July 19 2021 BSC & Polygon Stablecoin Defi Rates
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 dipped by about 1-5% depending on the pool. Most of the pools I track have seen their TVL’s decrease, although MAI-USDC saw a respectable boost in TVL since last week. There are still quite a few pools out there with great APY’s and a decent risk profile.
Bitcoin is down -9.8% in the last week, Ethereum -14.8%, BNB -12%, and MATIC -29%. Much of the decline in volatile cryptocurrencies is due to a the traditional markets seeing investors trade out of risk assets and into safe havens.
Today, the U.S. Treasury Department announced that they plan to issue recommendations for stable coin regulations sometime within the next few months. Many people speculate that USDT will struggle to comply with regulations. I prefer to minimize my exposure to USDT, but at times it is hard to avoid.
In the last week, we saw a couple defi hacks/exploits, none of which were on protocols or pools that I track in these posts. PancakeBunny was hacked for around $2.4m, apparently on the Polygon version of their protocol. We also saw cross chain bridges attacked in the last week, AnySwap had about $7.9m stolen from them and ChainSwap had $4.4m stolen. Defi hacks are a good reminder that money is never completely “safe” and to consider the safety of funds when investing in a specific protocol.
Rates
29.08% APY - (Polygon) MAI-USDC Quickswap-LP Staked on Beefy
$8.86m TVL on Beefy ($131m 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)
This LP has had an additional $36m invested in it over the last week. The APY is down significantly from last week’s 74% APY, which is due to a one week “Boosted” promotion on Beefy that paid additional rewards out to holders. 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. I have done a little bit more research on this since last week, including browsing through their audit. I don’t think the audit is really sufficient for this advanced of a codebase and would love to see them get an additional audit. I plan to keep a small chunk of money in this pool while I continue figuring it out.
24.88% APY - (Polygon) USDC-USDT-DAI IronSwap-LP Staked on Beefy
$19.84m TVL on Beefy ($479m 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 lost most of its steam since last week’s 608% APY. Iron Finance has hired Certik to audit the stableswap LP code, but for some reason gone with a different auditor for their customized masterchef code. I don’t trust Iron Finance all that much, so will keep any investments in this LP minimal until audits are done. I would feel much safer using the MAI LP than this LP, and it is paying out a better APY.
20.36% APY - (BSC) Dolly-BUSD-USDT Dopple-LP Staked on Beefy
$5.17m TVL on Beefy ($9.35m 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 $1.4m and causing the rate is to come up about 1.1% since last week’s post. Currently this LP is the top place to park your stablecoins on BSC (its main competition is the other Dopple UST 3 pool). As I noted over the last few weeks, the APY seems to be stabilizing in the 20% range, which is consistent with other LP’s with similar risk.
13.3% APY - (BSC) UST-BUSD-USDT-DAI-USDC AcryptoS-LP Staked on AcryptoS
$3.03m 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 pool’s TVL is up $120k from last week’s post and the rate is down 1.4% from last week’s 14.7%. I am still watching this pool and hoping to see it get up in the same range that the Dopple pools are. With little difference in risk profile, you can invest in the Dopple UST 3pool for 19.74% 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 been very strong the last few weeks. UST is currently 45.93% of the pool (down from last week), which means UST 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.
13.17% APY - (BSC) BUSD-USDT BiSwap-LP Staked on BiSwap
$22.09m 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 has gone up about $3.85m since last week and which helped push the APY down about 5% from last week’s APY. 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. I noticed that several of the other pairs on BiSwap didn’t get the same boost in TVL, so are still paying out rates around 18%. If you are in this pool, it could make sense to shift to a different pool on BiSwap.
11.41% APY - (Polygon) DAI-USDC-USDT CURVE-LP Staked on Beefy
$14.3m TVL on Beefy ($368m 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)
This LP is the LP that lets me sleep at night. The rate is down about 1.4% since last week and the TVL is down around $25m as well. 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. Both the rate and TVL is down, which happens if the coin being paid out (CRV & MATIC) goes down in value, which did in fact happen this last week. I hold this LP at both Beefy and Autofarm. I am seeing a little bit higher return at Autofarm.