[Weekly] Market Return on StableCoin-based Strategies（1 August 2022)
We provide a weekly update of the platforms we track, based on the strategies discussed in Serenity Fund’s Overview of Stablecoin Investments and the periodical updates.
(Note: Yields derived from mining reward tokens are based on the prices of tokens on 1 August. Yields that are cumulative, e.g. Uniswap and Compound’s basic earnings and Binance funding rates, and are actual yields over last week, compounded weekly to derive the APY.)
Quick analysis on 1 August:
- Risk Free Rate: 0.79%. Risk free rate, representing the safe yields from Compound (USDC), Aave (USDC) and Curve (3-pool), was higher than last week’s 0.66%. There’s one more round of rebound, after Fed raised the interest rates of 75 bps, in line with the expectations. Fed also expressed concerns of a slower GDP growth due to the interest rate hike, interpreted by the market as an intention to slow down its rate hikes.
- Curve/Yearn/Convex: 3.7%. The Curve/Yearn Large-Cap Benchmark Rate is slightly higher than last week’s 3.5%, in line with the market rebound. TVL remained more or less stable, with minor declines across the board. As a comparison, the US AA and AAA corporate bonds have 3.5% to 3.7% yields at this moment.
- Other Stablecoin Platforms: the yields vary from 3% ~ 19%, and averaged 9%, slightly higher than last week’s 8%. TrueFi’s USDC Pool topped this week, as Alameda repaid their loans in this pool and caused the rewards yield to go up substantially. We have replaced the Convex D3 Pool with Idle Finance’s USDT Vault this week, as the size and yields of D3 Pool are both shrinking. For Frax, we have replaced its Uniswap V3 FRAX-USDC pool with its Curve FRAX-USDC pool. FRAX-USDC pool has 500m in liquidity and is a Curve base pool; this pool called FraxBP, will be also used to form metapools with other stablecoins like LUSD-FraxBP.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 4% to 20% now. ibEUR is delivering good yields for its pairs with agEUR and sEUR. We have also replaced TradeJoe’s USDC-USDC.e pool with Platypus’ YUSD pool. YUSD is an overcolleteralised stablecoin by Yeti Finance and Platypus is a stable AMM.
- Uniswap/Alpha: Uniswap earnings continued the trend of last week and delivered good earnings, for half stablecoin, half ETH pairs, as a result of the rebound.
- Binance Coin-Margined Funding Rate: funding rates were surprisingly low or negative, suggesting that the spot market is reacting faster to the futures market in the rebound.
The above summary is a snapshot of what the market looks like over the last week and as of Monday. This is by no means the portfolio of any of Serenity Fund. Neither is the above table meant to be a ranking table nor to be exhaustive. There are various other defi protocols and products that can offer different risk and return exposures. Follow our Twitter below to have more timely and detailed information on the defi market.
(Serenity Team, 1 August 2022, Twitter: https://twitter.com/SerenityFund )