[Weekly] Market Return on StableCoin-based Strategies(8 Nov 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 8 Nov. 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 8 Nov:

  • Risk Free Rate: 4.24%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was slightly higher from last week’s 6.27%. ETH and BTC continued to be strong but the market expectation has been established, so the yields are coming down for risk free rate now.
  • Curve/Yearn: The Curve/Yearn Large-Cap Benchmark Rate is now 27%, much lower last week’s 24%. This is due to a decline price of both $CRV and $CVX, down from their peak a week ago.
  • Other Stablecoin Platforms: the yields vary from 10% ~ 52%, and averaged 26%, inched up from last week’s 25%. Frax Finance’s liquidity pool on Uniswap V3 continued to lead this category. Yield range has narrowed a bit as market stabilized, though remaining hot.
  • Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategies are delivering 20% to 71% yield now (excluding Curve Geist pool). This week, the yield from Mirror Protocol’s silver-UST pair contiued to top. The penalty rates (the difference between a Curve pool on Ethereum and the same pool on a Layer 2 chain) Polygon and Arbitrum are 4.08%, 2.7% and 16.83% respectively, compared to -1.72% and 3.19% and17.13% last week.
  • Uniswap/Alpha: Uniswap earnings were quite high last week, for half stablecoin, half ETH pairs. This is the result of rising market and the trading volume was high for ETH. Similarly, Alpha Homora’s leveraged LP pairs also generated high returns.
  • Binance Coin-Margined Funding Rate: funding rates inched up near 30%, as a result of a rising market. BNB’s fund rates turned negative again, despite its price rocketed.

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, 8 Nov 2021, Twitter: https://twitter.com/SerenityFund)