So let me preface once again this is not financial advice, and I am not a financial advisor. As always, do your own research and figure out what investments are best for you.
31% on Stable coins?
So I first heard this on the Terra Bites podcast, but at that point they were advertising a a 70% APY return, not a 31%. And doing a bit more digging, it did use to be 70%...then around 40%...and now 31%. So just a disclaimer that this 31% may not last either. But if you're a terra fan like I am, you'd have to agree that 31% is pretty damn good, even if it does come with some risks (which I'll get to in a bit). You can find this deal on spectrum finance.
Spectrum, has been audited by Halborn a few months, and for the most part, the reports came out pretty good.
bPsiDP-24m? Yes they should have picked a better name
It might seem a bit confusing at first, because it has a really confusing name, bPsiDP-24m. Based on the name, I initially thought that your crypto would be locked up for 24 months, but this is NOT the case--you can essentially choose to withdraw at any time. bPsiDP-24m is essentially what you can swap your UST for, and at the end of the vesting term, they state that your bPsiDP-24m can be swapped back out to UST 1:1. They essentially take your UST and through the anchor and pylon (Psi) are able to generate the better returns. You'll also notice that right now, they have a crossed out 27% and in maroon (or whatever the hell that color is) and instead they have 30.91%:
My understanding is that extra bump is from earning extra SPEC on top of the bPsiDP-24m that you'll accrue. One of the cool features about Spectrum is that you can buy into any of their vaults or liquidity pools with just UST--they'll swap everything out for you. Also, you can choose if you want to auto-compound your interest earnings, and you can even choose "mixed" to do a half-and-half.
Risks and fees
So a couple things to note is that they do have fees, but they all make sense to me, and nothing that seems to be egregious:
A portion to stakers, to the platform, and the rest it sounds like to cover gas. From what I've read, it sounds like they recently restructured some of these fees to the benefit of the stakers. But the fees should be considered into doing the math before making an investment.
Also, I noticed buying in that the rate for UST to bPsiDP-24m isn't one-to-one, and this was definitely my biggest concern. Over the past day, I've seen it fluctuate between 1:1.02 to 1:1.05, UST to bPsiDP-24m respectively. That's pretty crappy if it's supposed to be a peg, but because it was 1:1.04 instead of 1.04:1 I figured that it was worth the gamble. And as I mentioned before, supposedly at the end of 24 months (which I believe is either October or November 2023), you'll be able to exchange your bPsiDP-24m to UST 1:1, that is if you decide to hold it for that long. This is a risk that you'll also have with UST itself, because as we have seen in the past, things can definitely go awry and depeg. And even though bPsiDP-24 bases itself off UST, as this is a brand new product, I don't believe any insurance is going to cover it if it depegs.
So what's the verdict?
So based on the risks I haven't moved my entire anchor position, but I'll definitely invest some of my UST as long as the bPsiDP-24m can continue to produce these solid returns, especially since I'm a bit skittish with the market going through a wash cycle. I also like the fact that you can deposit/withdraw whenever you like, which you can't do with the UST-Degebox strategy on Abracadabra. Were you able to get in when this was at 70%? Are there any other vaults that you bought into?
