[Weekly] Market Return on StableCoin-based Strategies（25 July 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 25 July. 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 25 July:

• Risk Free Rate: 0.66%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was lower as last week’s 0.70%, as the market stabilized and calmed down from a 2-week long rebound. Price performances are a mix of good and bad, and trading volume was high.
• Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 3.5%, same as last week’s 3.5%. CRV and CVX tokens recovered to their price levels about a month ago and hovered there. TVL for most pools increased marginally, and Iron Bank saw a continued decline in TVL, reasons not clear. This category is a relatively safe class, as the stablecoin exposures here are old one, despite including USDT. Curve and Convex are relatively battled-tested protocols with no negative records. This is suitable for the standard corporate treasury management or other long-term purposes.
• Other Stablecoin Platforms: the yields vary from 2% ~ 15%, and averaged 8%, same as last week’s 8%. Abracadabra’s MIM pool continued to lead this category this week. There was little changed compared to last week: uncollateralised lending platforms like Maple and Truefi still have very tight or no liquidity; Frax and Fei protocols have little or no incentives. There’s news that Curve is launching its own stablecoin and so will Aave platforms. Stablecoin will be a class of assets that stabilize and have a steadily increasing market share in cryptocurrency. Although its composition might change from time to time, stablecoin is a stable business.
• Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 5% to 11% now. Euro prices are stabilizing, and so investors are looking at Euro products again. Iron Bank EUR has recovered at least half from its mild depegging earlier, and we are monitoring this to include it back in our list. MAI and MIM related investments have lower yields from weeks before, as market participants have a more relaxed view on the risks on these overcollateralised stablecoins.
• Uniswap/Alpha: Uniswap earnings continued to be reasonably good last week, for half stablecoin, half ETH pairs, as trading volume was good when the voices in the markets are mixed of positive and negative.
• Binance Coin-Margined Funding Rate: funding rates were mixed as well for the tokens we track, indicating that there’s no consensus in the market and therefore the market might move side-ways for some time.

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, 25 July 2022, Twitter: https://twitter.com/SerenityFund )