The Polygon community is set to review a proposal to generate yield on over $1.3 billion worth of reserves held in DAI, USDC, and USDT. These assets are currently locked on the bridge connecting the Polygon PoS Chain to Ethereum.
The proposal, put forth by Web3 risk management providers Allez Labs along with teams from Morpho and Yearn, argues that the idle reserves are incurring opportunity costs estimated at $70 million annually.
The initiative aims to leverage these funds to stimulate additional activity on Polygon PoS and within the AggLayer ecosystem.
According to the plan, the stablecoins would be gradually allocated to ERC-4626 vaults tailored for each token type. Specifically:
- DAI would be directed to sUSDS by Maker.
- USDC and USDT would flow into Morpho vaults.
Risk management would be overseen by Allez Labs.
The proposal will be discussed on the Polygon community forums and by the specialized Protocol Governance Council.
Background: On September 4, Polygon developers rolled out an update converting the network’s utility token, MATIC, to POL at a 1:1 ratio.
Additionally, in February, the Polygon Foundation received the final 273 million MATIC tokens unlocked from a vesting contract.
Cryptol – your source for the latest news on cryptocurrencies, information technology, and decentralized solutions. Stay informed about the latest trends in the digital world.