[Weekly] Market Return on StableCoin-based Strategies（30 Jan 2023): Good Days Are Back?

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 in assessing the risk-return of an investment or a portfolio. Yields derived from mining reward tokens are based on the prices of tokens on 30 Jan. 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 30 Jan:

• Risk Free Rate: 1.90%. Risk free rate, representing the safe yields from USDC lending yield in Compound, Aave and Euler, on Ethereum, is higher than last week’s 1.68%. The market stabilized and there’s an improvement of trading volume, so the demand for USDC increased. Aave has launched its V3 on Ethereum and it’s expected to draw liquidity over time.
• Mainstream Rate (Curve/Yearn/Convex): 3.1%, higher than last week’s 3.0%. CVX took over CRV to lead the run, boosting overall Convex yields. There was little movement in liquidity in the pools over last week.
• Benchmark Rate (Other Stablecoin Platforms): the yields vary from 2% ~ 9%, and averaged 5.9%, marginally higher than last week’s 5.7%. Yield from the MIM Convex pool continued to top this category this week, but the absolute yield came down from 11% a week ago. Other pools had marginal yield improvements as well, so that the average yield was higher.
• Exotic Strategies (Other non-USD stablecoin or non-Ethereum platforms: Exotic strategy yields’ are from 5% to 25% now. YUSD liquidity providing on Platypus Finance (via Vector Finance) topped this category and globally this week, after a strong upward surge of Platypus’ platform PTP. EUR products remained high yield as EUR continued to appreciate against USD and attracting attention.
• Delta Neutral Liquidity Providing (Uniswap V2): Uniswap earnings bounced back more, for half stablecoin, half ETH pairs. USDT-ETH pool saw a annualised trading fee of more than 10%, which we did not see for a long period of time.
• Funding Rate (Binance Coin-Margined): funding rates were all positive for the week past, with most of the tokens hitting the 0.1%/8-hour mark, similar to last week. This is a good signal for cross-board market optimism.

Business Update:

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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, 30 Jan 2022, Twitter: https://twitter.com/SerenityFund )