[Weekly] Market Return on StableCoin-based Strategies（24 October 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 October. 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 October:

• Risk Free Rate: 0.87%. Risk free rate, representing the safe yields from Compound (USDC), Aave (USDC) and Curve (3-pool), was the same last week’s 0.87%. Yield from Curve dropped slightly, but was compensated by the increase in lending yield from Aave.
• Curve/Yearn/Convex: 2.3%. The Curve/Yearn Large-Cap Benchmark Rate is higher than last week’s 2.1%. Whilst the rates were fluctuating marginally over the last few weeks, the decline in TVL was more visible. With a strong USD and increasingly higher rates in USD-fixed deposits and municipal bonds coupons, it seems only logical to withdraw funds from the stablecoin industry to seek safer yields in USD directly. We believe if this is to continue, eventually the stablecoin yields will increase (due to less TVL, other thing being equal) to a reasonable premium over the USD risk-free rate. We have discussed this in our recent Overview of Stablecoin Investment report.
• Other Stablecoin Platforms: the yields vary from 3% ~ 13%, and averaged 6.4%, lower than last week’s 6.7%. This week, TrueFi’s USDT pool continued to top the category. There’s no one borrowing USDT at this moment in TrueFi, so the yield is purely rewards. Whilst the yield from Maple Finance is still good, the liquidity is an issue again. New protocols like Clearpool has a dynamic interest rate which might be an solution for the liquidity issue for uncollateralised lending protocols. A positive note is that Maple has also reduced its initial locking period from 90 days to 30 days, and is working on a V2 to address the liquidity issue as well.
• Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 4% to 18% now. There has been not much change in EUR and gold products, nor the EVMs. We do notice some new protocols been launched, and are actively monitoring them. The rise in the Mai Finance yield on polygon was due to a drop in TVL and the yield is expected to be smoothed to the average level before.
• Uniswap V2: Uniswap earnings continued to be low, for half stablecoin, half ETH pairs, as the market continued to be quiet and there was little trading activities.
• Binance Coin-Margined Funding Rate: funding rates were a mix of positive and negative last week. BTC and ETH are both positive, as well LINK.
• Research Report: we have a released a new report on Overview of Stablecoin Investment, summarizing the status of stablecoin investments. If you are interested, please visit our website or Twitter for a FREE copy.

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 October 2022, Twitter: https://twitter.com/SerenityFund )