[Weekly] Market Return on StableCoin-based Strategies（30 May 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 30 May. 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 30 May:
- Risk Free Rate: 1.04%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was the same as last week’s 1.04%. Market has stopped declining, but remained weak. There was not much enthusiasm in defi farming, nor trading.
- Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 4.9%, marginally lower than last week’s 5.0%. There was not much change in the large pools, so the yield came down even further. Curve has started adjusting down USDT related pools to reduce the backing for USDT, by lowering the A ratios in these pools. As a result, in these pools trading will behave more like Uniswap; some pools showed negative trading yield as a result of this change.
- Other Stablecoin Platforms: the yields vary from 2% ~ 12%, and averaged 8%, lower than last week’s 9%. TrueFi’s BUSD pool topped this week, and Gro Protocol and Fei Protocol were closely after this. We have observed over the last 18 months that even at the worst times, there were still means to earn a relatively same 10% to 12% yield, reflecting a general risk premium for DeFi.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 3% to 12% now. EUR pools still topped this week but incentives are disappearing fast. Abracadabra’s incentives on Arbitrum came back to normal levels. A few more EVM platform DeFi protocols have surfaced and been delivering decent yields. We will be adding them to the list over time.
- Uniswap/Alpha: Uniswap earnings were low last week as well, for half stablecoin, half ETH pairs, as the market did not display much interest in trading in all aspects.
- Binance Coin-Margined Funding Rate: funding rates were severely negative, except for ETH and BTC, in line with the cautious stance of market participants.
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, 30 May 2022, Twitter: https://twitter.com/SerenityFund )