Market Update

Itayose and Auto-Rolling Report: Q1 2025

Latest Interest Rate Trend

Kenji Mitsusada

Published in

Secured Finance

5 min readMar 28, 2025

Introduction

Welcome to our Q1 2025 Market Report, featuring the latest Itayose (batch auction) and Auto-Rolling results on Secured Finance. This quarter, we’re once again focused on Ethereum, Arbitrum, and Filecoin for auto-roll as well as Itayose — where the first two chains feature a 2-year new market, while Filecoin (FVM) offers a 6-month. We also highlight the debut of USDFC, a FIL-backed stablecoin on Filecoin.

Below you’ll find updated APR tables comparing data from Q4 2024 to Q1 2025, along with key observations shaping this quarter’s outcomes.

1. Itayose Report

1.1 Overview

Itayose Period: March 21–27, 2025
Maturities:
Ethereum & Arbitrum: 2-year bond expiring on 26 March 2027
Filecoin (FVM): 6-month market expiring on 26 September 2025
Participation: Nearly 100 accounts contributed orders this quarter, highlighting ongoing interest in both 2-year and 6-month offerings.

What Is Itayose?
Itayose is a batch auction inspired by Japanese trading mechanisms. It aggregates buy (lend) and sell (borrow) orders in a limited window to determine transparent opening prices for newly issued zero-coupon bonds (ZC bonds). For a deeper explanation, see our Itayose feature article on Medium.

1.2 Itayose APR Results

Ethereum Chain

Arbitrum Chain

Filecoin Chain (6-Month Market for FIL and 3 and 6 month for USDFC)

1.3 Analysis of Itayose Results

Ethereum:
ETH fell by 62 bps, settling at 7.23%. USDC, WBTC, and axlFIL remained unchanged.
Arbitrum:
USDC (+73 bps to 8.49%) and ETH (+61 bps to 7.23%) both rose, signaling active demand in the 2-year space.
Filecoin (6-Month):
FIL dropped 454 bps from 15.10% to 10.56%.
USDFC 3-month and 6-month debuted at 8.19% and 9.45% respectively, offering a new stablecoin-driven option on FVM.

Arbitrum USDC Yield Curve and Mar2027 Orderbook

2. Auto-Rolling Report

2.1 Overview

Auto-Rolled Contract: March 2025 → June 2025
This quarter, any zero-coupon bond (ZC bond) that matured in March 2025 was automatically rolled over into the June 2025 market. Essentially, if you were holding a ZC bond set to expire on March 27th, your position seamlessly transitioned to a new 3-month bond maturing on June 27th.
What Is Auto-Rolling?
Auto-Rolling is a mechanism that automatically reinvests your expiring ZC bond positions into the next available 3-month tenor at a fair mid-price. This removes the need to manually close your maturing position and open a new one each quarter.

New Interest Rate: After auto-roll, your ZC now earns interest according to the table below — e.g., if the new APR is 7.14%, that’s what your rolled position earns until June 27.

For a full breakdown of Auto-Roll’s underlying logic — including how we handle illiquid markets, fallback pricing, and more — see our Auto-Roll feature article on Medium.

2.2 Auto-Roll APR Results

Ethereum Chain

Arbitrum Chain

Filecoin Chain

2.3 Analysis of Auto-Roll Results

Ethereum:
USDC fell by 104 bps, ETH by 121 bps, and WBTC by 426 bps. axlFIL remains relatively high (14.55%) despite a 216 bps drop.
Arbitrum:
USDC surged by 266 bps to 11.89%. ETH rose by 125 bps to 8.19%. WBTC dipped 165 bps to 4.46%.
Filecoin:
FIL declined by 529 bps, settling at 8.19%. This echoes the Itayose trend of diminishing FIL rates in the 6-month horizon.

3. Observations & Recommendations

2-Year vs. 6-Month Durations:

Ethereum & Arbitrum: Observing stable or rising APRs in Itayose, with varied Auto-Roll results.
Filecoin: FIL saw significant rate drops, while USDFC launched at 9.45%.

Arbitrum’s Momentum:

Both Itayose and Auto-Roll show upward APRs for USDC and ETH, making it a potential hotspot for lenders.

Risk & Liquidity Considerations:

Rapid changes in FIL rates and the introduction of USDFC suggest evolving liquidity dynamics on FVM.
Participants are advised to monitor order book depth, chain fees, and maturity lengths to balance returns and volatility.

4. Currency Category Updates

Secured Finance assigns assets into A–F categories to inform minimum base prices and manage risk:

USDFC is newly placed in Category C.
No other category changes this quarter.

This ensures that the new FIL-backed stablecoin aligns with mid-range risk/interest brackets.

Conclusion

Q1 2025 saw:

Itayose: Slight APR gains on Arbitrum, mostly stable outcomes on Ethereum, and a marked drop for FIL on the 6-month FVM market, offset by USDFC’s 9.45% debut.
Auto-Roll: Ethereum rates generally declined, Arbitrum’s stablecoin and ETH soared, and FIL continued its downward trend.
Filecoin’s Evolving Landscape: USDFC adds a new stablecoin dimension at 9.45% APR for 6-month, while FIL experiences volatility.

As always, users should consider how liquidity, chain fees, and time horizons may affect their strategies. We appreciate the ~100 accounts that participated this quarter and look forward to seeing the DeFi fixed-income market evolve further in the coming months.

References