Financial Report - 2021-07

The financial report for July 2021 is available here.

Summary

Another challenging month as lower appetite for credit and decreased stability fees led to lower lending demand and income. PSM income was down 78% and net recurring income was down 55% month over month. On a year over year basis, all key metrics are up significantly with recurring income up 94x.

  • Recurring income decreased to 3.2M (-55% vs last month)
  • DAI was never so safe. We are now above 2.79% in CET1 ratio (risk-weighted assets leverage ratio).
  • The peg is super safe as we have 64% of our assets as liquidity reserves (fiat-backed stablecoins)
  • USDC exposure has increased to 62% which is probably too much on a single counterparty (see here for our view on it).

Selected slides

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I think that, without a doubt, a portfolio that does not have MKR as an asset is very bad.

With such exponential growth of the protocol, it just makes me think that it is at a super low price.

MKR to the moon :new_moon: :new_moon: :rocket: :rocket:

Could be the summer blues? Folks on vacay and Ethcc probably slow things down. Any suggestions from the RWF CU on how this metric can be improved in Q3?

Also, any projections on the revenue stream from the upcoming Paxos PSM? Maybe it was posted and I missed it ( if so, apologies in advance)

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We cut rates very aggressively. Revenues have been flat since then.

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As Paper mentioned the rate cut and lower demand for credit really drove our lower recurring income. We have a number of opportunities to increase this metric in the near term (posting from my budget simulator thread):

  • Over $3.2B USDC in the PSM that could be invested to earn interest
  • Scaling Real World Assets (NS-DROP $5M DC → $20M, SolarX $21M, 6S $15M, Treasuries), etc.
  • Investing in DAI Derivatives (i.e. D3M)
  • Leveraged G-UNI Vault
  • Flash Mint Module
  • Institutional vaults, SushiLPs, CropJoin

Tough to forecast what the revenue from the Paxos PSM could be - depends on what the tin is set at, the volatility in the crypto market, and what the USDC tin is set at, among other factors. Could boost our trading revenue for sure but the benefits are more realized from diversifying our counterparty risk.

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