[Weekly] Market Return on StableCoin-based Strategies(8 August 2022)

The Serenity Research
3 min readAug 8, 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 8 August. 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 8 August:

  • Risk Free Rate: 0.85%. Risk free rate, representing the safe yields from Compound (USDC), Aave (USDC) and Curve (3-pool), was higher than last week’s 0.79%. The market continued to rise last week, with optimism coming from ETH merger and also lack of pressure from an immediate Fed meeting (the next one being in Sept). Amid the tightening US-China tension over Pelosi visit to Taiwan, some funds are more willing to consider cryptocurrency as a politically neutral alternative investment.
  • Curve/Yearn/Convex: 3.2%. The Curve/Yearn Large-Cap Benchmark Rate is slightly lower than last week’s 3.7%, as yield rates from Iron Bank and sUSD pool came down slightly. TVL of the major pools did not move much over last week.
  • Other Stablecoin Platforms: the yields vary from 3% ~ 17%, and averaged 8%, slightly lower than last week’s 9%. TrueFi’s USDC Pool continued to top this week, and the higher yield attracted some investors, e.g. sifu.eth, to join the pool. This softened the liquidity issue to a certain extent. We have included Frax-USDC base pool since last week, and there are several stablecoins paired with this base pool, such as sUSD, LUSD, or BUSD, delivering yield from 7% to 11% on Convex.
  • Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategy yields’ are from 6% to 22% now. ibEUR is delivering good yields for its pairs with agEUR and sEUR, and topped globally this week. We have included from this week Velodrome on Optimism chain. Velodrome is a fork of AC’s Solidly Exchange (on Fantom) and is one of the leading protocols on Optimism in terms of TVL. There are a few stablecoin pools, and sUSD-USDC is the biggest pool so far with 8.2% yield, before adjusting cross-chain penalty.
  • Uniswap/Alpha: Uniswap earnings continued the trend of last week and delivered good earnings, for half stablecoin, half ETH pairs, although it came down from the peaks two weeks ago. This indicates the market participants are more active in general than June, and remain opportunistic when there’s little news in the market.
  • Binance Coin-Margined Funding Rate: funding rates were a mix of positive and negative, with UNI being outstandingly positive, as trading volume on Uniswap had remained strong whilst most innovative defi protocols seeing some decline after the end of incentive boosts.

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.

(Serenity Team, 8 August 2022, Twitter: https://twitter.com/SerenityFund )

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The Serenity Research

Zero market risk and stable return - risk neutralised cryptocurrency fund.