[Weekly] Market Return on StableCoin-based Strategies（23 May 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 23 May. 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 23 May:
- Risk Free Rate: 1.04%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was much lower than last week’s 1.44%. In the aftermath of UST downfall, liquidity was still cautious and level of 3Pool TVL did not bounce back much. CRV prices were even lower, as market participants are not only having doubts about individual stablecoins, but rather lack confidence on the potentials of stablecoins as a whole.
- Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 5.0%, much lower than last week’s 6.6%, but higher than the week before’s 4.4%. Compared to a week before (excluding the extraordinary trading volume caused by the UST fall), yields this week are higher in this category as liquidity is much less than before.
- Other Stablecoin Platforms: the yields vary from 2% ~ 16%, and averaged 9%, lower than last week’s 11%. Gro Protocol topped this week, but its reward token GRO will only by vested over 12 months (or taking a 70% penalty). The yields from different platforms are very different, indicating that market participants now have very diverse views about risks. FRAX, in particular, is a 90% collateralised algo-stablecoin, but was affected by fear instilled by the UST fall and its platform token FXS was massively sold out last week. On the other hand, the founder of Fei Protocol is proposing in governance forum to remove all FEI incentives.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 3% to 32% now. EURs are doing slightly better than USD, thanks to the incentives from Angle Protocol. Abracadabra’s incentives on Arbitrum are higher than average now, due to a reduction in funds. MIM has been generating higher yields in EVM chains, suggesting some strong demand, but the reason was not clear to us.
- Uniswap/Alpha: Uniswap earnings were low last week as well, for half stablecoin, half ETH pairs, as traders are waiting for the market to recover. There has been no good news in the cryptocurrency industry nor the real-world finance side for quite some time.
- Binance Coin-Margined Funding Rate: funding rates were severely negative, except for ETH and BTC, and this suggests that investors have clearly made their choice in preparation for this bearish 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.
In view of the changing landscape of the DeFi industry and increasingly complex product offerings in the space, we are now publishing premium strategy papers to cover these “degen” type of protocols. For more information, please refer to our article “Launch of Premium Strategy Paper” in Medium on 9 May.
(Serenity Team, 23 May 2022, Twitter: https://twitter.com/SerenityFund )