[Weekly] Market Return on StableCoin-based Strategies（24 Jan 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 24 Jan. 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 24 Jan:
- Risk Free Rate: 2.12%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was significantly lower than last week’s 2.96%. Market crashed over 30% last week, with ETH now hovering around $2400 levels, from its average of $3000 plus a week before.
- Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 7%, lower than last week’s 10%, in line with the market dip. Convex is still the safer place where large amounts of capital seek refuge and some decent returns, leveraging on Curve’s incentives. However, it’s also facing competitions from other protocols, e.g. veDAO and 0xDAO in the wake of ve(3,3) by Andrew Cronje. Famtom chain has been absorbing liquidity from other chains and to a certain extent this mitigated the price dips of the incentives tokens like CVX and CRV.
- Other Stablecoin Platforms: the yields vary from 5% ~ 18%, and averaged 11%, lower than last week’s 16%. Yields were lower than 20% across this category, which was not seen last year. This was due partially to the market dip, but also partially competition from other chains. Stablecoins yields from platforms on FTM, Avax, Arbitrum, Moonriver/Moonbeam, can offer higher yield in the range of 20% to 40% or higher.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategies are delivering 5% to 29% yield now. Xaut-3CRV pool on Convex, i.e. Tether Gold and 3CRV pool, topped this week. Yield came down across all chains, except for some of FTM’s protocols where a temporary war on the ve(3,3) NFTs is going on, driving USDC yield over 30% and DAI and MIM over 50%.
- Uniswap/Alpha: Uniswap earnings were weak last week as well, for half stablecoin, half ETH pairs, in line of the dip and the trading volume did not go up much during the dip. This is in line with our observation that trading volume is shifting out of Uniswap gradually.
- Binance Coin-Margined Funding Rate: funding rates remain low and negative last week, with BNB and DOT hit very negative levels in the mid of the market dip.
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, 24 Jan 2022, Twitter: https://twitter.com/SerenityFund)