@yieldbasis is one of the most exciting innovations in DeFi. By applying 2× compounding leverage to Curve Cryptoswap LP positions, the protocol aims to eliminate impermanent loss and deliver BTC-denominated yields that have historically simulated at around 20% APR over a six-year backtest period. The mechanism is elegant: the leveraged LP position's price tracks the underlying crypto asset rather than the square-root drag of a standard AMM position, all while continuing to earn trading fees.

But ybBTC — the token representing a leveraged Yield Basis position — carries a subtle risk that most users don't fully appreciate until they try to exit: Temporary Redemption Discount (TRD).

This post explains what TRD is, why it exists, and how the Bitcoin Dollar's flagship BTCD is uniquely designed to harvest ybBTC yield while actively hedging TRD at the portfolio level. The goal is to allow end users, particularly those in our forthcoming USD and BTC Vaults, to never have to worry about TRD.

Bitcoin Dollar is not competitive with Yield Basis. We are complementary. Our goal is to become the largest ybBTC holder in the market — channeling Yield Basis's yield engine to our users through a system that offers both USD and BTC exposure with yield while hedging the TRD risks individual holders would otherwise face. It's also worth noting that our protocol operates under similar trust assumptions to Ethena (managed portfolio, custodied assets), while Yield Basis itself is a more trustless, on-chain primitive. We see this as a feature not a tension — we bring distribution and risk management, Yield Basis brings the yield.

What Is TRD?

Most ybBTC holders think of TRD as a temporary inconvenience — a small fee you pay if you exit at the wrong time. That framing is dangerously incomplete. TRD is unbounded, potentially long-lived, and driven by the same price volatility that makes ybBTC yield attractive in the first place. Understanding it isn't optional — it's the difference between yield and the illusion of yield.

Yield Basis works by leveraging the concentrated liquidity inside a Curve Cryptoswap pool. The Cryptopool holds two assets — wrapped BTC on one side, crvUSD on the other, maintaining an approximately equal balance as it earns fees from swaps. The Yield Basis protocol then holds LP tokens in this Cryptopool as assets against crvUSD debt, maintaining continuous 2x leverage, or a loan-to-value ratio of approximately 50%.

When the Cryptopool remains balanced, the crvUSD debt held by Yield Basis cancels out the crvUSD balance of the Cryptopool backing the LP tokens, leaving ybBTC holders with pure BTC exposure plus yield. However, if the Cryptopool becomes imbalanced, this cancellation fails and the crvUSD component of the LP token does not balance the crvUSD debt held by the Yield Basis protocol. This creates an additional friction when unwinding the leveraged position, which end users feel as TRD.

How Does the Cryptopool Become Imbalanced?

Before we discuss TRD in detail, we must first explain how concentrated liquidity works in Curve Cryptoswap and how the Yield Basis Cryptopool can become imbalanced.

Basics of Concentrated Liquidity

Curve Cryptoswap concentrates the liquidity of the Cryptopool in a particular parametrized distribution around a price point called the price_scale. But the intuition for how price_scale updates is the same as the intuition for how any concentrated pool or liquidity provider rebalances their liquidity.

The relationship between the liquidity distribution and the current market price determines the relative balance of assets held by the pool. If the market price is close to the center of liquidity, the pool's assets will be approximately balanced. If the market price is much higher than the center of liquidity, the pool's assets will be balanced heavily on crvUSD and light on BTC. In the reverse scenario, if the market price is much lower than the center of liquidity, the pool's assets will be balanced heavily on BTC and light on crvUSD.

Obviously, the optimal operating condition is when the center of liquidity is close to the current market price. In this case the pool's assets are balanced, liquidity is highly concentrated, slippage is minimized, and the pool generates maximal fee revenue. However, the concentration comes at a price —changing the center of liquidity requires the assets in the pool to rebalance, incurring losses. If the center of liquidity updates too frequently, the pool will lose money on rebalancing costs more rapidly than it earns from swap fees. But if the center of liquidity does not update frequently enough, the pool's liquidity concentration will lag the market price and the pool loses efficiency.

