[Weekly] Market Return on StableCoin-based Strategies(10 October 2022)

  • Risk Free Rate: 0.74%. Risk free rate, representing the safe yields from Compound (USDC), Aave (USDC) and Curve (3-pool), was marginally higher than last week’s 0.72%. The market was very quiet in general, although there was some anticipation that the Fed will probably pivot its stance on rate hikes.
  • Curve/Yearn/Convex: 2.3%. The Curve/Yearn Large-Cap Benchmark Rate is the same as last week’s 2.3%, with no material change in the TVLs of each pool. CVX prices increased substantiantially compared to last week, boosting the yield. However, the lending rates from Iron Bank were lower, pulling down the average.
  • Other Stablecoin Platforms: the yields vary from 2% ~ 10%, and averaged 5.9%, higher than last week’s 5.6%. TrueFi’s USDT pool and MIM (Convex pool) were both slightly over 10%, topping this category this week. However, despite maintaining its peg, MIM’s liquidity in Curve is very skewed towards MIM, with the pool having close to 90% in MIM. In this week, we have replaced Idle Finance with Notional Finance. Notional Finance is a fixed income protocol on Ethereum, and 6m deposit of DAI gave a 3.5% yield now. Notional Finance does not lock the deposit for 6 months; but withdrawing a deposit is subject to the market interest rate then. This is similar to trading a zero-coupon bond. Providing liquidity to Notional Finance gives slightly higher yield as well, but the mechanism is also more complex.
  • Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 3% to 11% now. EUR remained weak but due to incentives from Angle, EUR pools are delivering good yields, and topped globally this week. EVM chains continue to deliver reasonable yields, with Velodrome being the best protocol, hosting a few different stablecoin farms
  • Uniswap V2: Uniswap earnings were at its lowest point, for half stablecoin, half ETH pairs, as the market continued to be quiet and there was little trading activities.
  • Binance Coin-Margined Funding Rate: funding rates were a mix of positive and negative last week. UNI has been over 8% for a few weeks; this would mean buying UNI and short the same amount of UNI in Binance would generate a delta-neutral 9.1% yield (based on the table above).

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The Serenity Fund

The Serenity Fund

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Zero market risk and stable return - risk neutralised cryptocurrency fund.