[Weekly] Market Return on StableCoin-based Strategies（12 June 2023): Yields Down with Market

We provide a weekly update of the platforms we track, based on the strategies discussed in Serenity Fund’s Overview of Stablecoin Investments 2022 and the periodical updates.

Note: this is NOT a portfolio. This is an average yield calculation of each risk category, to be used as a benchmark for assessing the risk-return of an investment or a portfolio. Yields derived from mining reward tokens are based on the prices of tokens on 12 June. Yields that are cumulative, e.g. Uniswap and Binance funding rates, and are actual yields over last week, compounded weekly to derive the APY.)

Quick analysis on 12 June:

Risk Free Rate: 2.34% (last week, 2.63%)

• Risk free rate declined in line with the market correction happening over the weekend. Liquidity dropped slightly as well.

Mainstream Rate (Curve1.5x/Convex): 4.1% (last week, 3.8%)

• The mainstream yield increased, but this was mainly due to the abnormal trading volume in the TUSD pool. Trusttoken has stopped one of its banking lines and caused some panic selling.

Benchmark Rate (Other Stablecoin Platforms): 7.7% (last week, 8.1%）

• Conic’s new crvUSD pool topped this category, as it’s new and the TVL is yet small.
• Most other pools saw yields dropping, as the market correction cause most rewards tokens to drop 10% to 20%, bringing down the yields altogether.

Exotic Strategies (non-Ethereum or quasi stablecoin strategies): 4% to 20% (last week, 5% to 17%）

• Ipor’s Dai pool continued to top this week.
• The yields on EVM chain continued to decline, in line with the general market correction.

Delta Neutral Liquidity Providing (Uniswap V2 and GMX):

• GLP’s estimated yield declined again to 11.5% APR this week (earnings before adjustment for impermant loss, hedging cost and traders’ PnL, 5 days estimate of the current week), a big came back from last two weeks’ 6% range.
• There was no Uniswap update this week, as its subgraph is out of sync again.

Funding Rate (Binance Coin-Margined):

• Funding rates were all positive, except for DOT, but remained single digit. Market correct had cause some fear and the sentiment turned into more shorting.

Business Update:

• We have made a SubStack for premium content, mostly our strategy papers for more complex investments. This is a paid service at $49 per month (free for research clients). You can subscribe to the Free version to get a summary of each strategy paper. However, to support our work, we hope you could subscribe to it for the full article — $49 for four to five papers a month on stablecoin and DeFi strategies. For this, we offer a 70% discount for our Twitter and Medium audience: https://serenityresearch.substack.com/1a082767.

The above summary is a snapshot of what the market looks like over the last week and as of Monday. It is not 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, 12 June 2023, Twitter: https://twitter.com/SerenityFund )