Polygon community weighs proposal to deploy over $1 billion in stablecoin on its bridge for yield generation
Quick Take The Polygon community is evaluating a proposal to utilize over $1 billion in stablecoin reserves held on the PoS Chain bridge to generate yield. The proposal was pitched by Web3 risk provider Allez Labs in conjunction with DeFi protocols Morpho and Yearn, aiming to gather community input. The idle reserves currently represent an opportunity cost of around $70 million annually, the proposal claimed.
The Polygon community is discussing a proposal to generate a yield from over $1 billion held on the PoS Chain bridge — the canonical bridge connecting the network with Ethereum.
Web3 risk provider Allez Labs, along with DeFi protocols Morpho and Yearn, wrote a Pre-Polygon Improvement Proposal seeking input from the Polygon community on deploying about $1.3 billion in stablecoin reserves (DAI, USDC and USDT) from the Polygon PoS Bridge.
The proposal claimed that these funds represent an opportunity cost of around $70 million annually due to the idle $1.3 billion stablecoin reserve.
It aims to use these funds to incentivize additional activity on Polygon PoS and within the broader AggLayer.
The stablecoin reserves would be gradually deployed into ERC-4626 vaults specific to each asset type.
DAI reserves were proposed to be held in Maker’s sUSDS vault, while USDC and USDT would utilize Morpho Vaults as the primary source of yield. These vaults would be risk-managed by Allez, according to the proposal.
The proposal is set to be discussed through the community forums and the Polygon’s specialized Protocol Governance Council.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
CleanSpark reports $162.3 million in quarterly revenue: 'Why buy bitcoin at current prices when we can mine it for $34,000?'
CleanSpark generated revenue of $162.3 million in the fourth quarter of 2024, up 120% year-over-year.The Bitcoin miner reported net income of $246.8 million and adjusted EBITDA of $321.6 million for Q4 — also up significantly from the same period in 2023.
Bitcoin price seasonality data calls for $120K in Q1, but leverage remains BTC’s ‘biggest risk’
Bitcoin’s historical price data favors new all-time highs in Q1, but liquidity gaps below $80,000 could pull the price lower in the short term.
Utah Advances Digital Asset Reserve Plan as Bill Moves to Senate
Utah’s HB 230 moves forward, paving the way for digital asset investment. While some see it as a step toward a Bitcoin reserve, critics argue it favors stablecoins. The Senate will decide its final direction.
Cardano May Be Set for a Parabolic Rally, Is It Time to Buy?