Curve Cryptoswap

The Curve Cryptoswap algorithm attempts to solve this problem by only updating the center of liquidity (price_scale) when the pool has earned enough fees to offset the cost of the rebalance. But this still leaves the pool vulnerable: if the market price moves too fast, the pool will not earn enough fees to keep price_scale aligned to the market price. Thus, a gap opens between where the market is and where the pool thinks the market is —i.e., the pool's assets become imbalanced.

When this happens it triggers a positive feedback loop: the pool is forced to operate in a highly inefficient regime until it accumulates enough fee income to rebalance price_scale, but the inefficiency of being highly imbalanced reduces the fee income of the pool. And if the market continues moving in the same direction, it also exacerbates the problem. Thus, although the pool may eventually rebalance, once the elastic is broken, it could take weeks, months, or even longer for this rebalance to occur.

This is the core fragility: the pool doesn't fail spectacularly — it degrades quietly, earning less while needing more, with no mechanism to force a reset.

It is worth pausing to emphasize that the imbalance in the pool's assets is strictly a function of the pool's constant concentration parameter(s), the price_scale, and the current marginal price of the pool (which is kept tightly pegged to the external market price by arbitrageurs). When the pool is able to constantly update price_scale, the pool remains approximately balanced regardless of the current market price.

But when the Cryptopool gets "stuck" due to the aforementioned positive feedback loop, an interesting phenomenon happens: the pool isn't able to rebalance, so price_scale remains constant, and therefore the imbalance in the pool becomes a function of only the marginal price. This behavior is essential to the hedging strategy that we introduce later.

Figure 1: Balance of the assets in the Cryptopool as a function of the marginal price of the pool and price_scale. The balance is calculated using the deployed pool's concentration math, which relies on a single parameter, A=4.5. When price_scale is close to the marginal price of the pool, the pool remains balanced, but when price_scale is held constant, the imbalance scales non-linearly with BTC price.

The Cause of TRD

As we have hinted above, TRD in the Yield Basis protocol is a direct consequence of an imbalance in the underlying Cryptopool. When we say "TRD" what we mean is simply the difference between the actual redemption price in BTC of ybBTC (redemptionPPS) and the redemption price in BTC of ybBTC that would be available if the pool were balanced (fundamentalPPS):

TRD = 1 - (redemptionPPS / fundamentalPPS)

When TRD is positive, it means the redeemable value of ybBTC for BTC is temporarily below its "fair" value. A user trying to exit their Yield Basis position during a period of pool imbalance will receive less than if they were withdrawing from balanced pools — they eat a redemption discount.

To see how this redemption discount arises, consider the redemption flow executed by the Yield Basis protocol. In order to redeem ybBTC tokens, the protocol must unwind its 2x leveraged LP tokens against its borrowed crvUSD. It does this by redeeming the LP tokens in the Cryptopool for an equal amount of crvUSD and BTC, using the crvUSD to repay its debt, and sending the remaining BTC to the ybBTC redeemer. The redemption of the LP tokens is the critical step —and this redemption must be balanced in order to repay the protocol's crvUSD debt and maintain the correct loan-to-value ratio of 50%. When the pool is balanced, this LP redemption is therefore highly efficient. But when the Cryptopool is imbalanced in either direction, there is a fee to redeem the LP token for balanced assets. From the Cryptopool's perspective, this fee is necessary because withdrawing balanced assets will always increase the imbalance in the pool —something the Cryptopool wants to disincentivize. But this fee is undesirable from the perspective of the Yield Basis protocol and is indeed precisely the TRD that the ybBTC holder experiences.

Figure 2: The temporary redemption discount (TRD) of ybBTC as a function of both the balance of assets in the underlying Cryptopool and the loan-to-value ratio (LTV) of the Yield Basis releveraging pool.

