[Business Update] Launch of Premium Strategy Paper
Since the DeFi summer in 2020, this space has grown a lot and is becoming increasingly complex. DefiLlama has recorded $139.7 billion funds in DeFi now and there are over 10 blockchains, other than Ethereum, where DeFi platforms are available.
Many have expressed that as the market sentiment is turning bearish this year, the good days of 2020 are gone and there’s no more 30% yield in easy protocols like Uniswap or Curve. We tend to think this is not because of the market conditions, although a bearish market does bring down yields. Rather, it’s a matter of risk appetite diversification. Large funds park in Aave, Curve or Convex, seeking low but safe yield whilst remaining liquid; adventurous degens go for new blockchains and exotic structures to seek high yields, weathering the storms.
DeFi is a sub-optimal efficient market. While the entire DeFi market might have a different risk profile compared to other asset classes, within DeFi, the rule of high-risk, high-return still applies. And DeFi market is very efficient to a large extent.
Knowing the risks is critical. Do not risk what you cannot lose; do not chase returns in the dark.
Premium Strategy Paper
In our weekly reports, we cover major DeFi categories and their yields. This is for ourselves and all to have a sense of the risk-return profiles. We disclose weekly returns that range from risk-free (Aave, Compound, Curve yields) to exotics (quasi-stable like gold, oil or Euro, or cross-chain).
There’s another category of DeFi projects where we think it’s too volatile for tracking purpose, and we do not include in our weekly papers. These are the “degen” stablecoin projects, e.g. algorithmic stablecoins, fractional reserve stablecoins, new DEX on new chains, leveraged farms, cross-chain bridge liquidity pools, etc.
They are risky, but they do offer high yields to compensate for the risks — DeFi is an efficient market and there’s risk-return parity. Being risky does not mean they are not quality projects, but they are often risky in terms of structure or intent to serve a niche or emerging market need.
In order to keep our readers, the DeFi enthusiasts, more informed of the risks of these projects, we are now publishing strategy papers for advanced investors of DeFi. These papers will be a 10–20 page due diligence report focusing on the risks of high-yield projects. This is to aid your research work, by providing a set of comprehensive information and a second opinion on these high-risk, high return opportunities.
This will be a paid report, issued on a biweekly basis, and each time covering one project and its related farming strategy. If you are interested in the content, please contact our twitter for a free trial copy. (https://twitter.com/SerenityFund)
Below is an example of our recent strategy paper. The content of this paper includes the strategy and execution steps; more importantly, it also covers the risks involved in this protocol, if you wish to earn the 30% yield. For this paper in particular, the risk is the collateralisation behind the algorithm stableman and this paper provides the details on how to monitor the collateralisation ratio (while you are inventing into this project).
(Serenity Team, 9 May 2022, Twitter: https://twitter.com/SerenityFund )