Curve DAO Greenlights $60M for Yield Basis, Critics Fear Risky Gamble

Fintech

26 September 2025
|
05:03

Curve Finance has taken a bold step to fund its founder’s latest project, approving a $60 million line of credit in crvUSD stablecoins for the upcoming Yield Basis protocol.

The move is designed to give the new platform a running start — but not without stirring unease among community members.

A Bitcoin Liquidity Experiment

Yield Basis is aiming to crack one of DeFi’s toughest problems: protecting liquidity providers from impermanent loss. To do this, it plans to launch three pools on Ethereum centered on Bitcoin assets such as WBTC, cbBTC, and tBTC. Initially capped at $10 million each, the pools will be powered by an automated market maker that promises more predictable returns.

For Curve, the strategy ties directly back to its stablecoin ambitions. By anchoring Yield Basis in crvUSD, the protocol hopes to drive adoption of its own stablecoin while boosting fee flows to veCRV holders.

Critics Sound Alarm

Not everyone in Curve’s DAO was convinced. Some voters warned that the arrangement left Curve exposed if Yield Basis stumbled. The pseudonymous voice “Small Cap Scientist” argued the credit line lacked sufficient safeguards, pointing out that no independent economic analysis had been conducted and tokenomics remained incomplete. He cautioned that a hack could saddle Curve with losses, describing the deal as “extremely extractive.”

Egorov’s Defense

Founder Michael Egorov countered by pointing to six completed audits and another underway. He emphasized that responsibility for any exploit would fall squarely on Yield Basis, not Curve. To address transparency concerns, Egorov revealed additional details about the project’s investor allocations and highlighted an emergency shutdown mechanism managed by Curve’s Emergency DAO.

Egorov also framed the initiative as part of Curve’s broader strategy of partnering with credible projects and investors, saying such alliances were a strength rather than a liability.

High Stakes for Curve

The decision ultimately passed, setting Yield Basis on track for launch with substantial backing. Yet the episode underscores ongoing tensions within DAOs: balancing founder-led innovation against community oversight. For Curve, the gamble is clear — if Yield Basis delivers on its promise, crvUSD could gain a powerful foothold in Bitcoin liquidity. If not, critics will argue the DAO put too much trust in its creator.

Author

Alexander Zdravkov is a person who always looks for the logic behind things. He is fluent in German and has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.