Jan 9
[Weekly] Market Return on StableCoin-based Strategies（9 Jan 2023): A Pleasant CRV Surprise.
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 9 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 9 Jan:
- Risk Free Rate: 1.37%. Risk free rate, representing the safe yields from USDC lending yield in Compound, Aave and Euler, on Ethereum, is marginally higher than last week’s 1.32%. Some USDC has shifted from Aave to Compound for higher yield, but Aave is still the clear lending in USDC lending with over 900m USDC on Ethereum v2 alone.
- Mainstream Rate (Curve/Yearn/Convex): 2.6%, higher than last week’s 1.9%. There was a pleasant surprise of a soaring CRV price on Monday, which increased over 10%. We have not seen a more bullish CRV for a long time. This increased the yields in general, and also sUSD and LUSD pools are making decent yields, pushing the overall yield higher.
- Benchmark Rate (Other Stablecoin Platforms): the yields vary from 1% ~ 9%, and averaged 4.9%, same as last week’s 4.9%. Pendle Finance continued to top this category with a 9% yield, although we forecast this to come down to a Benchmark + 1% (i.e. 6%) range. It seems that Pendle is going to hang on for a while. Other platforms do not have exciting performances either.
- Exotic Strategies (Other non-USD stablecoin or non-Ethereum platforms: Exotic strategy yields’ are from 3% to 12% now. Curve’s bLUSD pool’s yield has come down quite a bit and the bLUSD price was also done. There’s a large chunk of Chicken Bond waiting to be converted, so the yield and bLUSD price might be volatile in the near term. Please refer to our analysis for details. Mai Finance’s Mai-USDC vault on Arrakis (Polygon) top this category.
- Delta Neutral Liquidity Providing (Uniswap V2): Uniswap earnings continued to remain low, for half stablecoin, half ETH pairs. Uniswap V2 was getting less popular, compared the robust development in V3 pools and other competitors like GMX. For instance, Uniswap V3’s ETH-USDC (0.05% fee) pool has generated $1.29 billion trading volume last week, with $200m liquidity. ETH-USDC pool on V2 has generated only $14 million trading volume, with over $87 million liquidity.
- Funding Rate (Binance Coin-Margined): funding rates were all positive for the week past, except for BNB. LINK was higher than 10%, a good sign that DeFi might be reviving.
Business Update:
- We have made a SubStuck 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 off a 80% 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, 9 Jan 2022, Twitter: https://twitter.com/SerenityFund )
