Kraken Joins Launchpad Battle Through Legion and Yield Basis Alliance

In mid-September, Kraken partnered with ICO platform Legion to launch TGE platform Kraken Launch, which is set to debut its first project Yield Basis. This move marks Kraken as another mainstream exchange entering the Launchpad business, following Binance and OKX.

As the inaugural project, Yield Basis is developed by Michael Egorov, the renowned founder of DeFi project Curve. This BTCFI protocol aims to provide impermanent loss protection for BTC holders and has already generated widespread attention and discussion in the crypto market.

To understand market expectations for Kraken Launch and Yield Basis, it's necessary to review the performance of other exchanges' Launchpads and the investment logic behind them.

The CEX Launchpad Stories

Over the past year, major exchanges have generated remarkable returns through their Launchpads. Binance Alpha's average monthly returns per participant once exceeded $1,500, and while OKX's recently launched X Launch has faced controversy, crypto communities were flooded with X Launch tutorial guides, demonstrating the market's eager anticipation and expectations for such products.

Many projects launched through exchange Launchpads have also performed well in the market. $MYX, which went live through Binance Alpha in May, surged nearly 20x in early this month. Holders of the 644 $MYX tokens airdropped to each Binance Alpha participant saw peak returns approaching $13,000, a staggering figure that triggered a new wave of FOMO sentiment toward exchange Launchpads.

These numbers reflect the core logic behind the market's FOMO toward veteran exchanges: debut projects on quality exchanges often receive massive liquidity premiums and attention, with this critical information translating into actual investment returns.

This explains why the current market holds such optimistic views toward Kraken Launch, the collaboration between Kraken and Legion. On one side is a veteran exchange with 14 years of operation focused on compliance, and on the other is a new launch platform calling itself "the world's first ICO underwriter." Their partnership creates a platform that inherently carries advantages of positioning scarcity and high liquidity from inception.

Unlike traditional Launchpads, projects launched through Kraken Launch can immediately list on Kraken exchange after the sale ends. This clear expectation significantly boosts market expectations for returns from this token launch.

From a timing perspective, data from major exchange Launchpads already demonstrates that the market is in a state of high FOMO toward this product category, and these emotions naturally spill over to new platforms. Kraken Launch's debut project at this timing will very likely capture the continuation of this sentiment.

However, it's worth noting that Kraken Launch faces significant challenges as a latecomer. Binance and OKX have already captured the main market share of the Launchpad space, making it difficult for new platforms to attract quality projects. More importantly, the Yield Basis project itself faces controversy within the Curve community, with some members viewing its 60 million crvUSD credit facility as a systemic risk. These uncertainties could all impact the actual performance of Kraken Launch's debut.

Curve Founder's New BTCFI Experiment

As the inaugural project on Kraken Launch, Yield Basis's core value proposition addresses one of DeFi's most persistent challenges: impermanent loss. In traditional AMM mechanisms, when prices fluctuate dramatically, liquidity providers often earn significantly less than simply holding the assets directly, and this difference is impermanent loss.

Simply put, when you provide liquidity to a trading pool, if token prices change, your assets automatically rebalance, and the final returns are often inferior to direct holding. Data shows that when prices move 5x, impermanent loss can reach 25%. This problem has plagued DeFi development for years and has deterred many BTC holders from participating in liquidity mining.

Yield Basis employs a 2x leverage mechanism where users deposit BTC, and the protocol automatically borrows an equivalent amount of crvUSD to pair with BTC in Curve pools, using the generated LP tokens as debt collateral. When BTC prices rise, the protocol borrows more crvUSD to maintain 2x leverage; when prices fall, it repays part of the debt.

Yield Basis is built entirely on Curve infrastructure, utilizing Curve's CryptoSwap AMM and crvUSD stablecoin, ensuring technical stability.

However, innovation often comes with controversy. Just 2 days earlier, Curve DAO passed Proposal 1206, approving a 60 million crvUSD credit facility for Yield Basis, sparking significant debate within the community. Supporters view this as Curve ecosystem's backing of innovation, but critics raise valid concerns - this funding represents nearly 60% of crvUSD's total supply, and any issues could potentially jeopardize the entire system's stability.

More concerning is that Curve forum members have pointed out a subtle conflict of interest: several key Curve ecosystem figures who participated in the voting are also investors in Yield Basis. While Egorov responded that inviting prominent ecosystem participants is "natural," this situation of being both judge and player inevitably raises questions about decision-making fairness.

Regarding tokenomics, the $YB token has a total supply of 1 billion tokens, with 30% allocated for community incentives, 25% for team allocation, 15% as development reserves, and the remaining 30% evenly distributed among investor sales, Curve ecosystem licensing, and partnerships.

On another note, Yield Basis's mechanism requires liquidity providers to choose between earning BTC-denominated trading fees or YB token rewards. This design may work well in bull markets, as investors tend to choose tokens for potential appreciation, but during bear markets, if most people opt for stable BTC returns over YB tokens, it could put pressure on token value.

How to Participate

This Yield Basis project launch consists of two phases, requiring advance registration on both Kraken and Legion platforms with KYC verification.

First is the presale phase for up to 20%, conducted on the Legion platform using a Merit-Based allocation mechanism. This phase requires connecting wallet, Twitter, GitHub and other platform accounts. Legion will comprehensively calculate user scores based on on-chain activity, social contributions, and code contributions, with higher-scoring users receiving larger allocation shares in this phase.

The second phase will complete the sale of the remaining at least 80% of $YB tokens, conducted simultaneously on Legion and Kraken Launch, using a first-come-first-served basis open to all KYC-verified users.

It's important to note that KYC requirements on Kraken and Legion platforms are relatively strict, requiring advance preparation of identity documents and proof of residence. Additionally, users from certain regions (United States, Canada, Australia, etc.) may be unable to participate in this token launch.

Currently, neither Yield Basis nor Kraken Launch has announced the specific launch timing. However, since Kraken and Legion require 1-3 days to review KYC information, investors interested in this token launch are advised to complete registration and KYC verification in advance.

Market Observations and Related Discussions

Based on community observations, Kraken Launch's first token launch project announcement experienced an 18-hour delay, with officials providing no clear explanation. As of the evening of September 24th, no information or interface related to Yield Basis launch was visible within Kraken.

On another front, recent discussions about Yield Basis and Kraken Launch show highly similar content patterns, potentially indicating underlying risks.

The current market sentiment toward this Kraken Launch of $YB is largely optimistic, with supporters led by Delphi Ventures founder José Maria Macedo, who describes YB as "Bitcoin's version of Ethena," highlighting Yield Basis's innovation in impermanent loss solutions. In a Delphi Digital podcast, he emphasizes founder Egorov's pioneering contributions to DeFi and the protocol's market potential.

Meanwhile, there are also some skeptical voices in the market, primarily focused on concerns about potential risks to Curve DAO, believing that the 60 million crvUSD credit facility could introduce systemic risks.

Yield Basis, as Kraken Launch's inaugural project, carries the market's dual expectations for both technological innovation and wealth creation potential.

However, as a protocol still in testing phase, investors need to fully recognize the technical risks and market uncertainties involved. With FOMO sentiment driving the market, maintaining rational analysis and risk control becomes particularly crucial.

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