[Weekly] Market Return on StableCoin-based Strategies(19 June 2023): USDT FUD Once More

The Serenity Research
3 min readJun 19, 2023

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 19 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 19 June:

Risk Free Rate: 2.65% (last week, 2.34%)

  • Risk free rate bounced back as the lending rates on Aave went up, probably due to concern on USDT. At the time of writing, Aave V2’s USDC utilisation is over 80%, second time crossing the 80% line in a week’s time. Liquidity increased marginally.

Mainstream Rate (Curve1.5x/Convex): 3.7% (last week, 4.1%)

  • The mainstream yield decreased slightly and TUSD restored to its peg, but its Curve pool saw 30% less liquidity. In a bearish market, any fear or concern has a prolonged impact on the price or liquidity.

Benchmark Rate (Other Stablecoin Platforms): 8.3% (last week, 7.7%)

  • Convex’s Ironbank pool topped this week, due to the unusual trading volume in USDT last week and as it’s a small pool, some transactions routed through this pool and generated good fees for the LPs.
  • Conic’s new crvUSD pool has good yield as week, despite declining from last week’s peak. It seems to us the Conic pools are not very differentiated at this moment in terms of risks of the underlying stablecoins, as they are all relatively safe, so we expect crvUSD pool’s earnings to come down to a level close to other pools.

Exotic Strategies (non-Ethereum or quasi stablecoin strategies): 3% to 19% (last week, 4% to 20%)

  • Ipor’s Dai pool continued to top this week, with a strong IPOR price.
  • The yields on EVM chain continued to decline, in line with the general market correction. At this moment, yields are not only low, but new projects are scarce as well. A long winter might be.

Delta Neutral Liquidity Providing (Uniswap V2 and GMX):

  • GLP’s estimated yield bounced back significantly to 43.5% APR this week (earnings before adjustment for impermant loss, hedging cost and traders’ PnL, 5 days estimate of the current week), probably due to the USDT FUD induced trading volume.
  • Uniswap V2 ETH-Stable pools had very low trading volume last week, contrary to market volatility.

Funding Rate (Binance Coin-Margined):

  • Funding rates were all positive, except for BNB, indicating the the market has mixed views for the outlook going forward.

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, 19 June 2023, Twitter: https://twitter.com/SerenityFund )



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