As seen in Figure 2, TRD increases with the absolute size of the imbalance in the cryptopool. That is, when the pool is imbalanced with 60% BTC, TRD will be lower than when the pool is imbalanced with 70% BTC. Furthermore, TRD is unbounded —TRD approaches 100% as the Cryptopool approaches an upside imbalance of 100% crvUSD / 0% BTC. And TRD actually reaches 100% if the Cryptopool reaches a downside imbalance of approximately 7% crvUSD / 93% BTC.

Variable Leverage

There is one slight complication to the story illustrated above: TRD is not just a function of the (absolute) imbalance in the Cryptopool, but also of the loan-to-value (LTV) ratio of the Yield Basis leveraged LP position. This is because the LTV determines the ratio of assets that the Yield Basis protocol must receive from the redemption of LP tokens during withdrawal. If LTV is 51%, the fraction of the total redeemed LP value that must be redeemed in crvUSD in order to keep LTV unchanged after redemption is also 51%. This means that if the Cryptopool is in turn balanced with 51% crvUSD, the LP redemption will be maximally efficient. So in the previous section, when we say that TRD is caused by an "imbalance" in the Cryptopool, we don't strictly speaking mean an absolute imbalance measured from 50%, but a relative imbalance compared to the LTV of the Yield Basis leveraged LP position. Of course, the Yield Basis protocol tries to maintain LTV of 50% to ensure 2x leverage, so this difference is negligible in theory —but in practice, LTV can vary somewhat.

The leverage of the Yield Basis LP position is maintained through a special AMM that is itself sensitive to the BTC market price. This means that the LTV does vary from 50%, and this difference is correlated with BTC price. When BTC price falls, the value of the crvUSD remains constant while the value of the LP assets decrease, causing the LTV to increase. On the flip side, when BTC price surges, LTV decreases. Note that this behavior actually compounds the mismatch between LTV and the balance of crvUSD in the Cryptopool. In the Cryptopool, holding price_scale constant, the relative balance of crvUSD decreases when BTC price falls and increases when BTC price rises.

But unlike the Cryptopool imbalance, the LTV is strongly bounded by arbitrage trading. When LTV differs from 50%, the (virtual) releveraging pool offers an increasingly profitable price for arbitrageur to swap crvUSD and BTC, moving LTV back towards 50%. The result is that LTV is efficiently bounded by arbitrageurs in a range around 50% —the exact width of the bound is determined by the fee of the virtual releveraging pool. Currently, the fee in the virtual releveraging pool can vary up to 5%. Assuming that this is the dominant friction for arbitrageurs, this effectively bounds LTV within $\pm 1\%$ or so of 50%.

Figure 3: The marginal price of the Yield Basis virtual releveraging pool as a function of the LTV. The marginal price is shown normalized to the price of the Cryptopool (market price of BTC). This negative slope of the plot demonstrates the self-stabilizing behavior of the releveraging pool: arbitrageurs are always incentivized to trade in the direction that restores the LTV of the pool to 50%. The shaded region corresponds to the arbitrage bounds determined by the maximal 5% fee of the pool. If price is arbitraged within the shaded region, LTV is bounded within $\pm 1\%$ of the target 50%.

Because the LTV of the Yield Basis position is bounded by arbitrage, its effect on TRD is bounded as well. In this work, we use LTV to calculate the correct redemption price, but we ignore its contribution to the derivative of the redemption price (in the next section). Of course, it is still theoretically possible to include this contribution to the calculation, but accounting for the arbitrage boundaries adds additional complexity that we have omitted for simplicity.

Hedging TRD

Now that we understand TRD in Yield Basis, the problem that it presents is obvious. Yield Basis holders want pure BTC exposure with yield, so they expect that the redemption price of ybBTC in BTC should be constant or increasing. But the redemption price is exposed to rapid BTC price movements that could imbalance the pool and create TRD. This TRD is unbounded in both price and time —that is, TRD can increase up to 100%, and there is no guarantee that TRD will go to zero in any finite period of time.

