The Rollup How To Earn Real Bitcoin Yield Without Impermanent Loss with Michael Egorov
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May 3, 2025 Michael Egorov, the founder of Curve and creator of Yield Basis, joins the discussion to tackle the notorious impermanent loss in DeFi. He unveils his innovative approach to leverage liquidity tokens for real Bitcoin yield, without the usual risks. The conversation delves into the complex landscape of decentralized finance, addressing the challenges of liquidity and governance mechanisms. Egorov also explores user preferences for yield options and the relationship between Bitcoin's stability and yield generation. A must-listen for crypto enthusiasts!
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Largest On-Chain Loan Anecdote
- Michael Egorov once held the largest known loan on-chain using MakerDAO.
- He used this loan to avoid selling his CRV tokens or ETH, reflecting his belief in long-term value.
Impermanent Loss and Yield Basis
- Impermanent loss results in LPs withdrawing less value than deposited despite earning fees.
- Yield Basis algorithm eliminates impermanent loss by using leverage on Curve CryptoSwap pools.
Square Root Price Dependency
- The value of liquidity tokens rebalances to the square root of Bitcoin's price.
- Yield Basis applies a constant leverage to invert this square root, eliminating impermanent loss.