[Weekly] Market Return on StableCoin-based Strategies（15 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 15 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 15 Nov:
- Risk Free Rate: 5.54%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was slightly higher from last week’s 4.24%. Market was turbulent last week but went up over the weekend.
- Curve/Yearn: The Curve/Yearn Large-Cap Benchmark Rate is now 16%, much lower than last week’s 27%. CRV and CVX prices came down fair a bit from the recent peaks and more liquidity flooded in the Curve pools as well. More funds are after new pools, and bribes are applied to these new pools to push yields higher.
- Other Stablecoin Platforms: the yields vary from 9% ~ 53%, and averaged 25%, inched down from last week’s 26%. Frax Finance’s liquidity pool on Uniswap V3 continued to lead this category. Higher yields were seen in Liquity and Fei, compared the last few weeks. We did not include USDm in our list, despite there was a mention in our Twitter. USDm unpegged due to a dramatic series of events relating to the protocol’s use of a large amount of CVX and Curve emergence’s gauge kill. We do not opine on the merits of the protocol nor Curve’s actions, but we do warm investors of stablecoins to understand the risks behind any high yield. No free lunch.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategies are delivering 13% to 96% yield now. This week, the yield from Convex’s Neutrino EUR pool made to the top. EUR denominated stablecoins are getting increasingly popular and Convex hosted a number of them, including the traditional Synthetix EUR, Stasis EUR and the newcomers Tether EUR, FixedForex EUR and Neutrino EUR. The penalty rates (the difference between a Curve pool on Ethereum and the same pool on a Layer 2 chain) Polygon and Arbitrum are 6.52%, 3.30% and 15.22% respectively, compared to 4.08%, 2.7% and 16.83% last week.
- Uniswap/Alpha: Uniswap earnings were average last week, for half stablecoin, half ETH pairs. Uniswap V2 volume was low despite a hot market. As other EVM chains are getting more attention, trading activities and liquidity followed over.
- Binance Coin-Margined Funding Rate: funding rates remained high in the range of 10% to 30%, as a result of a hot market.
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 Nov 2021, Twitter: https://twitter.com/SerenityFund)