Stable Coin Experiment

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Humanofearth
Posts: 188
Joined: Sun Mar 28, 2021 3:32 am

Re: Stable Coin Experiment

Post by Humanofearth »

On risk. I’ve been researching more and it appears UST is higher risk than USDC, BUSD, DAI, or FRAX. I haven’t actually found a pool offering the 20% yield exclusively from the assets just listed.

So I researched and here are some findings, format is Chain as header/ Dex: pair interest rate, thoughts & interest rate
BSC
Pancake swap: DAI-BUSD 8%, low risk coins, low risk dex could be comfortable with
Apeswap: FRAX-BUSD 16.6%, low-med risk coins, high risk dex
AVAX
Trader Joe: FRAX-AVAX, high impermanent loss on pairs like this 12.16%
Pangolin: FRAX-AVAX 15% Same pair but a newer, higher risk dex, often being paid out in a different coin that isn’t the stable coin you seek increases yield. Higher risk, higher reward, not a stable pair but wanted to illustrate a point
Trader Joe: USDC.e-UST 24.8%, higher than Anchor protocol, but adding another 2 layers of risk by being on another chain and another dex
Trader Joe: USDC-USDC.e 7% (6% from USDC, 1.1% from JOE)
CRV DAI/USDC/USDT 11.76%, more comfortable with this pair and exchange
MagicLand: USDC/USDT/MIM 17%, unused by me and could be a ponzi rugged by the time you read this. The latter 2 are a no for me, I’d prefer UST.
FTM
Hundred Finance Stake DAI .48% APY, 8-20% paid out as local governance coin
Loan USDC at 5.5%, Borrow FRAX at 1.4%
ETH had lower rates and obviously, higher gas fees than non-crypto people can imagine
CRV DAI/USDC/USDT 1.4%, way too low, especially given the huge gas
1inch USDC-USDT 1.6%

Given all the info, I like UST for some position and AVAX followed by BSC seemed to have the pairs I liked most giving the best rates, if I was trying to be very comfortable and stable up, I’d go the tripool on AVAX’s Trader Joe and the DAI-BUSD pool on Binance’s Pancake Swap.

*Some terminology:
Main stable coins listed above, rated by likelihood to maintain peg:
USDC= Clownbase’s version, freezable, backed
BUSD = Binance’s stable coin, backed
DAI = Maker’s algorithmic stable coin 150 collateral = ETH
USDT= Tether, freezable, centralized, likely backed
FRAX = Algorithmic-backed mix, decentralized, FXS’s version
UST=Terra Luna version, algorithmic stable coin collateral = LUNA
MIM = Abracadabra’s algorithmic stable coin
Algorithmic means the coin is backed by another crypto (not dollars), that are sold to keep the value of the stable pegged to a dollar, some coins are better at this than others (DAI>FRAX>UST at first glance). These are more decentralized (unfreezable, lower regulation risk) than their backed, often centralized counterparts.

Chains
AVAX = L2 execution, strong EVM (ethereum virtual machine)
BSC = Binance’s L2 execution

ABC-XYZ LP = liquidity pair provided to a liquidity pool, you provide 2 coins to be traded against eachother and collect a % of each trade. Because both coins likely maintain a stable value, there is no impermanent loss, but if the coins are volatile against eachother, arbitragers come to buy the coin that increases in value relative to the other or vice versa and you’ll end up with less of the coin that increased in value, so you’ll have done less well than simply holding the coin assuming no apy.
Tri Pool = same concept as LP but you allow any 2 of 3 coins to be traded against eachother.

Not investment advice, purely educational. I am not endorsing any of these but I have some UST. Most of my investment income at this moment comes from staking and farming volatile coins such as ATOM, JEWEL, AVAX, ETH, JUNO, OSMO, and POKT. I have decreased LUNA exposure to 1.4% since starting this thread. All investments are subject to change with no notice.

Humanofearth
Posts: 188
Joined: Sun Mar 28, 2021 3:32 am

Re: Stable Coin Experiment

Post by Humanofearth »

291.

