[Weekly] Market Return on StableCoin-based Strategies（23 Jan 2023): The Return of the CRV King.

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 23 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 23 Jan:

• Risk Free Rate: 1.68%. Risk free rate, representing the safe yields from USDC lending yield in Compound, Aave and Euler, on Ethereum, is slightly lower than last week’s 1.72%. The bull ran continued last week and gainor came mostly from DeFi tokens. Trading activities improved and the USDC borrowing interest rate in Aave hit 2.0%, highest over the last few months.
• Mainstream Rate (Curve/Yearn/Convex): 3.0%, higher than last week’s 2.6%. Rising CRV and CVX prices are the main factor leading to the higher rate. There has been little movement in the liquidity of these pools.
• Benchmark Rate (Other Stablecoin Platforms): the yields vary from 2% ~ 11%, and averaged 5.7%, marginally higher than last week’s 5.6%. Yield from MIM Convex pool topped this week, as CRV and CVX prices were on the rise. Another beneficiary of the CRV bull run is Gro Protocol, which saw its yield rising 20% compared to weeks before. CRV emission rewards are the main source of DeFi yield and its price is a good indicator of market’s interest in DeFi.
• Exotic Strategies (Other non-USD stablecoin or non-Ethereum platforms: Exotic strategy yields’ are from 5% to 20% now. Velodrome’s alUSD vault continued to top this category and globally this week, as OP price was also on the rise and hit all time high last week. STG, Stargate’s platform token, has also increased in price over the weekend, boosting its platform yield in all pools. Most of the EVM chain DeFi protocols saw their platform tokens’ prices rising, enhancing the yields by a few percentage points generally.
• Delta Neutral Liquidity Providing (Uniswap V2): Uniswap earnings bounced back a little bit more, for half stablecoin, half ETH pairs. From a trading volume perspective, it seems that the market confidence is coming back a little bit this week, much better than the week before when the bull run had just started.
• Funding Rate (Binance Coin-Margined): funding rates were all positive for the week past, with most of the tokens hitting the 0.1%/8-hour mark, indicating a pretty strong buy demand.

Business Update:

• We have made a SubStuck 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 an 80% 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, 23 Jan 2022, Twitter: https://twitter.com/SerenityFund )