While modern code-conforming steel buildings can withstand seismic events without collapse through substantial inelastic action, the damages to structural members limit the building’s post-earthquake functionality and safety. An efficient approach to minimize structural damage is to implement elements with large ductility and energy dissipation capability as shear fuses. Shear fuses are designed to protect the surrounding members from damages by yielding and are then easily replaced after the event imposing significant lateral forces. The butterfly-shaped dampers are a novel type of structural fuse with varying width that has been shown to improve structural energy dissipation and eliminate the high strain concentration in critical areas. However, a detailed risk-based assessment is needed to investigate their implementation and effectiveness in seismic retrofitting of mid-rise buildings. In this study, the seismic performance of a six-story steel braced frame with supplemental butterfly-shaped dampers is investigated and compared with a conventional eccentrically-braced system using a probabilistic approach. Nonlinear finite element models are constructed using OpenSees simulation framework. Incremental dynamic analysis is then performed to derive seismic fragility and demand hazard curves in terms of the structure’s global responses. The results show that butterfly-shaped dampers tangibly improve the structural seismic performance of the braced frame system compared to conventional systems at all considered performance levels. In addition, the improvement is more pronounced at larger drift demand levels associated with higher damage states. In particular, butterfly-shaped dampers reduces the mean annual frequency of exceeding the complete damage of the original building by a factor of 4 for the studied building.