[Weekly] Market Return on StableCoin-based Strategies（27 Mar 2023): Airdrop Frenzy

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 27 Mar. 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 27 Mar:

Risk Free Rate: 2.32%

• The safe yields from USDC lending yield in Compound and Aave on Ethereum, is comparable to last week’s 2.33%.
• It’s good to hear the hacker of Euler returned half of the funds, which means there’s some progress in the recovery. We will monitor the situation here. For the time being, our risk free rate still only comprises of Aave and Compound USDC. We also advise users not to rush into agEUR before everything settles down.
• Last week, Arbitrum made a huge airdrop. The market is now enthusiastic again about airdrop hunting — leading projects are zkSync and Layerzero, etc. While airdrops are a great way to earn some free tokens, it’s crucial to remain vigilant since there are fraudulent projects out there seeking to exploit the trend. Watch out.

Mainstream Rate (Curve1.5x/Convex): 2.9%

• The average yield of top stablecoin in Curve or Convex, is lower than last week’s 4.9%.
• The decline was mainly due to the TUSD pool’s yield going back to normal.

Benchmark Rate (Other Stablecoin Platforms): 10.3%

• The average yield of 10 selected Ethereum stablecoin protocols, has yields vary from 3% ~ 15%, and averaged 10.3%, lower than last week’s 11.8%.
• Conic Finance’s DAI pool, which we added last week, topped this category this week. It’s followed closely by Pendle’s Frax-USDC vault, which is ending soon and a new vault to be launched.
• We published two premium articles over the last two weeks: Sturdy Finance, an innovative lending protocol; and Paxos Dollar. Both are on our watch list now under this category.

Exotic Strategies (Other non-USD stablecoin or non-Ethereum platforms): 6% to 42%

• Selected non-Ethereum or qausi stablecoin strateiges, have yields ranging from 5% to 57% now.
• Ipor’s DAI pool continued to top this category and globally this week. Sommelier and DeltaPrime have decent yields too.
• We published an article on Archimedes Finance, a new leveraged farming protocol built on Origin Dollar.

Delta Neutral Liquidity Providing (Uniswap V2 and GMX):

• Uniswap earnings went down a bit compared to last week, for half stablecoin, half ETH pairs, as the market cooled down slightly.
• GMX recorded 40.6% earnings before adjustment for impermant loss, hedging cost and traders’ PnL. We have revised the GMX yield calculation to use the 5 days accumulative fees (from last Wednesday as reported by the official website) to estimate the APR. .

Funding Rate (Binance Coin-Margined):

• Funding rates were all single-digital positive last week, except for BNB, which remained significantly negative due to its launchpad activities.

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, 27 Mar 2023, Twitter: https://twitter.com/SerenityFund )