[Weekly] Market Return on StableCoin-based Strategies（28 Feb 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 28 Feb. 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 28 Feb:
- Risk Free Rate: 1.49%. Risk free rate, representing the safe yield from Compound, Aave and Curve, further declined from last week’s 1.60%. The outbreak of Russia-Ukrain war has caused great uncertainty in all financial markets, affecting cryptocurrency in many aspects as well.
- Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 4.5%, lower than last week’s 5.5%. CRV and CVX prices continued to decline, so as many other platform tokens. Not only Defi, but many other innovative spaces of blockchain such as NFT, have halted in light of the financial market uncertainty caused by the looming possibility of a large scale war. We are of the view that the market will not recover its appetite for innovation and will seek harbour in safer projects, until there’s a conclusion on the Russia-Ukrain conflict. In the short-term, it means less fiat being converted to cryptocurrency (offset only by the SWIFT ban on Russia), lower stablecoin-denominated yield and strong support for mainstream coins like BTC and ETH.
- Other Stablecoin Platforms: the yields vary from 5% ~ 16%, and averaged 11%, lower than last week’s 11%. Maple Finance’s vault topped this category this week; its yield is good but you have to lock the principal for 90 days. Our stablecoin farms are mostly concentrated on Ethereum; but we reckon opportunities in other EVM chains and will be covering some other chains systematically in the coming weeks.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 5% to 123% now. Mirror Prorocol’s USO (oil) vault topped this category will over 100% APY, as a combined results of a small TVL and a mild recover of MIR price. On the other hand, the yields of EUR-denominated products came down to 10%-20% range and stablilized there; so are the stablecoin yields on other chains like Polygon or FTM.
- Uniswap/Alpha: Uniswap earnings were higher last week as well, for half stablecoin, half ETH pairs, as the war shock stirred market and trading volume was higher.
- Binance Coin-Margined Funding Rate: funding rates were mixed of positive and negatives last week, indicating there’s no clarity on the direction of the market in the short-term.
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, 28 Feb 2022, Twitter: https://twitter.com/SerenityFund)