[Weekly] Market Return on StableCoin-based Strategies（26 December 2022)
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: Yields derived from mining reward tokens are based on the prices of tokens on 26 December. Yields that are cumulative, e.g. Uniswap and Binance funding rates, and are actual yields over last week, compounded weekly to derive the APY.)
(Note: this is NOT a portfolio. This is an average yield calculation of each risk category, to be used as a reference or benchmark in assessing the risk-return of an investment or a portfolio.)
Quick analysis on 26 December:
- Risk Free Rate: 1.36%. Risk free rate, representing the safe yields from USDC lending yield in Compound, Aave and Euler, on Ethereum, is higher than last week’s 1.16%. Liquidity in the lending market has declined slightly over last week, pushing yield higher.
- Mainstream Rate (Curve/Yearn/Convex): 1.6%, lower than last week’s 2.2%, due mainly to the further decline in CRV prices, and less trading volume from the LUSD pool. Liquidity in these pools did not change much overall.
- Benchmark Rate (Other Stablecoin Platforms): the yields vary from 2% ~ 10%, and averaged 5.3%, higher than last week’s 5.0% (excluding Curve bLUSD). We have shifted Curve’s bLUSD pool to the Exotic Strategies this week, as based on our analysis, this strategy is risky in nature and might not have a lasting yield. We have replaced this with Pendle Finance’s FRAX-USDC liquidity pool, which is the trading pair of FRAX-USDC in Curve and its principal only version in Pendle Finance (i.e. without yield). This week, Iron Bank’s Convex pool topped this category.
- Exotic Strategies (Other non-USD stablecoin or non-Ethereum platforms: Exotic strategy yields’ are from 7% to 42% now. We have replaced Convex’s Xaut (gold) pool with Curve’s bLUSD pool (Chicken Bond by Liquity), which topped this category and globally. EVM yields are generally higher than their Ethereum peers. Please note that we have made minor changes to the calculation reference of cross-chain penalty on FTM and Optimism. Please refer to our weekly last week.
- 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, except for BNB which was marginally negative. Only UNI was higher than 10%, indicating some market interest in it.
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, 26 December 2022, Twitter: https://twitter.com/SerenityFund )