We're happy to provide our twelfth 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 crypto market in May 2023 was largely range-bound, with Bitcoin and Ethereum trading between $27k and $30k and $1.8k and $2.0k, respectively. ETH outperformed BTC, gaining about 5% over the month, while BTC was mostly flat. The high gas fees and net burn of 143k ETH on Ethereum likely accounted for this outperformance. Ordinals on Bitcon also briefly drove high network fees however that revenue accrued to miners.
Memecoins saw a brief resurgence in popularity in May, with Miladys and BOB both gaining significant attention. However, the market is calming down, and it remains to be seen whether memecoins can maintain their popularity over the rest of the year..
There was some positive news out of Hong Kong and China in May. The Hong Kong Securities and Futures Commission announced that it would be accepting applications for retail trading in cryptocurrencies starting in June. In China, there were several positive news stories about blockchain technology, but there was no clear indication what further developments might happen..
Visa announced that it was developing smart contracts on the Ethereum testnet. This could be a major step towards mainstream adoption of cryptocurrencies, as it would allow Visa to process payments using smart contracts and drive simpler crypto.interactions for users.
Tether, the largest stablecoin, announced that it would be putting 15% of its realized profits into Bitcoin. Given interest rates and Tether’s net carry, the size of these purchases over time has potential to be significant..
Aside from any potential technical US government debt default, no major market moving news expected for crypto in June.
We released introductory yields for LADYS (20%), FLOKI (4%) and BOB (1%)
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.
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 May, our allocations are as follows:
DeFi protocols: 57.6%
Centralized exchange (CEX): 0%
Self custody: 42.4%
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