Hey folks, it’s pretty clear that Real World Assets (RWAs) are going to be one of the next cycle’s most prominent narratives, and in today’s article, I’m going to be doing a bit of a deep dive into the recent introduction of $mUSD (Mantle USD) how it may prove to be one of the most efficient ways in order for people to take part.
But before we get into $mUSD, we have to talk about $USDY…
What is $USDY?
$USDY is Ondo Finance’s overcollateralized native stablecoin which is completely backed by short-term US Treasuries and bank demand deposits, currently by approximately 3%. Due to relatively high U.S. Treasury interest rates, $USDY is able to offer roughly around 5% APY in yield, where Ondo automatically compounds these gains allowing $USDY to be minted/redeemed every day.
Ondo has incorporated third-party oversight via Ankura Trust, which will provide “daily transparency reports that showcase a detailed asset performance of the issuer,” an oversight that many other stablecoins, especially like $USDT lack.
What is $mUSD?
$mUSD is essentially the wrapped version of $USDY, which automatically gives the holder rebasements in yield with the interest you would earn if you were holding a U.S. Treasury Bill yourself. There are two primary key advantages for holding $mUSD rather than a U.S. Treasury Bill yourself which includes:
- With $mUSD you earn the yield daily and you don’t have to realize your gains once the U.S. Treasury Bill matures
- For you privacy junkies out there, holding/obtaining $mUSD doesn’t require any KYC, and is accessible through DeFi apps like Swapsicle, which we’ll talk to about next.
What is Swapsicle?
I’ve written about Swapsicle in the past, but with its integration of the extremely efficient Algebra’s concentrated liquidity tech stack and now $mUSD, it comes to no surprise why TVL is continuing to explode on Swapsicle’s V2, as you’re currently able to earn triple-digit APRs by farming $mUSD through their USDC-mUSD Pool :
Considering that $USDC is also mostly backed by short term U.S. Treasury bills as well, earning triple-digit APRs seems like a pretty easy play to make some massive returns with very little impermanent loss.
Other Things to Consider using Swapsicle:
High Rates usually aren’t sustainable: As I usually try to highlight when I talk about any high-APR play, high rates generally aren’t (or at least shouldn’t be) sustainable for long. If Swapsicle’s USDC-mUSD TVL rises significantly, conversely the rewards will probably decrease significantly as well unless there’s a higher utilization of the farm itself. In other words, with all other factors remaining constant, the larger the LP, the smaller slice of the reward pie each one gets.
Exposure to $SLUSH: It’s also important to note that all of Swapsicle’s farms will give you exposure to $SLUSH, Swapsicle’s native altcoin. Being exposed to any smaller marketcap coin means that you’ll be subjected to potential high volatility, but in $SLUSH’s case it’s been on a bit of a tear:
Conclusion
I’ve been burned significantly into other RWA-bets that I’ve made in the past, most notably with Tangible’s $USDR, so I’m still a bit hesitant about aping any large amounts into something that hasn’t been fully stress-tested. But given that USDY has so many key-name players (Pantera, Coinbase, Tiger Global, etc.), it does give a bit more credence to what $USDY and $mUSD are bringing to the table.
If you’re interested in reading more about $USDY and how it works, I highly recommend that you check out Ondo’s docs to read more about the mechanics work. Also, if you’re interested in more stablecoin pools with triple-digit returns, I highly recommend you check out my previous article on Swapsicle to see some of the different lucrative strategies that Swapsicle has to offer.
And as always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates. Also, looking for a gift for your Crypto-loving/hating friend? Give them a REKT journal to cheer them up!
Disclaimer: This is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!