Exited lots of the coins from the prior post, focusing on btc long term and eth till the merge gets officially announced.

UST is in the process of being backed by btc, in addition to Luna. But this is an experiment. Everything, literally, is a ponzi (including stocks, real estate, treasuries, and gold-all mimetic ponzis where price increases comes from new participants or have cash returns in the biggest ponzi called fiat) so beware.

white belt
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Joined: Sat May 21, 2011 12:15 am

Re: Stable Coin Experiment

Post by white belt »

Looks like we are back to questioning the “stable” in stable coins: https://www.thestreet.com/crypto/news/s ... y-in-value

WFJ
Posts: 416
Joined: Sat Apr 24, 2021 11:32 am

Re: Stable Coin Experiment

Post by WFJ »

Please report the results of this "Experiment".

When will ERE "stable coins" be available?

Humanofearth
Posts: 188
Joined: Sun Mar 28, 2021 3:32 am

Re: Stable Coin Experiment

Post by Humanofearth »

UST lost its peg. Google citadel blackrock ust to see the mechanics of the attack. The market cap of a coin is a measure of its security as it acts as a bounty that if anyone can hack, they can drain.

Experiment failed. Back to btc & eth in this case. Not trusting any farms or interest bearing coins as worth the yield anymore. Literally holding usdc or dai on optimism/arbitrum on a Ledger, Bitbox, or Grid for stables.

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Jean
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Location: Switzterland

Re: Stable Coin Experiment

Post by Jean »

why bother with stables? they all seem dodgy in their own way. Doesn't your time frame allows you to stick to btc?

Humanofearth
Posts: 188
Joined: Sun Mar 28, 2021 3:32 am

Re: Stable Coin Experiment

Post by Humanofearth »

Taking profits during peak euphoria to buy at times like this would’ve multiplied my returns in btc and usd terms. Thanks to many bad mistakes I’m learning from, Ive lost massively against the usd and slightly against btc since the November peak. Not taking profits is one of those mistakes. Cash during crashes is more valuable than I accounted for.

fingeek
Posts: 249
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Location: Wales

Re: Stable Coin Experiment

Post by fingeek »

This is a similar crash to that of 2018. Many good (painful) lessons learnt - One being exactly: take profits, even if you think a token has a lot more upside. I got into the habit of taking 1/2 profit at 2x (which in real world terms is madness, but in crypto is easy to think "oh it's got 5x more"). Hope you take these learnings positively and build upon it for the next bullish period (if/when there is one)

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giskard
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Joined: Sat Apr 30, 2016 12:07 pm

Re: Stable Coin Experiment

Post by giskard »

Which thread should we discuss the UST disaster in? There are three going right now.

For what it's worth there is something specially broken about UST that caused it go into a death spiral here is the comparision:

- DAI - over collateralized backing with crypto on chain, actually has (had) a tendency to go over the $1 peg due to this
- USDC - fully collateralized & regulated by trusted banking partners
- USDT (tether) - "fully collateralized" by somewhat sketchy banking partners
- UST (terra) - back algorithmically by the price of LUNA and the Luna Guard Fund (additionally fractionally collateralized to a bitcoin reserve).

These models are not even in the same zipcode as each other. There are many other smaller fully collateralized models as well such as GUSD, TrueUSD, etc. They are not typically the ones to worry about. Terra USD was ALWAYS the type of stable you worry about because it's fractionally collaterlized and ultimately backed by something with no backing (a token that is based on confidence and network effects).

Arthur Hayes, the founder of Bitmex wrote a nice article about different kind of stables and why people keep trying to make these fractionally reserved types
https://medium.com/entrepreneur-s-handb ... 2ec5abe199

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Ego
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Re: Stable Coin Experiment

Post by Ego »

Ego wrote:
Mon Jan 10, 2022 8:28 pm

Image
Okay, so my 85UST grew to 103.008UST in four months. Here is my current balance on Anchor. Hah!

Image

There are whispers of an attempt to make the small fish whole (99% of the anchor wallets) and leaving the losses to the wales by using the reserve that may or may not have disappeared. Not holding my breath. It was a good learning experience.

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