Curve DAO crvUSD Credit Line Approved for Yield Basis

September 25, 2025 – Curve DAO has approved a $60 million crvUSD credit line for Yield Basis, a new protocol developed by Curve founder Michael Egorov. The move integrates Curve’s native stablecoin deeper into decentralized finance (DeFi), targeting Bitcoin liquidity pools and yield opportunities ahead of Yield Basis’ mainnet launch.

Expanding Curve’s Ecosystem with Yield Basis

The approved proposal provides Yield Basis with a $60 million crvUSD credit line to support three Bitcoin liquidity pools on Ethereum. These include wrapped Bitcoin (WBTC), Coinbase’s cbBTC, and tBTC, all leveraging a custom automated market maker (AMM) design aimed at reducing impermanent loss.

Curve Finance stated that each pool will initially be capped at $10 million. Beyond yield opportunities for Bitcoin holders, the plan embeds Curve’s stablecoin more deeply in DeFi infrastructure, potentially boosting governance token veCRV’s fee flows and strengthening Curve’s ecosystem.

Concerns Over Risks and Transparency

Despite DAO approval, not all community members were convinced. The pseudonymous analyst Small Cap Scientist criticized the plan as “extremely extractive,” warning that the $60 million line lacked limits tied to crvUSD’s TVL. He argued that a hack or exploit could leave Curve responsible for losses.

Further concerns highlighted incomplete tokenomics and limited transparency about Yield Basis’ seed investors. Critics stressed that granting a new protocol access to such a large crvUSD credit line without additional guardrails may expose Curve to unnecessary risk.

Egorov’s Defense and Safeguards

Curve founder Michael Egorov responded by pointing to Yield Basis’ six completed audits and a seventh underway. He added that Curve’s Emergency DAO multisig has authority to halt operations in case of critical issues, providing an added layer of protection.

Egorov emphasized that liability for any exploits rests with Yield Basis, not Curve. He also defended the involvement of prominent ecosystem investors, saying their participation was natural and strengthened the project’s credibility.

Implications for DeFi and Curve Governance

The crvUSD credit line approval could help Curve strengthen its position in the competitive DeFi stablecoin and liquidity space. By expanding Bitcoin-based pools, Curve may attract new users while deepening governance token utility through veCRV fee flows.

However, the debate also underscores a recurring theme in DeFi governance: balancing rapid innovation with security and transparency. The outcome of Yield Basis’ launch and performance will likely influence how DAOs handle large credit allocations in the future.

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Wide “For” margin seals the Curve credit facility for new Yield Basis protocol https://t.co/nVamg6YoYB

Blockworks

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13 days ago

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