[Weekly] Market Return on StableCoin-based Strategies(31 October 2022)

  • Risk Free Rate: 0.90%. Risk free rate, representing the safe yields from Compound (USDC), Aave (USDC) and Curve (3-pool), was higher than last week’s 0.87%. This was due mainly to a higher lending interest rates in Aave and Compound.
  • Curve/Yearn/Convex: 2.9%. The Curve/Yearn Large-Cap Benchmark Rate is higher than last week’s 2.3%. The CRV and CVX prices bounced back slightly as the market rose over last week. We also noticed that liquidity in major pools continued to decline, probably as a result of funds flowing out of the stablecoin industry. This is in line with our assumption of an efficient market — when U.S. Raises its fed rates, more funds from all asset classes will flow to its bond markets. In the stablecoin industry, the outflow of funds is slow (due to many reasons, e.g. fiat off-ramp restrictions) but steadily happening.
  • Other Stablecoin Platforms: the yields vary from 4% ~ 11%, and averaged 7.1%, lower than last week’s 6.4%. This week, TrueFi’s USDT pool continued to top the category. Same as last week, there’s still no one borrowing USDT at this moment in TrueFi, so the yield is purely rewards. Maple offered similar yield, and so do newer platforms like Clearpool. MIM’s Convex Finance pool also continued to have about 10% yield, a risk compensation for the stablecoin’s very skewed weight in the Curve pool of 85% to 90% constantly. The interest rate and exchange activites were higher than normal last week, leading to platforms like mStable and Vesper having higher yield too, but probably not lasting.
  • Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 4% to 13% now. EUR rose a little bit in the light of European Central Bank rose its rate by 1.5% aggressive last week. Expectedly, this will reduce the outflow of funds to the U.S. Market. Gold price remained weak. EVM chains have comparable yields to their Ethereum peers.
  • Uniswap V2: Uniswap earnings continued to be low, for half stablecoin, half ETH pairs, except fo WBTC-ETH which had a spike of trading volume last Tuesday. Whilst Uniswap V2 is the oldest swap, there are several other swap that have decent trading volume of ETH, BTC against stablecoins, on both Ethereum and other EVM chains. We tend to think, due to impermanent loss and volatility of the yields involved in this strategy, the equilibrium yield should be over 10%, given the current market situation.
  • Binance Coin-Margined Funding Rate: funding rates were mostly positive except for BNB, in the mid of a rising market.
  • Research Report: we have a released a new report on Overview of Stablecoin Investment, summarising the status of stablecoin investments. If you are interested, please visit our website or Twitter for a FREE copy.



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The Serenity Fund

The Serenity Fund


Zero market risk and stable return - risk neutralised cryptocurrency fund.