But the solution to this problem is almost equally obvious. Simply put: ybBTC is not pure BTC exposure. Any liquid portfolio must value its assets at the price at which they can be instantaneously redeemed. Thus, the redemption price of ybBTC —including the TRD —is the value of ybBTC, and it is manifestly not one-to-one with BTC. Crucially, the scaling of the redemption price is not a random or ad hoc penalty function —it is driven primarily by the price_scale of the Cryptopool, other parameters of the Yield Basis protocol, and the BTC market price.

Moreover, because TRD is dominated by the pool imbalance, we expect that any change to price_scale will decrease TRD (and hence increase the redemption value of ybBTC), while any variation in the other protocol parameters should on average be increasing redemption value as the protocol generates yield. This suggests that it may be possible to hedge the excess exposure to BTC/USD price.

We now present a simple hedging strategy. We have argued that the redemption value of ybBTC in BTC tokens, $p_{yb}$, is well-modeled as a function of BTC market price $P$ and time $t$, with the time dependence arising through the variance in price_scale and other protocol parameters such that $\frac{\partial p_{yb}}{\partial t} \geq 0$ to good approximation. That is, the only drawdowns in $p_{yb}$ arise due to TRD when BTC the market price changes but price_scale does not.

Now consider a portfolio that holds $y$ ybBTC tokens, $b$ tokens of pure BTC exposure, and $c$ dollars of USD-stablecoins. Writing the actual redemption price of ybBTC in USD —including TRD —as $P_{yb}=p_{yb}P$, the value of this portfolio in USD is therefore

$$V = c + bP + yP_{yb}$$

and the fraction of value in each asset is given by: $f_{usd}=c/V$, $f_{btc} = bP/V$, and $f_{yb} = yP_{yb}/V$.

The change in the portfolio under an infinitesimal time evolution $dt$ where BTC price changes by $dP$ is given to first order by

$$dV = \frac{\partial V}{\partial t}dt + \omega_V \frac{V}{P}dP$$

As we have already argued, we expect the $dt$ term to contribute positively to $dV$ and we do not consider it further, i.e. we assume $\frac{\partial V}{\partial t} \geq 0$ is pure yield.

To hedge a portfolio, you need to know what you're exposed to. Not notionally — actually. A dollar of ybBTC is not a dollar of BTC exposure when the Curve pool is imbalanced. It could be 80 cents of exposure, or 60, or two dollars, depending on the pool state and the direction of the imbalance. The quantity that captures this — the true effective BTC sensitivity of any asset or portfolio — is what we call omega ($\omega$), the price elasticity:

$$\omega_V = \frac{\partial \log V}{\partial \log P}$$

The elasticity is precisely the "bitcoinness" of the portfolio: if BTC changes by some fraction $dP/P$ then the corresponding fractional change in the portfolio is given by $dV/V = \omega_V (dP/P)$. Thus, a portfolio with pure BTC exposure has $\omega=1$ and a portfolio with zero BTC exposure has $\omega=0$. As another example, a continuous 50/50 BTC exposure, such as the BTCD peg (considered later), which has $\omega=0.5$.

The elasticity also has the useful property that the total elasticity of the portfolio is the weighted average of the elasticity of each asset in the portfolio:

$$\omega_V = \sum_i f_i \omega_i$$

where the sum runs over $i = usd,\ btc,\ yb$, and we define the elasticity of each asset: $\omega_{usd} = 0$, $\omega_{btc}=1$, and $\omega_{yb}$ is given by:

$$\omega_{yb} = \frac{\partial \log P_{yb}}{\partial \log P} = \frac{P}{P_{yb}}\frac{\partial P_{yb}}{\partial P}$$

It is worth pausing to emphasize that $\omega_{yb}$ is actually calculable using look-through accounting. At any given time, the redemption price of ybBTC $P_{yb}$ can be calculated from the BTC market price $P$ and the state of the Yield Basis pools (which includes the LTV of the releveraging pool and current balances of the Cryptopool).

