Methodology

Benchmark Demo Fund is a USDC-denominated delta neutral fund. Benchmark invests in stablecoins or delta-neutral strategies in Decentralised Finance (DeFi) protocols on Ethereum and its selected EVMs.

Common strategies are lending (e.g. Morpho Blue) and providing liquidity (e.g. Aerodrome).

Investment decisions are based on our research work. We research stablecoins to assess their safety. We also analyze the economic aspects of protocols to gauge the risks. Selected pools are included in the two categories of the weekly:

1. Benchmark: Investments where the TVL is ideally more than $3m, with safe stablecoins as underlyings and the protocols are battle-test to be economically stable.

2. Exotic: Investments where the TVL is ideally more than $1m, with reasonably designed stablecoins as underlyings and the protocols are designed to be economically stable.

Benchmark Demo Fund uses strategies from the Benchmark category of our weekly report, or strategies similar to those (not included as they might be smaller or repetitive). Benchmark seeks to diversify into 10 or more investments to mitigate protocol technical downfalls. A portion (about 10%) of Benchmark's investments will be parked in Aave USDC (Arbitrum) for liquidity purpose, so that holders (not exceeding 10% of the fund) can enter and exit at any time.

The portfolio is updated weekly in the Portfolio section, with detailed transactions and notes documented in a Google Doc.

An example of our weekly (12 Oct 2024 article) is attached below.