We're happy to provide our tenth 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
The icy fingers of 2022 seem intent on keeping its grip on the 2023 crypto market. The bank run on Silvergate, SVB and subsequent follow on effects on several mid-size US banks, including crypto friendly Signature Bank, caused panic in the market. The primary impact has been on USDC (but also DAI, which was significantly backed by USDC). The weekend’s market-based de-peg reached 87 cents on the dollar, but no USDC redemptions ended up below par the following Monday. Interestingly, Bitcoin has rallied since; the potential result of now somewhat risky stablecoins being converted to Bitcoin or a lack of confidence in TradFi banking. Unfortunately, this all seems like a step backwards for crypto as off-ramps, at least for USD, have fallen.
DeFi protocol Euler Finance was hacked for nearly $200mm in a flash loan attack. These types of attacks remain the most significant risk to Defi users. Finblox can’t eliminate this risk but by diversifying across protocols, we reduce our exposure to any single one while also targeting larger TVL opportunities for each coin where possible.
Finblox had no exposure to Euler at the time of the exploit.
March Yield Changes
We’ve updated our rates once at the end of March and the following assets are changing:
USDT/DAI: These two stablecoins were both raised by 0.5% with USDT and USDC now at parity. DAI lags slightly behind as it generally yields less than its larger, more centralized stablecoin siblings.
APE: The APE staking program reduces its release rate every 3 months and this occurred in March. Additionally, the release by the staking program is in fixed APE amounts, so as more assets are staked, this also brings down rates.
ETH: Staking yields have been under pressure the last month and we’ve had to reduce rates in accordance.
AXS: This asset has been quite stable but over time, the rates available is on a slightly downward trend.
DeFi Allocation Increase & Risks
We’ve made no material 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.
We did not make any significant changes to our allocations in March. Our percentage of assets dedicated to Defi dropped over March partly due to the outperformance of Bitcoin, which is not in Defi protocols. We have yet to find opportunities that yield more than a few basis points for BTC and don’t believe this rate is worth the risk of deployment.
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 and vice versa)
Self custody: 5-15%
CeFi platforms: 0%
As of the end of March, our allocations are as follows:
DeFi protocols: 57%
Centralized exchange (CEX): 0%
Self custody: 43%
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