[Weekly] Market Return on StableCoin-based Strategies（24 Apr 2023): At Road Crossing

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 24 Apr. 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 24 Apr:

Risk Free Rate: 2.67%

• The safe yields from USDC lending yield in Compound and Aave on Ethereum, is higher than last week’s 2.33%.
• This is due largely to the drop in Liquidity in the Aave pool.
• The market, in the mid of a lot of optimism, had a mild set back last week, with ETH down about 10% from a recent peak of $2100. Other coins mostly followed; some investors were seeking hopium in meme coins again like $PEPE. We are probably at the moment where it’s not clear which direction the market is heading to; and this may take a while.

Mainstream Rate (Curve1.5x/Convex): 3.5%

• The average yield of top stablecoins in Curve or Convex, is higher than last week’s 3.2%.
• Despite declining CRV and CVX prices, yields overall inched up a bit due to voting, as well as the higher lending rates from Aave pool (which flows to the Curve Aave pool). Liquidity remained flat compared to a week ago.

Benchmark Rate (Other Stablecoin Platforms): 9.5%

• The average yield of 10 selected Ethereum stablecoin protocols, has yields vary from 5% ~ 14%, and averaged 9.5%, higher than last week’s 11.0%.
• There was no changes to the composition of the pools; yields came down due mainly to the declining prices of reward tokens.
• Pendle’s Stargate USDT vault continued to top this category.

Exotic Strategies (non-Ethereum or quasi stablecoin strategies): 8% to 29%

• The top of this week went to IPOR’s DAI pool. IPOR’s USDT pool was back to business as well, with a slightly higher yield.
• We published an article on on Wombex Finance and is now tracking it on Arbitrum, since last week. Wombex is a Convex fork, mainly for farming rewards from Wombat Exchange, a Platypus fork.
• Last week, we also published a new article on Beethoven X’s Overnight Finance Vault On Beefy, a relatively more complex strategy involving Overnight, Beefy and Beethoven X.

Delta Neutral Liquidity Providing (Uniswap V2 and GMX):

• Uniswap earnings continued to remain at low levels to last week, for half stablecoin, half ETH pairs, except for ETH-USDC pari, in line with the market decline last week.
• GMX recorded 27.7% earnings before adjustment for impermant loss, hedging cost and traders’ PnL.

Funding Rate (Binance Coin-Margined):

• Funding rates were all positive last week, except for BNB, which was negative 11% due to the launchpad activities and related hedging of BNB.

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, 24 Apr 2023, Twitter: https://twitter.com/SerenityFund )