared to just holding them due to price shifts.
Yield Basis uses a rebalancing mechanism to keep the position closely tracking the value of Bitcoin, helping to reduce this risk.
Second, the platform offers users a real choice in how they are rewarded. Users can either take their share of the fees directly in Bitcoin or choose to receive $YB, the platform’s native token, instead.
This system ensures that every reward is tied to real usage and user decisions. Unlike other platforms that flood the market with reward tokens, Yield Basis only issues $YB when a user voluntarily gives up Bitcoin yield to receive it. This structure supports the long-term sustainability of both the yield and the token economy.
How Does It Work?
The process starts when a user deposits wrapped Bitcoin, such as wBTC, into the Yield Basis platform. This Bitcoin is then paired with borrowed stablecoins to create a balanced trading pool.
Instead of needing users to supply both assets, Yield Basis handles this automatically through a rebalancing mechanism. This pool allows traders to exchange Bitcoin and stablecoins, generating fees that are then shared with the liquidity providers.
One of the key benefits is the system’s protection against impermanent loss. In most platforms, when the price of Bitcoin changes significantly, liquidity providers lose value compared to simply holding their tokens.
Yield Basis addresses this by maintaining a structure where the value of the liquidity position closely follows the market price of Bitcoin.
Once funds are deposited, users are presented with a clear choice for how they want to earn:
- You can receive your share of the trading fees, which are paid out in Bitcoin. This is the straightforward route if you prefer real-time, direct yield.
- You can stake your pool tokens and instead receive $YB tokens. These represent a stake in the protocol, giving long-term exposure to its growth and governance. In choosing this route, you give up your Bitcoin fees for that period, which are redirected to others in the system.
This is not a reward system based on printing new tokens without value. Every $YB token is earned by giving up something of value: your Bitcoin-based fees.
This keeps the incentives fair and grounded in actual economic activity. The structure encourages thoughtful participation, as users weigh the short-term certainty of Bitcoin yield against the longer-term potential of $YB.
The result is a protocol that not only makes it easy to earn from Bitcoin but also gives users flexibility and transparency. You do not need advanced trading knowledge to take part. Instead, you choose how you want to benefit and let the system do the rest.
The YB Token
The $YB token is central to the design of Yield Basis. It provides both governance power and access to revenue from the protocol. Instead of being just another token distributed for free, every $YB has a cost attached to it, paid by the users who decide to forgo their Bitcoin earnings.
Once you receive $YB, you can choose to lock it into a vote-escrow system to gain veYB. This comes with two key benefits:
- Governance rights: You can help decide how the protocol distributes future rewards. If you believe a certain type of wrapped Bitcoin deserves more incentives, your vote can help direct more $YB emissions to those pools.
- Access to revenue: veYB holders receive a portion of the Bitcoin fees that others have given up in order to receive $YB. This creates a passive income stream backed by real protocol activity.
The more $YB you lock, the more voting power and revenue you receive. This encourages long-term participation and supports the overall health of the protocol.
Since emissions of $YB are tied to user decisions, the protocol does not inflate the token supply beyond what is economically sustainable.
The emission model follows a smooth growth curve. As more people stake their liquidity, emissions increase, but at a decreasing rate.
For example, if twice the amount of capital is staked, emissions grow by only about 41%. This keeps inflation under control and rewards active participation without overwhelming the system with excess tokens.
This combination of governance and revenue sharing, backed by a value-protecting emission model, makes $YB a token with actual utility. It is more than a speculative asset. It gives holders the ability to shape the protocol and share in its earnings.
As more people use Yield Basis and more Bitcoin flows through its pools, the value held by veYB participants becomes directly tied to the protocol’s success.
Long-Term Use Cases and Integration
Yield Basis is not designed only for individual users. Its system supports a wide range of potential integrations and user types, from decentralised developers to institutions.
Retail users can benefit immediately. The platform offers a way to earn yield on Bitcoin holdings without needing to sell or convert into volatile assets.
Returns vary with market conditions but can range between 9% and 60%. Users do not need to manage complex strategies. They simply deposit their Bitcoin, choose their reward method, and let the protocol handle the rest.
Professional traders can find value in Yield Basis as a source of deep, on-chain liquidity. The design reduces the risk of impermanent loss, making it more practical for arbitrage and large trades.
The clear structure of fee sharing and capital efficiency also supports passive strategies for firms looking to earn from idle Bitcoin.
For developers and other protocols, Yield Basis offers building blocks for new yield products. Platforms that issue liquid staking tokens can use Yield Basis pools to combine their staking rewards with Bitcoin-based fees. This improves their product offering and expands the earning potential for their users.
Pendle and similar platforms can use Yield Basis as a yield source for fixed-rate products. Because the yield is based on trading fees rather than token inflation, it becomes more reliable.
Traders can create instruments that lock in a fixed yield over time, which helps with planning and hedging.
Even institutional players may find Yield Basis worth exploring. With clear risk models, transparent rewards, and no reliance on speculative emissions, the platform matches many of the requirements for integration into regulated environments.
Financial firms looking for structured exposure to Bitcoin-based income will see in Yield Basis a path forward.
The flexibility of the system makes it valuable across the board. It can serve retail savers, trading desks, DeFi protocols, and traditional financial institutions. All of these users can rely on the same foundation: real yield, fair mechanics, and user choice.
Conclusion
Bitcoin has long been seen as a store of value. But now, with tools like Yield Basis, it can also be a productive asset. The protocol lets users earn Bitcoin without selling it, without relying on unstable altcoins, and without taking on unnecessary complexity.
Yield Basis offers a system where rewards are earned through meaningful choices. Users can take Bitcoin directly or exchange it for a position in the protocol’s future. Every reward has a cost, and every decision shapes how value is shared.
By removing unnecessary risks and simplifying the process, Yield Basis makes yield generation accessible. It is not a promise of future growth based on speculation. It is a system built around real trades, real fees, and real outcomes.