[Weekly] Market Return on StableCoin-based Strategies(2 May 2022)

The Serenity Research
3 min readMay 2, 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 2 May. 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 2 May:

  • Risk Free Rate: 1.57%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was lower than last week’s 2.01%. Last week, the market dipped significantly with major coins dropping 10% to 20%, as a result, yields are lower now.
  • Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 4.7%, expectantly lower than last week’s 6.0%. DeFi yields are now lower across the board, and the sentiment is generally pessimistic. The supply of USDC, which we used to gauge the general interests in DeFi, has declined from 53 billion in early March to 49 billion this week.
  • Other Stablecoin Platforms: the yields vary from 6% ~36%, and averaged 13%, higher than last week’s 9%. Fei Protocol topped this week but it was due to a hack to Rari Capital, a project it acquired earlier and used to manage its FEI and other liquidity thereafter. While FEI is not affected in terms of peg, there was loss to the protocol and distrust of the team, resulting into funds flowing out of the protocol and pushing the yield higher. Apart from FEI, Gro Protocol’s PWRD-3CRV would have been the highest with 15% yield (and the average would be 9%, same as last week’s 9%). Quite some platforms have yields following into single-digit, and good yields are hard to find. This is in line with a shrinking demand for DeFi, as indicated in the supply of USDC.
  • Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 6% to 36% now. Mirror Prorocol’s USO (oil) vault continued to top this category. USDN’s Back-up ratio is less than 80% now, but its peg holds at 0.97 USDC and our stay-out warning still holds. For EVM chains, yields vary and Layer 2s have mixed sentiments for their outlooks, with FTM being particularly pessimistic. FTM declined significantly last week, causing some cascading liquidations.
  • Uniswap/Alpha: Uniswap earnings were low last week as well, for half stablecoin, half ETH pairs, in the mid of a bearish market sentiment.
  • Binance Coin-Margined Funding Rate: funding rates were a mix of positive and negative, with BTC and ETH less affected by a declining market. Fund returning to the majors to seek safe harbour.

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

--

--

The Serenity Research

Zero market risk and stable return - risk neutralised cryptocurrency fund.