[Weekly] Market Return on StableCoin-based Strategies(3 Jul 2023): Velodrome V2 Migration Bonus

The Serenity Research
3 min readJul 3, 2023

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 3 July. 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 3 July:

Risk Free Rate: 2.96% (last week, 2.73%)

  • Risk free rate continued to climb up as Compound lending rate went up, partially due to COMP price went up over 75% over the course of last week.

Mainstream Rate (Curve1.5x/Convex): 4.7% (last week, 4.4%)

  • CRV and CVX continued the rising trend in line with the market rebound, pushing Curve and Convex yields higher. The FUD on TUSD due to Prime Trust’s bankrupcy had caused TUSD to depeg slightly last week and also liquidity to drop.

Benchmark Rate (Other Stablecoin Platforms): 7.7% (last week, 7.6%)

  • Conic’s crvUSD pool continued to top this week, as crvUSD continued to expand.
  • Bella maintained good yield over the past few weeks consistently. Most protocols saw small increases in yields, in line with the market rally last week.

Exotic Strategies (non-Ethereum or quasi stablecoin strategies): 5% to 27% (last week, 5% to 25%)

  • USD+ (by Overnight) pool in Velodrome continued to top this week and globally. Last week, Velodrome launched its V2 and all LPs have to migrate from V1 to V2. This caused a temparory spike in APRs in most Velodrome V2 pools, and there’s still a premium now as the migration is still in progress.

Delta Neutral Liquidity Providing (Uniswap V2 and GMX):

  • GLP’s estimated yield dropped slightly to at 13.2% APR this week (earnings before adjustment for impermant loss, hedging cost and traders’ PnL, 5 days estimate of the current week), in line with its historical trading fee yield range. This is only 3% higher than Gains Network’s gDai yield over last week.
  • Uniswap V2 ETH-stablecoin trading pairs remained low yield for a long time.

Funding Rate (Binance Coin-Margined):

  • Funding rates were all positive, as the market continued to look bullish with ETH almost hitting 2000 again.

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, 3 July 2023, Twitter: https://twitter.com/SerenityFund )



The Serenity Research

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