sAVAX: the health of Avalanche

Let's examine the $sAVAX supply - $AVAX borrow loop on @AaveAave.

I have yields to collect. Great!

Or is it?

The δδ value (change in net APR) shows I'm bleeding 1 $AVAX per day. Net. 

Worse: the yield comes once a week, not once a day.

The $sAVAX factor no longer gains against $AVAX borrow rate.

What is the $sAVAX factor? It is a measure of yield-returns being compounded into the underlying staked $AVAX.

A sluggish factor means less yield-returns, which means less fees collected, which means fewer transaction.

The $sAVAX factor is a barometer of the health of Avalanche.

"But, the el geophf!" you exclaim, "what about those spikes?"

Those are when I reinvested @AaveAave yields.

"Don't they make up for the $sAVAX factor losses?"

They do, and more than make up for the losses, there's a problem with these reinvested yields: they are incentivized.

"What's the problem with incentivized yields?" you may ask.

@AaveAave can, AND HAS, removed incentives.

More than that: what is there to incentivize?

Avalanche: what protocols are thriving, growing, and producing 24h-volumes? Please name me a few.

I see the opposite of development:

I see silence. I see stagnation.

Are there working protocols on Avalanche? Yes.

Are there protocols under active development, bringing in volume? Not that I see.

And not that the $sAVAX factor is showing: the barometer is flatlining.

The $sAVAX supply - $AVAX borrow loop is not working for me anymore.

Consequently, I am closing my positions on @AaveAave, withdrawing my liquidity from this protocol and parking it on @BenqiFinance that IS paying (incentivized) yields that cover borrow rates, for now.

I am

SAD

to take this action. I was supposed to retire on this yield-generating machine.

The simple fact is that yields are not being generated. Quite the opposite: principle is being eroded. Daily.

I'm staunching the flow of blood before this wound becomes fatal.

I 

• withdraw $sAVAX

• swap to $AVAX on @KyberNetwork 

• repay borrow on @AaveAave 

• lather, rinse, repeat

looping my way out of the $sAVAX - $AVAX loop, listening to Pink Floyd as I do so.

At the end of the day, I'm walking away with 958.99 $sAVAX and 0.92 $WAVAX yield (~0.87 $sAVAX).

@AaveAave $sAVAX loop Close-out

close date: 2023-01-08

remain: 958.99 $sAVAX

yield: 0.92 $WAVAX or 0.86802092 $sAVAX

ROI: 6.30%

APR: 41.79%

That's a REALLY GOOD investment.