[Weekly] Market Return on StableCoin-based Strategies（2 Jan 2023): Patience is the Keyword for the New Year.

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 in assessing the risk-return of an investment or a portfolio. Yields derived from mining reward tokens are based on the prices of tokens on 2 Jan. 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 2 Jan:

• Risk Free Rate: 1.32%. Risk free rate, representing the safe yields from USDC lending yield in Compound, Aave and Euler, on Ethereum, is marginally lower than last week’s 1.36%. The new year started with little movement in the markets, as overall confidence is still weak. Prices of non-main stream tokens are declining quietly, and liquidity is gradually shrinking.
• Mainstream Rate (Curve/Yearn/Convex): 1.9%, lower than last week’s 1.6%. Major Curve pools remained more or less the same as last week, except for some upward movements in the trading fee income from the LUSD pool, pushing overall yield higher.
• Benchmark Rate (Other Stablecoin Platforms): the yields vary from 2% ~ 9%, and averaged 4.9%, lower than last week’s 5.3%. The top yielding pools like MIM and Iron Bank in Convex higher yield declined to be less than 10%. Pendle Finance held on and delivered the highest in the category this week. Declining platform token prices are the main factor of a declining overall yield in the Benchmark Rate.
• Exotic Strategies (Other non-USD stablecoin or non-Ethereum platforms: Exotic strategy yields’ are from 6% to 22% now. Curve’s bLUSD pool continued to top this category and globally this week, but this is not risky free. There’s a selling pressure on bLUSD, and please refer to our analysis for details. EVM farms remained stable but low.
• Delta Neutral Liquidity Providing (Uniswap V2): Uniswap earnings continued to remain low, for half stablecoin, half ETH pairs, as the market was quietly declining last week.
• Funding Rate (Binance Coin-Margined): funding rates were all positive for the week past and UNI was higher than 10%, but its price was only hovering in the $5 range and showed no sign of going up. Patience is the keyword for the new year of 2023.

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