To compute the derivative, we consider a small fictitious price change $P \to P'=P+\Delta P$ and compute what the balances of the Cryptopool would be if the marginal price of the pool were to change from $P$ to $P'$. Then we re-compute the redemption price of ybBTC $P_{yb}'$ using these fictitious balances but holding the rest of the Yield Basis state parameters constant. Then we have

$$\omega_{yb} = \frac{\log P_{yb}'/P_{yb}}{\log P'/P}$$

Figure 4: Computed elasticity of ybBTC ($\omega_{yb}$) as a function of the balance of the assets in the Cryptopool and the LTV of the Yield Basis releveraging pool. The elasticity increases rapidly as the relative USD balance of the Cryptopol decreases below 20%. Notably, there is a large discontinuity when TRD hits 100%, below which $\omega_{yb}=0$. This discontinuity creates some appreciable tail risk, but it can be mitigated as the pool approaches the discontinuity smoothly, and we do not consider it further. There is also a small discontinuity near the equilibrium point (50% balance) that is well within tolerance of a typical $\omega$-hedging strategy and can be ignored.

In principle, we can now proceed with standard continuous delta-hedging practices. We choose a target BTC exposure, which determines the target elasticity. At periodic intervals, we interrogate $P$, $P_{yb}$, and $\omega_{yb}$, and using $c$, $b$, and $y$, we compute $V$ and $\omega_V$. If $\omega_V$ deviates from our target by some tolerance, we rebalance the portfolio: if $\omega_V$ is too large, we sell BTC exposure and if $\omega_V$ is too small, we buy BTC exposure.

However, we note a crucial limitation of this simple hedged portfolio: it still cannot guarantee 100% BTC exposure while holding ybBTC, so true BTC exposure with meaningful yield remains elusive. Mathematically, this can be seen in the fact that $\omega_V$ is a weighted average of $\omega_{usd}=0$, $\omega_{btc}=1$, and $\omega_{yb}$.

But we know that $\omega_{yb}<1$ if the pool is imbalanced heavily on the USD side.

And when $\omega_{yb}<1$, the only way to obtain $\omega_V=1$ is to have $f_{usd}=f_{yb}=0$ and $f_{btc}=1$ —the portfolio must sell its ybBTC and hold 100% BTC.

Intuitively, this arises from the fact that when the Cryptopool is weighted towards USD, ybBTC has reduced BTC exposure, and the portfolio has no other asset that can offset this with increased BTC exposure. The solution, of course, is additional leverage. One such solution could be to hold leveraged BTC exposure, such as long perpetual futures, directly in the portfolio. However, in the next section, we show that the BTCD ecosystem offers a compelling solution by hedging the portfolio to 50% exposure portfolio and then leveraging the entire portfolio.

The Bitcoin Dollar (BTCD) Ecosystem

The core primitive of the Bitcoin Dollar Ecosystem is the BTCD token. BTCD is pegged to a continuous 50/50 BTC/USD exposure. As we have discussed above, this means that the BTCD peg price, $P_{btcd}$, has constant elasticity

$$\omega_{btcd} = \frac{\partial \log P_{btcd}}{\partial P} = 0.5$$

The BTCD token itself does not earn yield, but yield from the BTCD portfolio, which holds the collateral backing BTCD tokens, is paid through a liquid staking token, sBTCD.

The BTCD Portfolio

The BTCD portfolio's central objective is to maximize the collateral ratio, $R$ — the ratio of portfolio value V to the peg:

$$R \propto \frac{V}{P_{btcd}}$$

When $R>1$, the portfolio is overcollateralized, and the excess collateral eventually gets printed out as yield to sBTCD holders.

