In the original YieldSpace Paper, Yield introduced a new automated market maker for trading between a base asset and "fixed yield" tokens, or "fyTokens", of that base asset. FyTokens are ERC-20 tokens that represent future payment of the base asset after a specfied time. After maturity, a user may redeem a fyToken by burning it to receive the base asset one-for-one. YieldSpace markets must maintain reserves of fyTokens and the base asset as inventory for future trades. However, while held as reserves, the base asset earns no returns. To increase the returns for LPs, we can place all base assets into Yield Bearing Vaults that earn interest and can be withdrawn at any time. Yield Bearing Vaults are ERC-20 tokens representing a desposit of an underlying asset into a protocol that pays interest on that asset over time. Some examples are Yearn Vault tokens (like yvUSDC) or Compound cTokens. Yield Bearing Vaults capitalize interest increasing a conversion rate between the ERC-20 vault and the base asset over time. Yield Bearing Vaults are further described in ERC-4626, an effort to standardize such vaults (https://github.com/ethereum/EIPs/blob/master/EIPS/eip-4626.md). The goal of this document is to describe the basic derivation of a YieldSpace market using Yield Bearing Vaults. Base Model The original YieldSpace sought to create a market to trade between a base asset $X$ and a fyToken asset $Y$ where the interest rate is the ratio of the fyToken reserves $y$ to the base asset reserves $x$: