August 2 2021 BSC & Polygon Stablecoin Defi Rates
Stablecoin rates are consistent over the last week. News about upcoming stablecoin regulations and reporting requirements.
Disclaimer
This isn’t investment advice, I am not an expert. Any risk analysis is how I understand the risks and may be wildly inaccurate. As always, do your own research before investing in any projects.
Weekly Summary
In the last week stablecoin defi APY’s have stayed pretty consistent for most pools that I track. I have also seen TVL’s continue to decrease (“Total Value Locked” is the amount of money held in a liquidity pool). Decreasing TVL’s mean that farming yields are distributed to a smaller share of holders, so higher rewards.
Bitcoin is up +10.1% in the last week, Ethereum +18.2%, BNB +8.0%, and MATIC +11.4%. The current crypto price rally has been ongoing for about two weeks but has started to lose its steam in the past few days.
Politicians and regulators in the United States continue to focus on new taxes and rules for cryptocurrency. A new bill was introduced that proposes various new regulations on crypto, one interested part of the bill says that “no person may issue, use, or permit to be used a digital asset fiat-based stablecoin that is not approved by the Secretary of the Treasury under subsection”. It isn’t clear if this bill has any support yet. The United States is also close to passing an infrastructure bill that has cryptocurrency transaction reporting requirements added onto it.
The good news is that over the last week there were no major hacks or issues with Defi platforms.
Rates
37.23% APY - (Polygon) MAI-USDC Quickswap-LP Staked on Beefy
$5.81m TVL on Beefy ($120m held in the LP itself)
Pool Risk: Medium-High (Maker-like protocol, audited by Bramah Systems)
Farm Risk: Medium (Beefy autocompounding on top of Mai Masterchef)
Asset Risk: Medium-High (Mai risk)
The TVL (Total Value Locked - the amount held in the liquidity pool) of the MAI-USDC LP is almost unchanged in the last week, only about $400k has been withdrawn. The APY is up 4.5% from last week’s 32.7%. MAI (also called MiMatic) is a stablecoin like DAI, but exclusive to Polygon. Created by Mai Finance, MAI allows users to vault their MATIC and borrow MAI against it. A somewhat unique feature about Mai Finance is that they have a 0% interest rate when you borrow against your holdings and create MAI.
I have noticed that the price of MAI seems to bounce around a bit, so my own internally calculated APY has not been as high as Beefy’s stated rate, mostly because I got my MAI at around $1.01 and the price has stabilized closer to $1.00. As of this post, I can trade 1,000 MAI for 999.44 USDC. I am still happy about my holdings in this LP and plan to continue holding it while the rate is still juicy. Like I mentioned previously, if you are looking for even more rate, you can use the “DinoSwap” vault on Beefy for MAI-USDC instead of the Mai vault. This will park the funds in DinoSwap’s farm instead of Mai Finance’s farm. I do not know much about DinoSwap yet so I have kept my funds at Mai. As of the time of this post, the DinoSwap farm is paying out about 1% APY more than Mai’s farm.
19.7% APY - (BSC) UST-BUSD-USDT-DAI-USDC AcryptoS-LP Staked on AcryptoS
$2.57m TVL in AcryptoS farm
Pool Risk: Very Low (Curve StableSwap clone)
Farm Risk: Medium-Low (Masterchef clone with rewards boost code added)
Asset Risk: Medium (UST algorithmic risk, partially mitigated by multi-asset pool)
The AcryptoS UST is about the same as last week, with only $60k added to the TVL. The APY is down about 0.9% from last week’s 20.6%. Although the APY is down a tiny bit, I am still happy to see it somewhat stabilize in this range because it was down in the 13-14% for a few of the weeks this last month. I have previously mentioned that you may want to consider Dopple’s UST 3pool instead of this 5pool, but as of now this is paying out about 1% more APY than Dopple is (18.75% APY).
Risks here are mostly UST risk, but the pool diversifies with 4 additional coins (although the target is to have UST half of the pool). UST has historically had a very strong peg to the dollar, with a few days that broke the peg down to around $0.94 with a pretty quick recovery after. UST is currently 42.7% of the pool, which means UST is quite strong at the moment and has a higher value than the average value of BUSD-USDT-DAI-USDC. If you are part of this pool, watch for times when UST is over 60% of the pool, as that can be a warning of coming trouble.
