I'm in the process of gradually hedging into stable coins - I find the current yield farming returns for staking appealing and I like the stability this brings to my portfolio.
I've only really just started this process, and I started off by just buying equal amounts of BUSD, USDT and USDC and staking them on autofarm for what was initially a 100% return, but has now reduced to a very reasonable 50%.
I've been digging around looking at different stable coin options trying to find out which is the most secure, or trustworthy, or actually 'stable' if you like!
I think I've hit on the following order of 'trustworthiness' for the five I've looked at...
- DAI - decentrally collateralised with crypto on ETH
- USDC - centrally collateralised with FIAT by Circle and Coinbase
- BUSD - the Binance Coin - so I guess collateralised by Binance's ability to mint billions of dollars worth of Defi tokens
- VAI - Collateralised with crypto on the Binance Smart Chain
- USDT - Maybe actually collateralised after all, but proof still pending!
These are all top 10 Stable Coins by market cap
DAI looks like the best bet to me, given it's 'crypto purity' and the security of the ETH network - and there are a few options available to vault it and pool it for a 20% return. Not bad for a decent coin!
USDC is the complete opposite of DAI - It's centrally controlled, but given the 'public respectability' of Coinbase I can be reasonably certain they'll actually have the money to back this coin in the bank, they are very 'up front' with the authorities when it comes to crypto.
BUSD - Given that hedging into stables partly as a counter to having bought more crazy DEFI tokens on Binance Smart Chain it seems a bit futile to hedge with yet another Binance Product. However, some of the staking returns are good so I will continue to hold some.
VAI - You can mint this on Venus.io and then received a currently 30% return for staking it on the Venus platform - or you can pair it with various tokens on Pancake for a slightly higher return.
Finally USDT - I don't know why I don't trust it - too much historical bad press? But it is on Omni, so it's another chain, spreading the risk out more broadly, so I will carry on holding some.
I think for my ratios I'll look for the following:
- DAI 30%
- USDC - 30%
- BUSD - 15%
- USDT - 15%
- VAI - 10%
I will look to spread out my stablecoin holdings even wider as I find out more about alternatives.
Any ideas about other stables I can hedge into would be great!