New Bitcoin-focused pools aim to expand Curve’s ecosystem amid risk concerns
Curve DAO has approved a $60 million credit line in crvUSD for Yield Basis, a new protocol developed by Curve founder Michael Egorov, setting the stage for its upcoming mainnet launch.
Boosting Bitcoin liquidity and Curve ecosystem
The initiative will support three liquidity pools on Ethereum — WBTC, cbBTC and tBTC — designed to tackle the challenge of impermanent loss while creating new yield opportunities in Bitcoin-based DeFi markets. According to Curve Finance, each pool will initially be capped at $10 million.
By embedding crvUSD deeper into DeFi infrastructure, the proposal is expected to expand Curve’s ecosystem and increase potential fee flows to holders of veCRV, the governance-locked version of Curve’s native token.
“This move not only strengthens Curve’s stablecoin utility but also opens doors for sustainable Bitcoin yield strategies in DeFi,” a governance forum discussion noted.
Community raises red flags
Despite majority support, not all community members backed the proposal. On Sept. 18, a DAO participant known as Small Cap Scientist called the plan “extremely extractive” and flagged several concerns.
The critic warned that no independent economic risk review had been conducted and argued that a hack or exploit of Yield Basis could leave Curve responsible for significant losses. He also pointed to incomplete tokenomics and a lack of transparency around early investors, questioning why such a large credit line was approved without stricter safeguards.
Egorov defends safeguards
Responding to criticism, Michael Egorov emphasized that Yield Basis has undergone six audits, with a seventh in progress. He highlighted an emergency stop mechanism managed by Curve’s Emergency DAO as a risk control and clarified that Yield Basis would bear responsibility for any exploits.
“If anything happens, it’d be on Yield Basis to deal with it to the highest degree possible,” Egorov assured the community.
Egorov also defended the inclusion of high-profile investors, saying it was natural for a protocol of this scale and aligned with Curve’s strategy of building strength through ecosystem partnerships.
With the approval finalized, all eyes are on how Yield Basis integrates into Curve’s framework, balancing innovation with risk management in a high-stakes DeFi environment.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.