[Weekly] Market Return on StableCoin-based Strategies（2 August 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 2 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 2 August:

• Risk Free Rate: 3.77%. Market was on the rise last week, due mainly to a strong BTC and counting down to EIP 1559 of Ethereum. Risk free rate, representing the safe yield from Compound, Aave and Curve, inched up from last week’s 3.27%。
• Curve/Yearn: The Curve/Yearn Large-Cap Benchmark Rate is now 13%, higher than last week’s 12%, due to a rising CRV. Convex is still leading and cvxCVR has maintained.
• Other Stablecoin Platforms: the yields vary from 8% ~ 30%, and averaged 21%, increased from 17% last week. Liquity topped this category this week, due to a rising ETH and strong. [Amended 3 Aug] Frax has migrated its liquidity pair Frax-USDC from Uniswap V2 to V3, and is now giving an APR of 25.9% (weekly compouned to be 29.5%.
• Other (non-USD stablecoin) platforms, aka Exotic Strategies: Exotic strategies are delivering 18% to 44% yield now, excluding Ruler Protocol. Ruler Protocol is refining its products with farming program ended but rewards are given to orderbooks. We will update the calculation later. Polygon protocols Qi and Polyquity continued to do well. The penalty rate of 5.32% is the difference of Curve’s Aave Pool yield on Polygon over the same pool on Ethereum, narrowed from last week’s 7.88%.
• Uniswap/Alpha: Uniswap earnings were negative, for half stablecoin, half ETH pairs. This is due to a rising ETH that caused impernament loss (probably temporary due to how we estimate it, for further details please refer to our early articles on Hedged Liquidity Mining).
• Compound Leveraged Yield: at 70% leverage, the total return from this strategy is about 15% plus last week. Note that this strategy can also be used to hedge USDT exposure.
• Binance Coin-Margined Funding Rate: refunding rates are a mix of positives and negatives, as it’s hard to predict a long-term direction of the market.

(Serenity Team, 2 August 2021, Twitter: https://twitter.com/SerenityFund )