[Weekly] Market Return on StableCoin-based Strategies（27 June 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 27 June. 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 27 June:
- Risk Free Rate: 0.62%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was the same as last week’s 0.62%. Market rebounded from the lows of the week before, but the market participants are still cautious in general.
- Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 5.3%, higher than last week’s 3.3% (excluding outlier sUSD pool). This is the result of rising CRV and CVX prices from their lows in the past week. TVL generally does not change much, but we noticed signficant increase in sUSD pool, due to the launch of atomic swap (and thus higher trading fees income). TVL in IronBank has significantly reduced, pushing the yield higher.
- Other Stablecoin Platforms: the yields vary from 1% ~ 19%, and averaged 9%, slightly lower than last week’s 10% (excluding mStable). The fundamentals did not change much this week, despite price movements of platform incentive tokens pushing the yields higher. MIM topped this category, despite restoring its peg, its total supply has been reduced to less than 200m. The bad debt issue remains unresolved, although much clarity was given on this topic and pacified market fears. TrueFi and Maple continued to offer higher yield but their liquidity is still a concern, which seems can only be resolved when loan repayments come in. Liquity’s stability pool’s yield is high now, but LUSD is also trading at a premium of 1.016.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 2% to 33% now. EUR and gold products remained lukewarm, as investors had no appetite for exotics in this market conditions. On the other hand, overcollateralised stablecoins like MAI and MIM, are delivering much higher yields. Investors have mixed views: on one hand, there’s concern over the fair value of these stablecoins due to bad debts; on the other hand, these protocols have actually withstood the stress tests so far and did not unpeg too much. We have also added Stargaze USDC pool on Fantom to replace Geist pool on Curve.
- Uniswap/Alpha: Uniswap earnings were average last week as, for half stablecoin, half ETH pairs, as market calmed down and trading resumed to the normal levels.
- Binance Coin-Margined Funding Rate: funding rates were still all negative, but the funding rates for BTC and ETH were negative single digits, indicating an improved market sentiments compared to the last two weeks.
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, 27 June 2022, Twitter: https://twitter.com/SerenityFund )