[Weekly] Market Return on StableCoin-based Strategies（17 Apr 2023): Welcome to Shanghai

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 17 Apr. 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 17 Apr:

Risk Free Rate: 2.33%

• The safe yields from USDC lending yield in Compound and Aave on Ethereum, is higher than last week’s 1.94%.
• We saw a drop in liquidity last week in lending pools, in particular in Compound.
• The market had a good run last week, in line with optimism after the success of Shanghai Upgrade and the dumping of ETH was very much contained.

Mainstream Rate (Curve1.5x/Convex): 3.2%

• The average yield of top stablecoins in Curve or Convex, is higher than last week’s 3.3%.
• There has been a mild recovery of 3Pool liquidity and the yields of different pools fluctuated marginally.

Benchmark Rate (Other Stablecoin Platforms): 11.0%

• The average yield of 10 selected Ethereum stablecoin protocols, has yields vary from 5% ~ 18%, and averaged 11.0%, higher than last week’s 10.8%.
• This is due to the replacement of Gro Protocol’s VAULT by Sturdy Finance’s USDC vault. Sturdy Finance is an innovative lending protocol with built-in features to finance leverage yield farmers. In addition to the interests, lenders in Sturdy now also receive STRDY tokens, which are not traded yet.
• Pendle’s Stargate USDT pool continued to top this week.

Exotic Strategies (non-Ethereum or quasi stablecoin strategies): 8% to 29%

• EUR-related pools are recovering as Euler (as well we Angle) are gradually back to business. So agEUR-EUROC pool topped this week globally.
• After publishing an article last week on Gains Network with Pendle Finance, we are now tracking Gains Network’s gDAI earnings on Arbitrum under the Exotic Strategies category. gDAI is the traders’ counterparty pool in Gains Network, and is purely DAI.
• On Arbitrum, we replaced Abracadabra’s MIM pool with the USDC pool from Wombex finance Finance. Wombex finance is a Convex fork, mainly for farming rewards from Wombat Exchange, a Platypus fork.
• Last week, we published a new article on some property-backed stablecoins, $USDR and $HOME. We are not tracking them yet.

Delta Neutral Liquidity Providing (Uniswap V2 and GMX):

• Uniswap earnings continued to remain at low levels to last week, for half stablecoin, half ETH pairs, as the market was quiet last week.
• GMX recorded 24.0% earnings before adjustment for impermant loss, hedging cost and traders’ PnL.

Funding Rate (Binance Coin-Margined):

• Funding rates were all positive last week, including BNB which came back to 10.9% last week. It’s probably a good time to get into funding rate arbitrage again.

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, 17 Apr 2023, Twitter: https://twitter.com/SerenityFund )