Feb 6
[Weekly] Market Return on StableCoin-based Strategies（6 Feb 2023): New Protocols Blossom
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 6 Feb. 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 6 Feb:
- Risk Free Rate: 2.24%. Risk free rate, representing the safe yields from USDC lending yield in Compound, Aave and Euler, on Ethereum, is higher than last week’s 1.90%. The market remained active and there’s a lot of activities on the Layer2 and new chains, such as Optimism, Arbitrum, and Canto. This pushed the demand for stablecoins and caused the risk-free rate to increase.
- Mainstream Rate (Curve/Yearn/Convex): 3.1%, same as last week’s 3.1%. CRV and CVX prices stabilized and the funds are getting aggressive in terms of risk appetite, so the yields from the mainstream stablecoin protocols are not impressive, compared to new protocols launched recently.
- Benchmark Rate (Other Stablecoin Platforms): the yields vary from 2% ~ 10%, and averaged 5.6%, marginally lower than last week’s 5.9%. Dodoex’s USDT-DAI pool topped this category with more than 10% yield, as a result of the price of Dodoex’s platform token DODO. The overall funds for mature protocols are less, as there are new products and tokens being launched frequently in the past few weeks. The rising market and new narratives like AI concepts are drawing a lot more attention to investments as well, leaving less capital for delta neutral strategies.
- Exotic Strategies (Other non-USD stablecoin or non-Ethereum platforms: Exotic strategy yields’ are from 10% to 19% now. Velodrome’s alUSD-USDC pool topped this category and globally this week, suppassing YUSD pool on Vector Finance by a narrow margin. We have replaced the USDC pool on Stargate Fantom with USDC-DAI pool on Equaliser Exchange, a Velodrome/Solidly fork on Fantom. This pool is currently earning 12%. For more details about Velodrome, Equaliser or other Solidly forks, please refer to our latest premium paper.
- Delta Neutral Liquidity Providing (Uniswap V2): Uniswap earnings are mixed, for half stablecoin, half ETH pairs. USDT-ETH pool continued to have a double-digit trading fee yield, but other pools are less than 10%.
- 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 except for BNB and DOT, as the market remained optimistic last week.
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 an 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, 6 Feb 2023, Twitter: https://twitter.com/SerenityFund )
