[Weekly] Market Return on StableCoin-based Strategies（27 Sept 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 27 Sept. 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 Sept:
- Risk Free Rate: 4.32%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was moderately up from last week’s 4.14%. Last week, the market was in a shock from the Chinese government tightened efforts on cryptocurrency, but some viewed this was positive for De-Fi as well.
- Curve/Yearn: The Curve/Yearn Large-Cap Benchmark Rate is now 11%, same as last week. The liquidity pool rewards of cvxCRV (Curve Factory pool, staked in Convex) is now having the same yield of staking CRV directly with Convex Finance, reflecting an efficient market.
- Other Stablecoin Platforms: the yields vary from 8% ~ 40%, and averaged 19%, up from last week’s 16%. The increased upper limit of the range as well as the average was due to the replacement of Fei’ FEI-3CRV pool over Vesper Finance. Fei topped this category this week, with its incentive on FEI-3CRV Curve factory pool liquidity over 40%, weekly compounded.
- Other (non-USD stablecoin) platforms, aka Exotic Strategies: Exotic strategies are delivering 7% to 64% yield now. Whilst Mirror Protocol continued to do well. Polygon pools’ yield declined constantly over the last few weeks, with Mai pools averaging 15% in various products. The penalty rate of 11.01% is the difference of Curve’s Aave Pool yield on Polygon over the same pool on Ethereum, up from last week’s 4.14%. This is due mainly to the Aave yield, which again might be temporary. From this week onwards, we are adding MIM-2pool of Abracadabra (MIM) on Arbitrum, and this topped the category as well as globally, with a strong fees and high incentives. Similar to Polygon, the Arbitrum risk premium is the difference of Curve 3pool on Ethereum and Curve 2pool on Arbitrum, and it is 5.86% at the time of writing.
- Uniswap/Alpha: Uniswap earnings declined to single digit mostly, for half stablecoin, half ETH pairs, as a reflection of concerns over the business of the cryptoexchanges, resulting into outflow of funds from exchanges to De-Fi protocols.
- Binance Coin-Margined Funding Rate: funding rates are a mix of positive and negatives, showing mixed market sentiments.
(Serenity Team, 27 Sept 2021, Twitter: https://twitter.com/SerenityFund)