Yield Basis: Solving Impermanent Loss in DeFi by Michael Egorov

"In our simulations, LPs went from 3% to 20% APR by removing impermanent loss." - Michael Egorov, Founder, Curve Impermanent loss has long discouraged crypto liquidity providers—but Curve’s founder is changing that. In this talk, Michael Egorov introduces “Yield Basis,” a mechanism using compounding leverage and rebalancing budgets to eliminate impermanent loss. Backed by real simulations, it shows LPs can earn double-digit APR even in volatile markets—without bleeding value every time prices shift. This is the next evolution in crypto AMMs. --- 00:00 Solving Impermanent Loss 01:46 The Cost of Passive LPing 04:08 Square Root Pricing Is the Problem 05:48 Compounding Leverage Explained 08:50 Volatility Decay and Loss 10:09 Curve’s Crypto Pools and Auto-Management 13:36 Why Concentrated Liquidity Is Hard to Rebalance 15:36 Using Interest Rates to Fund Pool Efficiency 17:47 Simulation Setup and Yield Results 20:58 9% APR in Bear Markets, 20% in Bull 22:35 FX, Gold, and Stable Pairs Next --- Explore Upcoming Events 👇 ➣ Stable Summit III: Devconnect • Website: https://www.stablesummit.xyz/ • Email: info@stablesummit.xyz • Apply to Speak/Sponsor: https://partyactionpeople.typeform.com/devconnect2025?typeform-source=www.stablesummit.xyz ➣ Stablecoin Summit: Singapore by XREX & Unitas • Website: https://stablecoinsummit.com/ • Email: team@stablecoinssummit.com • Apply to Speak/Sponsor: https://partyactionpeople.typeform.com/stblcoin3?typeform-source=stablecoinsummit.com ➣ Blockchain Oracle Summit: Devconnect • Website: https://blockchainoraclesummit.io/ • Email: info@partyactionpeople.com • Apply to Speak/Sponsor: https://partyactionpeople.typeform.com/BOS25apply ➣ Listen to the Stable School Podcast Link: https://stableschool.org/podcast ➣ Follow Stable Summit on X Link: https://x.com/stable_summit — About: By Stake Capital Group and Party Action People, and presented by Curve Finance, Stable Summit has been gathering leaders in stablecoins almost quarterly since 2023. Our content is curated through hours of one-on-one research with the leading minds in the stablecoin space. Each program is a highlight reel of what leaders in stables are curious about in real time. Our audience consistently features the full spectrum of the stablecoin ecosystem, from DeFi protocols to institutions, from stablecoin issuers to central banks, and every llama in between.