[Weekly] Market Return on StableCoin-based Strategies（15 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 15 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 15 August:
- Risk Free Rate: 0.75%. Risk free rate, representing the safe yields from Compound (USDC), Aave (USDC) and Curve (3-pool), was lower than last week’s 0.85%. ETH traded for a while over $2000 and that gave the market strong confidence. Risk free rate was lower, as lending rates from Aava and Compound were both lower than last week, probably as a result of more funds flowing back.
- Curve/Yearn/Convex: 4.6%. The Curve/Yearn Large-Cap Benchmark Rate is much higher than last week’s 3.2%, due to higher yield from Iron Bank pool. USDT lending and borrowing rates were higher than usual last week, pushing up yields in smaller protocols like Iron Bank. Under Curve column, the rate displayed for Iron Bank was the weekly average, whilst the rate under Convex column was the rate as-is.
- Other Stablecoin Platforms: the yields vary from 3% ~ 13%, and averaged 7.6%, slightly lower than last week’s 8.1%. TrueFi’s USDC Pool continued to top this week. Liquidity issues on this pool is temporarily resolved, after Amber Group made repayments of $28m loan promptly. Interestingly, we noticed that Justin Sun immediately withdrawn $10m liquidity from this pool, within hours of Amber repayment. Maple Finance’s Maven11 pool remained low liquidity. Again we saw yields of different protocols converging to an equilibrium of about 8%, after the market stablilized. This happened several times over last year, and is a testimony of the DeFi market being efficient.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 5% to 24% now. ibEUR continued to deliver good yields for its pairs with agEUR and sEUR, and remained a global top this week. Yields from EVM chains, after adjusting for cross-chain penalties, are about 10% levels. Velodrome’s USDC-sUSD pool has a lower yield comparatively, but its USDC-LUSD pool yields over 10%. Protocols on Fantom chains are not performing generally, and the total TVL of Fantom has declined from over $8b earlier this year to one-tenth, or approximately $700m today.
- Uniswap/Alpha: Uniswap earnings continued the trend of last week and delivered average earnings, for half stablecoin, half ETH pairs, as market was less active over last week.
- Binance Coin-Margined Funding Rate: funding rates were a mix of positive and negative, as UNI continued to be strong. BTC turned positive, as the market sentiment is slowly turning optimistic.
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, 15 August 2022, Twitter: https://twitter.com/SerenityFund )