A proposal is under consideration within the Polygon DAO community to leverage over $1 billion in idle stablecoin reserves currently held on the Polygon PoS Chain bridge. The goal is to generate yields by deploying these assets into decentralized finance (DeFi) protocols, according to a pre-proposal governance post.
Currently, the Polygon PoS Bridge holds approximately $1.3 billion in stablecoins, making it one of the largest yet unused stablecoin reserves on-chain. The pre-proposal highlights that, at the current lending rate for the three major stablecoins, this represents an opportunity cost of roughly $70 million annually.
The proposal advocates for using Morpho Labs’ vaults to manage USDC and USDT, targeting a conservative 7% annual return through strategies involving high-quality collateral such as USTB, sUSDS, and stUSD.
By deploying these idle assets, Polygon could generate an additional $70 million annually. This yield would be reinvested into the Polygon ecosystem, helping to drive further growth across the network.
If the community approves the initial proposal, the next steps would involve deploying DAI, USDC, and USDT into DeFi protocols. Each asset deployment would require separate proposals to be voted on and passed by the community.
Meanwhile, Polygon’s native token, POL, has experienced a 5% decline in the past 24 hours, mirroring the broader downturn in the cryptocurrency market.