19.53% APY - (BSC) Dolly-BUSD-USDT Dopple-LP Staked on Beefy
$4.71m TVL on Beefy ($7.25m held in the LP itself)
Pool Risk: Medium-Low (Curve StableSwap copycat - audited by Certik)
Farm Risk: Medium (Beefy autocompounding on top of Dopple Masterchef)
Asset Risk: Medium (Dolly risk, partially mitigated by multi-asset pool)
Over the last week, total investment in this LP has decreased by about $2m and the APY has gone up by about 0.26%. Currently this LP is one of the top place to park your stablecoins on BSC (its main competition is the other 4Belt pool on Beefy (20.95% APY), but I have never considered that a viable investment after it was hacked a few months ago). I plan on continuing to hold on to this LP until there is a reason not to.
17.69% APY **New to My List** - (Polygon) USDC-DAI-MAI-USDT Staked on Balancer
$35.15m TVL on Balancer
Pool Risk: Low (Balancer)
Farm Risk: Low (Balancer’s farm)
Asset Risk: Medium-Low (Mostly MAI and USDT risk)
Last week in reply to my post on Reddit, someone pointed out that I was missing out some opportunity on Balancer Polygon. Balancer itself has been around for a while on Ethereum and has a great reputation. Recently Balancer expanded onto Polygon, and so I am including their top stablecoin pool. Balancer is a platform that is meant to create LP’s that act as a sort of index fund with assets that aren’t similar held by the LP. For example the 2nd top LP on Balancer Polygon is MATIC-USDC-ETH-BAL. The LP code holds a certain percent composition of each asset, and allows for heterogenious asset pools. But, that doesn’t mean they can’t have a good old fashioned stablecoin pool as well!
My only hesitation for this pool is MAI, well I guess USDT as well. I want to keep my MAI exposure in the MAI-USDC LP I hold, so this throws my plans off a bit and limits how much I am willing to invest here.
17.06% APY - (BSC) BUSD-USDT BiSwap-LP Staked on BiSwap
$23.3m TVL on BiSwap
Pool Risk: Medium-Low (Modified UniswapV2 LP - audited by Certik)
Farm Risk: High (Modified Masterchef - audited by Certik, Migrator code with short timelock)
Asset Risk: Low (Mostly USDT risk and Binance-pegged asset risk)
This LP’s TVL almost unchanged since last week, but the APY is up about 3.4%. In a previous post I outlined some issues with the timelock contract at BiSwap that gives me some concern. I really wish BiSwap would put a normal timelock on their masterchef so that I could throw some money in and not have to worry about them running off with it. For now I will only keep a very small amount of money parked at BiSwap.
15.65% APY - (Polygon) DAI-USDC-USDT CURVE-LP Staked on autofarm
$13.8m TVL on autofarm ($337m held in the Curve LP itself)
Pool Risk: Very Low (Curve StableSwap)
Farm Risk: Medium-Low (Autocompounding on top of Curve’s Gauge farm)
Asset Risk: Low (Aave wrapped USDT, USDC, DAI)
Just a reminder that for this LP I have I have transferred my holdings of this LP from Beefy to autofarm. Autofarm has consistently been paying a better rate than Beefy. Both autofarm and Beefy have no deposit or withdrawal fees on this LP, so it is relatively harmless to switch from one to the other.
The rate of the LP is coming down from last week’s 18.24%. The amount invested in the LP is down about $7.1m, which gives me a bigger share of the pie. As money continues to leave this Curve pool, LP holders see increased rates because they will get a larger portion of the payouts and trading fees.
13.72% APY - (Polygon) USDC-USDT-DAI IronSwap-LP Staked on Beefy
$13.8m TVL on Beefy ($525m held in the LP itself)
Pool Risk: High (StableSwap on Solidity, Dopple clone? No audit)
Farm Risk: High (Beefy autocompounding on top of Iron Masterchef, no audit)
Asset Risk: High (Who knows what the Iron team is up to…)
Not surprisingly, this LP has continued to lose its sparkle since I originally posted about it when it was at 608% APY. Almost $225m has been removed from the liquidity pool since last week’s post. With a rate that isn’t all that competitive, and no audits yet, I don’t see any reason to keep any money in this liquidity pool. If the rate doesn’t bounce up by next week, I will likely stop posting about this one.
Other Posts:
Last Week’s Post
Looking At Iron Finance’s Failures (6/19/2021)
The Return of Iron Finance (7/12/2021)