[Weekly] Market Return on StableCoin-based Strategies（1 Nov 2021)

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 Nov. 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 Nov:

• Risk Free Rate: 6.27%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was slightly higher from last week’s 5.86%. With ETH breaking all-time-high, the market continued to remain bullish and a lot of altercoins had all-time-high last week. We saw an overall rise in yield across all categories.
• Curve/Yearn: The Curve/Yearn Large-Cap Benchmark Rate is now 24%, higher than last week’s 20%. A strong CVX was the main reason and the launching of Votium has generated income to CVX, supporting its valuation and created demand for this token.
• Other Stablecoin Platforms: the yields vary from 11% ~ 60%, and averaged 25%, up from last week’s 20%. Frax Finance’s liquidity pool on Uniswap V3 continued to lead this category, due to a massive revaluation of FXS by the market. This was partially due to the launch of TokeMak, which invited defi communities into competing for liquidity and drove the price of platform tokens higher. Other than FXS, most defi platform token rose a bit in line with a rising market, pushing yield higher in general.
• Other (non-USD or non-Ethereum stablecoin) platforms, aka Exotic Strategies: Exotic strategies are delivering 30% to 72% yield now (excluding Curve Geist pool). This week, the yield from Mirror Protocol’s silver-UST pair contiued to top. The penalty rates (the difference between a Curve pool on Ethereum and the same pool on a Layer 2 chain) Polygon and Arbitrum are -1.72% and 3.19% and17.13%, respectively, compared to 8.78% and 3.24% last week. It’s interesting to note that due to a surge of demand in USDC on Ethereum, the Curve Aave pool rate on Ethereum is higher than that of Polygon. From this week, we have also included Curve’s Geist pool. Geist is an Aave fork on FTM. The penalty rate for FTM is now 17.13%, due to a strong $FTM price that distorted the yield temporarily.
• Uniswap/Alpha: Uniswap earnings were quite high last week, for half stablecoin, half ETH pairs. This is the result of rising market and the trading volume was high for ETH. Similarly, Alpha Homora’s leveraged LP pairs also generated high returns.
• Binance Coin-Margined Funding Rate: funding rates inched up near 30%, as a result of a rising market and ETH breaking ATH. BNB’s fund rates lagged behind a bit but came to positive from being negative for a few weeks.

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 generate higher yields, and offer a variety of risk exposures. Follow our Twitter below to have more timely and detailed information on the defi market.

(Serenity Team, 1 Nov 2021, Twitter: https://twitter.com/SerenityFund)