We're happy to provide our ninth 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
Market performance has been mostly flat over January with BTC ranging between $21.5k and $25k but the January rally was put on pause. Risk asset investors seem to be wary of higher than expected rate raises by central banks fighting persistent inflation. Brian Armstrong, Coinbases’s CEO, said in an earnings call that the current market sentiment is “despair” which we assume to be slightly better than abject hopelessness. So, progress at least.
The SEC and the NYDSF also targeted Paxos, and indirectly Binance, by planning to sue Paxos for violating investor protections laws because they contend that the minting, burning and maintaining of BUSD is also an unregistered security. This seems to be quite a stretch and would have large implications for the stablecoin market if they are established as securities.
February Yield Changes
We re-introduced yield for SHIB in February at 10% which to our knowledge is among the best rates, if not the best, in the market. For stablecoins, we’ve also increased USDD from 4.5% to 8% and UDST from 4.5% to 5%.
We have had to reduce the rates for four other assets:
ADA: Staking rates have fallen
AXS: Increased deposits have reduced the yield generated
BUSD: Rates for BUSD have been persistently low and may be further impacted by the wind down of the Paxos BUSD facility.
MATIC: Liquid staking rates have been under downward pressure since December
DeFi Allocation Increase & Risks
We’ve made no changes to our allocations between Defi and CeDefi/CEX exposure. All current customer assets remain in DeFi protocols/projects or self-custody wallets. Defi remains at risk of protocol and smart contract exploits, as well as more sinister targeted social engineering attacks.
We did not make any significant changes to our allocations in February. Once again, our self-custody percentage fell as we deployed some more assets to Defi.
Our target allocations for customer assets that were initially set in July and updated in November 2022 have not changed:
DeFi protocols: 40-90%
Centralized exchange (CEX): 0-5% (used for temporary asset bridging between networks, i.e. USDC_ETH → USDC_POLY)
Self custody: 5-15%
CeFi platforms: 0%
As of the end of February, our allocations are as follows:
DeFi protocols: 61%
Centralized exchange (CEX): 0%
Self custody: 39%
CeFi platforms: 0%
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