[Weekly] Market Return on StableCoin-based Strategies（6 June 2022)

We provide a weekly update of the platforms we track, based on the strategies discussed in Serenity Fund’s Overview of Stablecoin Investments and the periodical updates.

(Note: Yields derived from mining reward tokens are based on the prices of tokens on 6 June. Yields that are cumulative, e.g. Uniswap and Compound’s basic earnings and Binance funding rates, and are actual yields over last week, compounded weekly to derive the APY.)

Quick analysis on 6 June:

• Risk Free Rate: 0.90%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was lower than last week’s 1.04%. Market was still pessimistic and the yields from Aave and Compound continued to decline.
• Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 4.9%, same as last week’s 4.9%. The TVL of Curve’s 3pool has recovered a bit after adjusting the A ratio, succussfully reducing the USDT composite in the pool.
• Other Stablecoin Platforms: the yields vary from 2% ~ 13%, and averaged 8%, same as last week’s 8%. Gro Protocol’s PWRD incentivised pool came to top this week, and also topped globally in our chart, indicating the weak yield from other categories. Gro Protocol’s incentives will be vested over a 12-month period, making it less attractive. Higher yields can be considered by holding Vault, the junior trench of Gro Protocol. For more details, please refer to our premium strategy paper on Gro Protocol.
• Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 3% to 10% now. EUR pools still topped this week but incentives are now at less than 10% levels. This is comparable to Ethereum platforms, thus making cross-chain platforms less attractive, considering the risks involved. Optimism has airdropped its token OP, and a few new platforms surface with incentivised mining, e.g. Velodrome Finance. We will be watching these platforms to see if they can stabilize at certain yield levels.
• Uniswap/Alpha: Uniswap earnings were low last week as well, for half stablecoin, half ETH pairs, as trading volume was still low last week. From this week onwards, we have removed Alpha Homora’s leveraged product, as its yields have been consistently lower than what’s required to cover implied impermanent loss and borrowing cost.
• Binance Coin-Margined Funding Rate: funding rates were half positive and half negative. Whilst funds are still into ETH and BTC, the demand for other major coins are back to a more normal levels, easing the funding rates compared to last two weeks.

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.

In view of the changing landscape of the DeFi industry and increasingly complex product offerings in the space, we are now publishing premium strategy papers to cover these “degen” type of protocols. For more information, please refer to our article “Launch of Premium Strategy Paper” in Medium on 9 May.

(Serenity Team, 6 June 2022, Twitter: https://twitter.com/SerenityFund )