> For the complete documentation index, see [llms.txt](https://yields-organization.gitbook.io/yieldbase/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://yields-organization.gitbook.io/yieldbase/how-yieldbase-works.md).

# How YieldBase Works

**1. Deposit into Liquidity Pools**

Users begin by choosing from all the available Liquidity Pools that align with their investment preferences. YieldBase offers a range of top-tier pools involving major assets such as Bitcoin (BTC), Ethereum (ETH), Avalanche (AVAX), Traderjoe (JOE), BENQI and stablecoins like USDC. Once selected, users deposit funds directly into the list of chosen pools, with YieldBase smart contracts handling liquidity provisioning.

**2. Concentrated Liquidity and Yield Farming**

YieldBase deploys its smart contracts to provision user capital into pools within DEX's. These pools serve as liquidity sources for traders. As traders execute exchanges within the pools, users earn a share of the transaction fees proportional to the liquidity they’ve provided. YieldBase enhances returns by optimizing the Concentrated Liquidity approach, allowing for more efficient capital allocation.<br>

**3. Strategic Fee Distribution**

Through its advanced algorithms and market analysis, YieldBase works towards ensuring that the capital deposited is allocated in pools with optimal trading activity. Users benefit from a strategic share of the fees generated by DEX trading activity, resulting in sustainable and consistent yields.