[Weekly] Market Return on StableCoin-based Strategies(12 July 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 12 July. 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 12 July:

  • Risk Free Rate: 2.87%. We have introduced a conceptual risk free rate for De-Fi, for benchmarking purpose. For calculation, please refer to this article. Market was stable, despite the risk free rate coming down a bit.
  • Curve/Yearn: The Curve/Yearn Large-Cap Benchmark Rate is now 9%, down from 11% last week. Convex is still leading, but there are comments that SBF is farming and dumping $CVX, so there’s pressure on the yields due to a declined CVX price.
  • Other Stablecoin Platforms: the yields vary from 9% ~ 25%, and averaged 15%, same as last week. Washbi Finance still topped this category. There’s little change in this category; but there are new opportunities coming out, e.g. Abracadabra (the newest Curve stablecoin pool $MIM) has both a farm and a leveraged earning product. Impermax, which we briefly mentioned in Twitter, has been doing well as well. There’s a trend of farming shifting to yield management, e.g. leverage, tranching, fixed term, etc. More articles to follow.
  • Other (non-USD stablecoin) platforms, aka Exotic Strategies: Exotic strategies are delivering 20% to 40% plus yield now, with Mirror’s iAU-UST pool topping this category and also globally. The penalty rate of 6.52% is the difference of Curve’s Aave Pool yield on Polygon over the same pool on Ethereum. We might add a few Polygon protocols later, but we are still internally debating.
  • Uniswap/Alpha: Uniswap earnings were moderate last week at the rate of 23%, for half stablecoin, half ETH pairs. ETH-WBTC pair was negative due to funding cost. Noticably, activities are coming down — we need some strong boost like EIP 1559 to boost interests in blockchains.
  • Compound Leveraged Yield: at 70% leverage, the total return from this strategy is about 10% plus last week. Note that this strategy can also be used to hedge USDT exposure. We have a few strategies of hedging USDT risks, and please check out our Medium for details.
  • Binance Coin-Margined Funding Rate: refunding rates varied across coins are mostly negative, staying put for a while might a better idea.

(Serenity Team, 12 July 2021, Twitter: https://twitter.com/SerenityFund)