- A plan to use more than $1 billion in stablecoin reserves stored on the PoS Chain bridge to produce yield is being considered by the Polygon community.
- Web3 risk provider Allez Labs introduced the concept using the DeFi protocols Morpho and Yearn to gather community input.
- According to the idea, the idle reserves currently represent an opportunity cost of almost $70 million per year.
A plan to produce a return from more than $1 billion held on the PoS Chain bridge, the canonical bridge that connects the network to Ethereum, is being discussed by the Polygon community.
In order to get feedback from the Polygon community on deploying over $1.3 billion in stablecoin reserves (DAI, USDC, and USDT) via the Polygon PoS Bridge, Web3 risk provider Allez Labs, Morpho and Yearn developed a Pre-Polygon Improvement Proposal in cooperation with DeFi protocols.
According to the idea, the idle $1.3 billion stablecoin reserve means that these assets represent an opportunity cost of almost $70 million each year.
These money will be used to encourage more engagement on Polygon PoS and throughout the larger AggLayer.
Each asset type’s ERC-4626 vault would get a phased deployment of the stablecoin reserves.
It was proposed that USDC and USDT would rely on Morpho Vaults as their primary source of yield, while Maker’s sUSDS vault would contain DAI reserves. The proposal calls for Allez to risk-manage these vaults.
The Polygon’s specialized Protocol Governance Council and community forums will be used to discuss the proposal.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