The portfolio is hedged such that $R$ is insensitive to BTCD price movements:

$$0 = \frac{\partial \log R}{\partial \log P} = \omega_V - \omega_{btcd}$$

Here again, we take advantage of convenient properties of the log-derivatives to express the hedging condition compactly in terms of elasticity. Unsurprisingly, given the intuition we established in the previous section, the BTCD portfolio must be $\omega$-hedged to $\omega_V = 0.5$, or 50% BTC exposure.

The BTCD portfolio and hedging strategy is essentially an implementation of the simple framework introduced in the previous section. The portfolio holds some USD-exposure yield-bearing assets, plus some BTC-exposure yield bearing assets, plus ybBTC tokens, plus (possibly) other mixed-exposure assets.

Because the target exposure of the portfolio is 50%, the portfolio can easily accommodate any value of $\omega_{yb}$, earning yield from ybBTC while maintaining the correct hedge. Ignoring other mixed-exposure assets and short BTC exposure, the maximum amount of ybBTC that the BTCD portfolio can hold is when the portfolio holds no BTC and is given by

$$f_{yb,\ max} = \frac{0.5}{\omega_{yb}}$$

For example, when TRD is ~20%, $\omega_{yb}\sim 2$, so the portfolio can hold up to 25% of its value in ybBTC. Of course, this is not a hard cap and could be made higher by compensating with additional short exposure to BTC (e.g. perpetual futures) elsewhere in the portfolio.

Additionally, in practice it is beneficial to hold slightly less ybBTC than maximal so that there is a revolving balance of BTC in the portfolio —this enables the portfolio to rebalance through BTC/USD without having to redeem ybBTC. Note that the portfolio does not need to avoid redeeming ybBTC because of TRD —the TRD is already priced into the portfolio. However, because of the capacity limits on the ybBTC vaults, it is often difficult to buy into ybBTC and therefore advantageous to avoid redeeming ybBTC.

With this hedging strategy in place, the yield on the portfolio, as measured through the collateral ratio, $R$ is given schematically by

$$d\log R \sim \sum_i f_i r_i dt -\ \mathrm{rebalancing\ costs}$$

where the index $i$ runs over all assets in the portfolio, $f_i$ is the fraction of total portfolio value in each asset, and $r_i$ is the rate of return of each asset.

Figure 5: Results from backtesting this $\omega$-hedging strategy on hourly ticks in a mock BTCD portfolio from January 1 to March 20, 2026. Importantly, this period of time encompasses the market downturn in early February 2026 that imbalanced the Yield Basis Cryptopools. That imbalance created TRD that has persisted to present day (late March 2026), as can be clearly seen in the first plot. The second plot shows the computed elasticity for ybBTC over time. The third plot shows the predictive power of our model for ybBTC price by plotting the cumulative yield of the actual ybBTC redemption price measured against the predicted change in ybBTC redemption price using the corresponding elasticity model. Our elasticity model clearly outperforms the naive $\omega=1$ model with significantly higher yield and fewer drawdowns. The fourth plot shows the collateral ratio of two BTCD-like portfolios implementing $\omega$-hedging over the duration of the backtest. The portfolio holding 30% of its initial value in ybBTC earned significantly higher yield with minimal additional risk (note only transient drawdowns). The $\omega_V$ tolerance was set at 1% and all rebalancing swaps were done between BTC/USD with 0.3% friction per swap.

