[Weekly] Market Return on StableCoin-based Strategies（17 Jan 2022)

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 17 Jan. 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 17 Jan:

• Risk Free Rate: 2.96%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was higher than last week’s 2.82%. Market rebounded mildly from the week before but was still not strong.
• Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 10%, same as last week’s 10%, due to lukewarm prices of inventive tokens. Convex has dominated Yearn for a very long period of time in hoarding CRV and gathering assets. For Curve, it has released templates for anyone to add xxx-ETH factory pools with customised incentive template as well, demonstratiing its ambition to go beyond stablecoin and challenging Uniswap.
• Other Stablecoin Platforms: the yields vary from 7% ~ 23%, and averaged 16%, higher than last week’s 14%. This is partially due to the change we made to replace Vesper Finance’s Conservative Pool with its Aggressive pool, which is only different in the MakerDao leveraging ratios. Fei Protocol topped this category this week, with a strong TRIBE price, followed closely by Vesper.
• Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategies are delivering 3% to 54% yield now. Fixed Forex’s EUR pool in Yearn has continued to top this category. Mirror Protocol’s yields are low, due to looming concerns over TerraChain ecosystem’s stability in general. This week, we have added another gold product by Curve, Tether Gold and 3CRV pool, and its Convex pool is generating over 30% APR. At this moment, it’s better than Mirror Protocol’s gold product. We have also included Avalanche chain this week, with a Trade Joe USDC.e and USDC pool. Its penalty (of crossing out of Ethereum) is the difference between the yields of Curve’s AAVE pool on Avalance and Etheruem.
• Uniswap/Alpha: Uniswap earnings were still not strong last week, for half stablecoin, half ETH pairs, more signs of a weak Uniswap dominance and in general a bearish DeFi market. Further we note that despite there’s still a $80m value of DAI and ETH in the DAI-ETH pool, the trading volume was minimal.
• Binance Coin-Margined Funding Rate: funding rates remain low or negative last week, with BNB hit very negative levels in particular.

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, 17 Jan 2022, Twitter: https://twitter.com/SerenityFund)