Polygon community rejects proposal to use over $1 billion bridge stablecoin to generate revenue

PANews reported on December 18 that according to The Block, Polygon community members rejected an initial proposal that suggested deploying more than $1 billion in stablecoin reserves to generate revenue, according to relevant pages. The proposal, put forward by Web3 risk provider Allez Labs in partnership with DeFi protocols Morpho and Yearn, aims to leverage the approximately $1.3 billion in DAI, USDC and USDT reserves in the PoS Chain bridge for yield.

Community members expressed concerns about security issues and the lack of an opt-in mechanism for affected users, expressing doubts about the feasibility of the proposal. It seems unlikely that the proposal will pass given the community's reservations, but that doesn't prevent Polygon from exploring innovative and even bold ideas in the future.

Polygon also responded to Aave Chan’s proposal, calling the response from Aave leadership “disappointing.” They claim Aave Chan resorted to threatening tactics because their main rival, Morpho, was starting to gain attention. Aave founder Stani Kulechov also expressed his views on the controversy surrounding Polygon’s cross-chain fund investment proposal. He criticized the proposal for lacking adequate risk protection, highlighting Aave's role in the Polygon network, noting that 40% of the total value locked in Polygon is deposited in Aave, with Aave's main governance functions running on Polygon.