[Weekly] Market Return on StableCoin-based Strategies（6 Dec 2021)
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 Dec. 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 Dec:
- Risk Free Rate: 3.29%. Risk free rate, representing the safe yield from Compound, Aave and Curve, was lower than last week’s 3.48%. Over last weekend, the market had a severe correction, but bounced back a bit on Monday. Defi tokens were affected to a lesser extent and the risk free rate dropped marginally.
- Curve/Yearn/Convex: The Curve/Yearn Large-Cap Benchmark Rate is now 10%, lower than last week’s 12%. This is in line with the market correction over the weekend, as CRV dropped over 20%, affecting the yields from Curve and affiliated platforms. CVX bounced back faster than other defi majors, as its valuation is supported by Votium voting systems, which is estimated to be about 40% yield based on last month bribes.
- Other Stablecoin Platforms: the yields vary from 7% ~ 24%, and averaged 14%, significantly down from last week’s 21%. Frax Finance’s liquidity pool on Uniswap V3 (FRAX/DAI) continued to lead this category, despite coming down from a height of over 40%. Other platforms had dropped due to market correction mostly. This week, we have replaced WasabiX with Vesper, as WasabiX’s strategy we have picked is based on LUSD, which is a derivative of Liquity. This had a little bearing on the lowered average yield of this category.
- Other (non-USD stablecoin or non-Ethereum) platforms, aka Exotic Strategies: Exotic strategies are delivering 4% to 43% yield now. Euro demoninated products on Convex topped this category, as the yields from Mirror Protocol came down to a more reasonable level. A strong performing LUNA in the down market gave investors more confidence over Terra chain’s platforms, such as Mirror Protocol. As a result, more liquidity crossed over to Mirror and lowered the yields, in addition to a lower platform token MIR.
- Uniswap/Alpha: Uniswap earnings were average last week, for half stablecoin, half ETH pairs. This is expected in a declining market, only offset by a strong ETH.
- Binance Coin-Margined Funding Rate: funding rates were low or negative in the down market.
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, 6 Dec 2021, Twitter: https://twitter.com/SerenityFund)
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