The Polygon community is considering a proposal to generate yield from over $1 billion in stablecoin reserves currently held in the Polygon PoS Chain bridge.
Today @AllezLabs, @MorphoLabs & @Yearnfi posted a pre-PIP for a Polygon PoS Bridge Liquidity Program.
This community-led proposal discusses activating stablecoin reserves on the PoS Bridge & directing yield into new incentive programs.
Give feedback:https://t.co/QtQJgqyI7D
— Polygon Foundation (@0xPolygonFdn) December 12, 2024
Polygon Proposes Unlocking Yield from $1.3B Reserve
The motion proposed by Web3 risk management provider Allez Labs along with DeFi protocols Morpho and Yearn, highlights a strategy to deploy approximately $1.3 billion in idle stablecoin reserves (DAI, USDC, and USDT) into yield-generating opportunities.
As per the Pre-Polygon Improvement Proposal (PIP), the idle reserves represent an estimated opportunity cost of $70 million annually. The plan aims to channel these funds to boost activity on Polygon PoS and strengthen the broader AggLayer ecosystem, which will further help with greater utility and engagement.
The reserves would be allocated gradually into ERC-4626 vaults designed for specific stablecoin assets. For instance, DAI reserves would be held in MakerDAO’s sUSDS vault.
USDC and USDT would be placed in Morpho Vaults, which are optimized for secure yield generation.
Allez Labs would oversee risk management for these vaults, ensuring the safety of deployed assets while maximizing returns.
This proposal will undergo discussions in the Polygon community forums and be reviewed by the network’s Protocol Governance Council.
Polygon Market Trends
Polygon (MATIC) has gone down by 6.71% to $0.6112. The 24 hour market volume for MATIC has also slashed by 42.84%, to $10.91 million. The market cap has reached $1.19 billion after a 6.74% dip.
Also Read: Polygon Price Prediction 2024 – 2030
