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Yield Basis Activates Fee Switch

In a significant advancement for the decentralized finance (DeFi) space, Yield Basis, a prominent Bitcoin-focused liquidity protocol established by Michael Egorov, has successfully activated its much-anticipated Fee Switch. This pivotal moment paves the way for the distribution of substantial fees—totaling 17.55 BTC (approximately $1.62 million)—to veYB token holders. This critical maneuver not only marks a milestone for Yield Basis but also represents an evolution in how protocol fees are utilized within the DeFi ecosystem.

What is the Fee Switch?

The Fee Switch acts as a catalyst for distributing captured protocol fees to holders of veYB, which is a vote-escrowed version of the Yield Basis token ($YB). The activation occurred on December 4, 2025, and the distribution of fees is set to happen in the coming weeks, creating an economic incentive for holders to engage with the protocol.

Prior to this upgrade, all admin fees generated from liquidity pools were stored in a DAO contract, rendering them inaccessible to the Yield Basis community. With this system now redirected through a new distributor contract, holders of veYB will be eligible to claim their share of the accrued fees based on their governance weight in each epoch. This distributed approach aims to enhance participant engagement and governance within the Yield Basis community.

Fee Distribution Details

The accumulated fees of 17.55 BTC will be divided among the existing veYB holders over the next four weeks, involving around 31 million veYB tokens, translating to $14.3 million in value locked. This structure places Yield Basis as a leader in the revenue-generating protocols within the DeFi landscape, providing tangible rewards to governance participants.

Importantly, Yield Basis will continue generating fees through ongoing trading activities in its liquidity pools. Thus, future fees will follow a similar distribution timeline aligned with governance rewards, effectively creating a closed revenue loop for the ecosystem.

This development not only fosters a sense of ownership and reward among veYB holders but also reinforces their role within the protocol’s governance structure. They will not only wield voting power but also gain real economic benefits tied to their participation.

Strengthening Ties with Curve Finance

The implementation of the Fee Switch also strengthens the collaboration between Yield Basis and Curve Finance, a foundational layer for numerous DeFi protocols. With the Fee Switch operational, Curve DAO voters are incentivized to earn YB tokens, which can be locked into veYB for yield generation. This presents a compelling reason for Curve voters to continue supporting crvUSD stable pools, which play a vital role in boosting yield for Yield Basis pools.

This synergy is likely to increase liquidity depth and operational stability for crvUSD while aligning incentives across both protocols, ultimately benefiting the broader DeFi landscape.

Conclusion

Yield Basis stands at the forefront of DeFi innovation, resolving long-standing challenges such as impermanent loss while fostering a deeper engagement from its community through meaningful economic rewards. The activation of the Fee Switch not only signifies a new chapter for Yield Basis but also sets a precedent for future protocols aiming to implement robust economic models that benefit both users and governance participants. This progressive step ensures that the Yield Basis ecosystem will continue to thrive, maintain stability, and attract further interest in the DeFi sector.