[Weekly] Market Return on StableCoin-based Strategies （31 May 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 31 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 31 May:
- Overview: whilst market has stabilized, we continue to see a decline in yields. Trading volume has also subdued, therefore the general returns are low, at this moment. There’s a likelihood that we are entering a bear market, some evidence can be found in Grayscale’s negative premium and also the prelonged negative funding rates in cryptoexchanges’ prepectual futures.
- Curve/Yearn: The Curve/Yearn Large-Cap Benchmark Rate is now 13%, vs 16% last week, as CRV continued to drop. The good news is that Convex has entered the market with incentives and this boosted the yields in general. We have covered Convex in an earlier article, but we are not including this into our weekly yet. We are watching to see how the price and TVL of Convex might stabilize, esp facing direct competition from Yearn.
- Other Stablecoin Platforms: the yields vary from 7% ~ 60%, and averaged 29%, comparable to last week. Washbi Finance, Truefi, xSigma and Liquity are delivering good yields.
- Other (non-USD stablecoin) platforms, aka Exotic Strategies: Mirror Protocol are now over 50% (compound weekly), inched up a little from last week as UST returned to peg successfully. Cover Protocol is in the transition to V2, but the progress seems to be slow, as the team is probably working full steam on Ruler now. We have removed Cover from Exotic, until its V2 is online. Ruler Protocol has rolled over to another month’s fixed interest rate loans — the farming yields are high due to a small TVL now, and will come down when the funds come in.
- Uniswap/Alpha: Uniswap earnings were moderate last week. Leveraged Alpha Homora, the yield on USDC-ETH pair is still over 100% now, after converting APR to APY.
- Compound Leveraged Yield: at 70% leverage, the total return from this strategy is about 10% to 20% last week. Note that this strategy can also be used to hedge USDT exposure.
- Binance Coin-Margined Funding Rate: refunding rates have been negative for also 3 weeks, heralding a bear market, similar to the earlier months of 2018.
(Serenity Team, 31 May 2021, Twitter: https://twitter.com/SerenityFund)