Question 1

What is YB?

Accepted Answer

YB is YieldBasis's ERC-20 governance and incentive token issued on Ethereum. It is not the yb-LP share received by depositing assets into a liquidity pool; YB's central role is to be locked into veYB for governance, directing emissions, and participating in protocol revenue distributions.

Question 2

What does locking YB do?

Accepted Answer

Holders must lock YB to create veYB before they can exercise the corresponding governance and revenue-distribution rights. The voting power of an individual veYB position is determined by both the amount locked and the lock duration: locking more and for longer gives greater voting influence. veYB holders can influence protocol decisions and the direction of future YB emission allocations. For example, voting can affect which liquidity pools receive more incentives; the cost of locking is that the associated YB cannot be freely transferred during the lock period.

Question 3

Does holding YB allow participation in protocol revenue distributions?

Accepted Answer

Simply holding unlocked YB does not equal participation in protocol revenue distributions. To obtain that right, a holder must lock YB to create veYB; that position's distribution share equals its proportion of all veYB. The materials describe the revenue source as the dynamic management-fee portion of trading fees from the underlying BTC/crvUSD pool. That management fee adjusts between 10% and 100% with ybBTC staking participation, and veYB holders share this portion of protocol revenue rather than automatically receiving all trading fees or a fixed amount.

Question 4

How are YB's supply and allocations broadly structured?

Accepted Answer

YB has a fully diluted total supply of 1 billion tokens. The public sale accounts for 2.5% and was fully unlocked at sale; incentives account for 30%, investors 12%, the team 25%, protocol development 7.5%, the ecosystem 12.5%, Curve authorization 7.5%, and initial liquidity and early incentives 3%. Different categories enter circulation through different paths: investors and the team each have a 6-month cliff followed by 24 months of linear vesting; protocol development has a 1-year cliff followed by 12 months of vesting; the ecosystem vests over two years with 5% initially unlocked; and Curve authorization is allocated by a smart contract using a dynamic emissions function. Total supply is not the amount already circulating or available for sale at a given time.

Question 5

What is the difference between YB and YieldBasis liquidity shares?

Accepted Answer

yb-LP is the share users receive after supplying assets to YieldBasis liquidity markets, whereas YB is a separate governance and incentive token. YieldBasis is designed to maintain a 2x leveraged position in a volatile-asset trading pair so that yb-LP retains one-to-one, two-way price exposure to an asset such as BTC or ETH while attempting to retain trading-fee income. The return path for yb-LP also depends on whether it is staked: trading fees for unstaked yb-LP are reflected in growth of its base value; staked yb-LP gives up direct trading fees denominated in the underlying asset and instead receives YB emissions from a gauge. Holding YB, holding unstaked yb-LP, and staking yb-LP are therefore three different economic positions.

Question 6

What risks should be considered when using or holding YB?

Accepted Answer

YB holders face token-price, liquidity, governance-outcome, and Ethereum-infrastructure risks. Obtaining veYB rights also requires giving up the ability to freely transfer YB during the lock period; the revenue-distribution share changes with total veYB and the dynamic management fee rather than being a fixed return. YieldBasis-related mechanisms also introduce protocol-level risk: providing liquidity relies on borrowing to create 2x leverage and on automatic adjustment, and deviations in leverage calculations or liquidity balancing may reduce expected returns. yb-LP price exposure, YB token price, and veYB rights should be assessed separately, rather than treated as the same risk simply because they belong to one protocol.

Question 7

What is the relationship between YB emissions and veYB voting?

Accepted Answer

YB emissions are an incentive mechanism for staked yb-LP: when users stake their ybBTC receipt tokens, they give up directly receiving BTC-denominated trading fees and instead receive YB emissions that vary with participation. veYB holders influence where future emissions go through voting, so governance affects how incentives are allocated across markets without guaranteeing returns for any individual market.

Question 8

How does YieldBasis's 2x leverage relate to holding YB?

Accepted Answer

YieldBasis's 2x leverage is a structure the protocol establishes for liquidity positions; it does not automatically give YB holders double price exposure. Its purpose is to let yb-LP track the underlying volatile asset one-to-one while earning trading fees; implementation depends on borrowing, releveraging, and liquidity balancing, which also create corresponding protocol-execution risks.

Question 9

What is the difference between fully diluted supply and circulating supply?

Accepted Answer

“1 billion fully diluted” is a measure that counts the entire supply at its stated amount; “circulating supply” depends on which categories have unlocked, vested, or entered the market through emissions. For example, the team, investor, and ecosystem categories have different cliff, linear-vesting, or initial-unlock arrangements, so fully diluted supply cannot be used as a substitute for the amount currently tradable.

Question 10

Which stages determine veYB revenue distributions?

Accepted Answer

The basis for protocol revenue distribution is not a promise of arbitrary revenue, but the dynamic management-fee portion of trading fees in the underlying BTC/crvUSD pool described in the materials. Trading activity affects how trading fees arise, ybBTC staking participation affects the management-fee rate, and a veYB position's share of all veYB then determines its relative distribution share.

Question 11

Why does Ethereum network status affect the use of YB?

Accepted Answer

YB operates as an ERC-20 token on Ethereum, and transfers and interactions depend on the Ethereum network and compatible wallets and infrastructure. Ethereum congestion, gas costs, and network or smart-contract risks can therefore affect operations involving YB or related protocol contracts; these infrastructure risks are distinct from YieldBasis's own governance or liquidity risks.

Question 12

Are YB governance rights fixed permanently?

Accepted Answer

YB governance and revenue-distribution rights arise from users voluntarily locking tokens to create veYB, rather than being automatically granted by the issuer to all token holders. The protocol materials also state that YB rights and obligations may be modified through governance votes involving veYB holders; unlocked YB, veYB, and yb-LP must therefore not be conflated in their rights and restrictions.

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