Dear Finbloxers,
We're happy to provide our fifth monthly Transparency Report, which is designed to bring some peace of mind to our users so that they know where their funds are being deployed. The allocations presented below are subject to change depending on strategy performance, future yield projections, and the evolution of the customer deposit mix.
*The report is subject to market changes and numbers shown are a rough estimation
**Target asset allocation is for reference only and subject to change per market conditions and business strategies
Markets
We’ve seen some end of month positive market action in crypto prices but this is unlikely to continue sustainably. Risk assets are still out of favor as the Fed and other central banks around the world continue to raise interest rates. We’ll need to see some evidence of these rate hikes materially impacting inflation before we can expect stabilization of rates.
Core Scientific, a bitcoin mining company, is reportedly close to bankruptcy as energy prices, record high bitcoin hash rates and low bitcoin prices mean miners are losing money. Another signal that the pain in crypto markets is not yet over.
Defi Exploits
Binance Smart Chain bridge was hacked (another bridge hack, yes) for $570mm in BNB tokens and the chain was halted as a result. While BNB prices fell and we have a small amount of assets on the BSC chain, there was no impact on customer assets.
Solana based Mango Markets was exposed to a market structure exploit of their lending mechanism with $114m being removed from the platform. Finblox has a small amount of assets on Solana but there was no impact on customer assets.
October Yield Changes
Stablecoins - We’ve managed to raise our stablecoin rates to inflation fighting levels but market conditions for stablecoins remain difficult and we continue to monitor yields and associated risk factors.
AXS - AXS staking on Ronin had a large reduction in yield in October due to a massive deposit to which reduced yields for all participants.
DOT - Stable customer asset levels has allowed us to dedicate some more assets from self-custody to Polkadot native staking.
MATIC - We’ve had to keep a significant portion of our MATIC in self custody which meant lower yields. We have begun deploying a new strategy that provides more liquidity than native staking and expect to be able to raise rates in November.
Target Allocations
No significant re-allocations have occurred in October but as our mix of customer assets change and where they are deployed has meant an uptick in exposure to CEXs, of which we have added another top tier player to our available top tier exchange partners. As we are above target for CEXs, we’ll be deploying some assets there to Defi.
Our target allocations from July remain unchanged and are as follows:
DeFi protocols: 40-65%
Centralized exchange (CEX): 25-50%
Self custody: 5-15%
CeFi platforms: 0%
As of the end of October, our allocations are as follows:
DeFi protocols: 44.9%
Centralized exchange (CEX): 52.2%
Self custody: 2.9%
CeFi platforms: 0%
We have more exciting plans for November so stay tuned.
We believe in providing transparency to our users on the company's activities and aim to increase our users’ view of where their coins and tokens are and how they are performing. As always, we'd love to hear more feedback about the types of info you want.
All the best,
The Finblox Team