The BTCD Vaults: Pure Yield for BTC and USD

The hedging strategy described above all happens inside the BTCD Portfolio. And the yield generated in the portfolio is passed through to the sBTCD token. But we know that most users don't want to hold sBTCD with 50% exposure to BTC —they either want 0% (pure USD) or 100% (pure BTC) exposure. The BTCD Vaults provide exactly this solution by continuously leveraging sBTCD assets against BTC or USD debt. This is exactly analogous to the way Yield Basis leverages Cryptopool LP token assets against USD debt to obtain BTC-like exposure, but with two important differences:

1. BTCD Vaults come in two different flavors: a BTC Vault that earns BTC exposure by borrowing USD against the sBTCD assets; and a USD Vault that earns USD exposure by borrowing BTC against the sBTCD assets.
2. Yield without TRD: unlike the Cryptopools that are the foundation of Yield Basis, the (s)BTCD token is pegged to 50% exposure —it fundamentally cannot imbalance. All TRD (and other) risk is absorbed by the BTCD Portfolio which holds ybBTC (and other yield-bearing assets) and ensures stability with the $\omega$-hedging described above. The yield from ybBTC flows up through sBTCD into the vault — but the transient redemption risk does not.

Here's a quick sketch of how the vaults work:

• The vault converts deposited USD or BTC into sBTCD — the yield-bearing staked version of BTCD.
• It deposits sBTCD as collateral into Morpho and borrows the opposite asset it wants exposure to (the USD Vault borrows BTC; the BTC Vault borrows USD).
• The borrowed asset is converted into more sBTCD, which is deposited as additional collateral.
• The final position is approximately 2x sBTCD exposure against 1x USD or BTC debt, at a target 50% loan-to-value ratio.
• The leverage is maintained continuously by selling sBTCD to repay debt when LTV is too high and taking more debt to swap into sBTCD when the LTV is too low.

The net result is pure USD or BTC exposure with amplified sBTCD yield, minus the cost of borrowing and friction to maintain the continuous leverage.

Summary

Yield Basis produces compelling BTC-denominated yield through leveraged Curve LP positions. But ybBTC carries TRD risk — a continuous redemption discount that materializes when the underlying Curve pool is imbalanced by sharp price moves. The BTCD Portfolio captures ybBTC yield while hedging TRD through a layered system:

• Look-through accounting: marking ybBTC to its live elasticity $\omega_Y$ derived from the actual Curve pool state, not its nominal exposure, ensuring the portfolio always knows its true effective BTC exposure
• Omega hedging: using USD ↔ BTC swaps in the liquid portfolio to keep $\omega_V = 0.5$, with tolerance bands optimized against rebalancing friction
• Structural patience: holding ybBTC through periods of elevated TRD, knowing that price_scale updates are always favorable shocks and that the liquid portfolio absorbs the exposure drift in the interim

For end users, the USD Vault and BTC Vault package this entire system into simple products: deposit USD or BTC, earn yield in the currency you deposited, and maintain the exposure you want. Both vaults hold leveraged sBTCD positions, and the sBTCD yield is powered in part by ybBTC — meaning both vaults are downstream beneficiaries of Yield Basis's yield engine. But neither vault's depositors ever hold ybBTC directly. The TRD risk that would confront a direct ybBTC holder is absorbed and hedged at the portfolio level — invisible to vault depositors, and converted from a liability into a feature of the system's design.

Bitcoin Dollar doesn't ask users to understand Curve pool mechanics, monitor price_scale drift, or time their exits around TRD windows. That complexity lives inside the portfolio — managed, hedged, and optimized continuously — so that vault depositors receive what DeFi has long promised but rarely delivered: real yield on BTC and USD, in the currency you choose, without hidden redemption risk. Yield Basis built the engine. Bitcoin Dollar built the chassis. Deposit into the BTC Vault or USD Vault and let the system do what it was designed to do.

The BTC Vault and USD Vault are coming soon. Visit btcd.fi to learn more, explore the docs, and get early access. Follow us on @BTCD_Official to stay up to date on launch timelines, portfolio updates, and new integrations.

*This post is for informational and educational purposes only and does not constitute investment advice, a solicitation, or a recommendation to buy, sell, or hold any digital asset. DeFi protocols carry risks including but not limited to smart contract vulnerabilities, liquidation risk, peg instability, and loss of funds. Past simulated performance is not indicative of future results. Do your own research and consult a qualified advisor before making any investment decisions.