[Weekly] Market Return on StableCoin-based Strategies(14 November 2022)

  • Risk Free Rate: 1.10%. Risk free rate, representing the safe yields from Compound (USDC), Aave (USDC) and Curve (3-pool), was higher than last week’s 0.98%. The rise in the rates was a result of higher interests from Aava and Compound as well as trading fees in Curve, as last week’s FTX’s bankruptcy had caused fear and an outflow of significant capital.
  • Curve/Yearn/Convex: 7.1%. The Curve/Yearn Large-Cap Benchmark Rate is significantly higher than last week’s 2.8%. We notice a huge fund outflow, with most pools having reduced TVL in the range of 30% to 40%, except for Aave and Compound pools (which are borrowing related). 3Pool, Curve’s dominant pool, has over 300m or approximately 1/3 liquidity withdrawn over last week. As a result, the trading fees were a lot higher last week. The rates will come back to 2% to 3% level once the market stabilizes.
  • Other Stablecoin Platforms: the yields vary from 3% ~ 32%, and averaged 8.8%, higher than last week’s 6.3%. TrueFi’s USDT pool topped this catogory with 32% yield. There’s no borrowing in the USDT pool; there’s only one borrowing in the USDC and USDC pool has no liquidity. Whilst Alameda does have a single borrower pool in TrueFi, this does not affect the DAO-managed USDT and USDC pool. MIM surprisingly was not affected by the bankruptcy of FTX, as FTX paid back MIM debt to redeem FTT collaterals. MIM yield is also maintained. The other pools mostly have yields slashed, as a result of falling market prices.
  • Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 3% to 12% now. There was also a pleasant surprise of a contained U.S. CPI, and USD weakened as there’s expectation of Fed reducing the pace of rates hike. As a result, both gold and EUR prices rebounded a few percent last week. EVM chain yields rose a bit as liquidity shrank, compensating drops in reward token prices.
  • Uniswap V2: Uniswap earnings were quite high, for half stablecoin, half ETH pairs. Trading volume was a few times higher as the market declined over the FTX chain of events.
  • Binance Coin-Margined Funding Rate: funding rates were mixed. For BTC, ETH and BNB, the rates were largely negative. DeFi tokens, which will benefit from FTX collapse in the long-run, are mostly positive.
  • Research Report: we have a released a new report on Overview of Stablecoin Investment, summarising the status of stablecoin investments. If you are interested, please visit our website or Twitter for a FREE copy.

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The Serenity Fund

The Serenity Fund

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