[Weekly] Market Return on StableCoin-based Strategies(17 Jan 2022)

  • Risk Free Rate: 2.96%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was higher than last week’s 2.82%. Market rebounded mildly from the week before but was still not strong.
  • Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 10%, same as last week’s 10%, due to lukewarm prices of inventive tokens. Convex has dominated Yearn for a very long period of time in hoarding CRV and gathering assets. For Curve, it has released templates for anyone to add xxx-ETH factory pools with customised incentive template as well, demonstratiing its ambition to go beyond stablecoin and challenging Uniswap.
  • Other Stablecoin Platforms: the yields vary from 7% ~ 23%, and averaged 16%, higher than last week’s 14%. This is partially due to the change we made to replace Vesper Finance’s Conservative Pool with its Aggressive pool, which is only different in the MakerDao leveraging ratios. Fei Protocol topped this category this week, with a strong TRIBE price, followed closely by Vesper.
  • Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategies are delivering 3% to 54% yield now. Fixed Forex’s EUR pool in Yearn has continued to top this category. Mirror Protocol’s yields are low, due to looming concerns over TerraChain ecosystem’s stability in general. This week, we have added another gold product by Curve, Tether Gold and 3CRV pool, and its Convex pool is generating over 30% APR. At this moment, it’s better than Mirror Protocol’s gold product. We have also included Avalanche chain this week, with a Trade Joe USDC.e and USDC pool. Its penalty (of crossing out of Ethereum) is the difference between the yields of Curve’s AAVE pool on Avalance and Etheruem.
  • Uniswap/Alpha: Uniswap earnings were still not strong last week, for half stablecoin, half ETH pairs, more signs of a weak Uniswap dominance and in general a bearish DeFi market. Further we note that despite there’s still a $80m value of DAI and ETH in the DAI-ETH pool, the trading volume was minimal.
  • Binance Coin-Margined Funding Rate: funding rates remain low or negative last week, with BNB hit very negative levels in particular.

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