The Polygon community is discussing a proposal to generate additional revenue using over $1 billion in funds from the PoS Chain cross-chain bridge (the official cross-chain bridge connecting the Polygon network to Ethereum).
Web3 risk management provider Allez Labs and decentralized finance (DeFi) protocols Morpho and Yearn have co-authored a "Polygon Improvement Proposal Pre-Draft" to seek input from the Polygon community on how to deploy around $1.3 billion in stablecoin reserves (DAI, USDC, and USDT).
The proposal states that this $1.3 billion in idle stablecoin reserves incurs an opportunity cost of around $70 million per year. Therefore, its goal is to utilize this idle capital to improve capital efficiency and drive economic activity or user engagement in the Polygon PoS network and the broader AggLayer ecosystem.
According to the proposal, these stablecoin reserves will be gradually deployed into ERC-4626 vaults tailored for each asset type. Specifically, it is suggested to deposit the DAI reserves into Maker's sUSD vault, while USDC and USDT will primarily leverage Morpho Vaults as a yield source. These vaults will be risk-managed by Allez.
The proposal is still in the early stages and awaits discussion in the community forum and the Polygon-specific "Protocol Governance Council".
