Curve Finance Unveils 'Yield Basis' Revenue Model to Strengthen DeFi Ecosystem

Curve Finance has announced a pioneering proposal known as "Yield Basis," a new revenue distribution model designed to enhance its ecosystem and incentivize protocol participants. This initiative aims to strategically allocate revenue while addressing key industry challenges, solidifying Curve's position within the decentralized finance (DeFi) space.

DAO Votes on $60 Million crvUSD Credit Line

As of October 18, the decentralized autonomous organization (DAO) of Curve Finance is casting votes on a pivotal proposal presented by founder Michael Egorov in August. This proposal seeks to create a $60 million credit line based on Curve’s native overcollateralized stablecoin, crvUSD. Early voting reveals overwhelming approval, with over 97% of participants in favor.

Egorov’s proposal outlines revenue allocation goals under the Yield Basis model. Specifically, holders of vote-escrowed CRV (veCRV)—a staking mechanism rewarding participants with governance power—stand to gain a 35-65% share of the revenue. Another 25% is earmarked for ecosystem support, particularly in operational enhancements and protocol development. The plan also focuses on fostering liquidity pools for key assets, including Wrapped Bitcoin (WBTC), cbBTC, and tBTC.

How Yield Basis Bolsters Curve’s Ecosystem

The Yield Basis model primarily seeks to reinvigorate Curve’s ecosystem by allocating 25% of liquidity provider-based revenue directly to the protocol. This ensures continued operational efficiency and fosters innovation within the platform. According to Egorov, “To enhance Curve’s ecosystem and cover the costs needed to power its crypto pools, 25% of Yield Basis proceeds will be distributed to the Curve ecosystem.”

Furthermore, the model introduces mechanisms to combat impermanent loss—a persistent challenge in liquidity pools. Impermanent loss occurs when investors’ asset values decline compared to simply holding the assets, primarily due to market volatility and liquidity pool rebalancing. To offset this, the proposal integrates simultaneous lending and supply “decay” mechanisms. Egorov explained that this approach enables the expansion of debt linked to the protocol's Total Value Locked (TVL) and its Yield Basis, all while maintaining crvUSD’s stability.

Curve Finance’s Role in the Evolving DeFi Landscape

A longstanding leader in the DeFi sector, Curve Finance currently manages $2.4 billion in TVL, according to data from DeFiLlama. Despite this strong position, the figure represents a significant drop from the protocol's peak of $24.2 billion in January 2022. Curve has faced a variety of challenges over the years, including DNS attacks and counterfeit app scams.

While Curve works to address internal hurdles, the DeFi industry as a whole is rebounding from a period of stagnation that spanned from mid-2022 through much of 2023. Recent data shows that DeFi’s cumulative TVL surged from $115.8 billion at the start of 2025 to $163.2 billion by September of the same year, marking a remarkable 40.9% growth in just nine months.

Major players in the space are also adapting to meet evolving demands. Protocols like Aave have expanded beyond their core offerings, launching new blockchain ecosystems and updated versions of their platforms. Similarly, Ethena, another notable name in DeFi, has seen impressive traction by crossing $500 million in revenue by August 2025, primarily through its stablecoin-focused offerings. These milestones follow regulatory shifts such as the U.S. GENIUS Act, a legislative move designed to promote financial innovation within decentralized systems.

Conclusion

Curve Finance’s Yield Basis model represents a calculated step forward, aiming to redefine revenue allocation, address impermanent loss, and boost ecosystem resilience. By championing innovation and community-driven governance, Curve solidifies its commitment to navigating the dynamic DeFi environment. As the sector continues to recover and evolve, Curve is positioning itself to remain a key player, leveraging strategic initiatives to support both protocol participants and its broader ecosystem.

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