Yield Basis Launches Permissionless PropAMM, Prioritizes WETH Pool Deployment

ChainCatcher report: Yield Basis, an automated market-making protocol founded by Michael Egorov, creator of Curve, has announced the launch of a permissionless propAMM designed to enhance its liquidity mechanism on Curve. The design integrates market-aware pricing with dynamic fees, aiming to increase trading volume, reduce arbitrage losses, and improve returns for liquidity providers. According to simulations covering the past 18 months, Yield Basis’s WETH position is projected to achieve an 8.5% annualized growth in ETH terms under the new design, compared to 3.6% under current parameters. The team stated that WETH liquidity providers need take no additional action—the new design will apply directly to their pool. A small transaction fee of 0.50% will be charged to bring the pool price back in line with the market price; anyone may submit price updates or deposit funds, and the underlying code is publicly available. The WETH pool will be deployed first, with Bitcoin-related pools to follow after successful deployment of the WETH pool. According to the announcement, the pool will charge fees based on the profits arbitrageurs extract from trades, retaining approximately two-thirds of profits above a minimum fee. The new design features lower per-trade fees, simulates trading volume approaching three times the current level, and requires only about one-fourth of the current donation volume. Yield Basis DAO holds control over this strategy, while the Curve Emergency DAO retains the ability to shut it down in emergencies; the underlying Curve pool contracts remain unchanged. Curve DAO Vote 1508 will integrate the strategy into the WETH pool and set the reserved profit ratio; Yield Basis Vote 60 will set the LevAMM fee at 1.5% (up from 1.3%) and the donation rate at approximately 1.2% of pool value annually (down from approximately 5%). The above simulations include only arbitrage swaps and exclude regular trades and liquidations.