POL currency price is bleak, Polygon DAO proposes to deploy 1 billion US dollar stablecoin to play yield farming

The Polygon DAO community is currently discussing a proposal to deploy approximately $1 billion in idle Stable Coin reserves from the Polygon PoS Chain cross-chain bridge to yield farming. According to the contents of a governance proposal, if these Stable Coins can be effectively utilized, they can generate a considerable annual income.

The proposal points out: "The PoS cross-chain bridge currently holds about 1.3 billion US dollars of Stable Coin, making it one of the largest idle Stable Coin holders on the chain." According to the proposal author's estimation, the opportunity cost of this idle state is approximately 70 million US dollars per year, based on the benchmark lending rate of the main Stable Coin.

The well-established DeFi puts idle funds into financial management

The proposal believes that as the decentralized finance (DeFi) ecosystem matures, these funds can be deployed and used productively and securely, generating not only returns but also promoting more activities on the Polygon PoS Chain.

"The overall DeFi ecosystem has matured, allowing assets held on the Polygon PoS bridge to be used in a productive and secure manner, further incentivizing activity on Polygon PoS." stated the governance proposal.

Morpho seizes the opportunity to occupy business opportunities

The proposal suggests using Morpho Labs' vault to manage Stable Coin, such as: USD Coin (USDC) and Tether (USDT). By adopting a conservative strategy and using high-quality collateral (such as: USTB, sUSDS, and stUSD), the plan targets an annualized yield of 7%. If successful, this strategy can generate approximately $70 million in annual revenue, which will be reinvested in the Polygon ecosystem to promote the growth of the network and its applications.

The proposal still needs to be decided by the community

This governance process aims to ensure community consensus. The proposal will first undergo preliminary review by the DAO community. If approved, the funds will be gradually deployed to DeFi protocols, starting with major stablecoins such as DAI, USDC, and USDT. The deployment of each asset requires a separate proposal to ensure careful oversight and risk management.

Despite attracting widespread attention, Polygon's native coin POL has recently faced challenges, dropping 5% in the past 24 hours due to the overall cryptocurrency market downturn. However, proponents of the proposal believe that utilizing idle reserves on cross-chain bridges can provide much-needed momentum for network growth and resilience.

This article POL coin is bleak, Polygon DAO proposes to deploy 1 billion US dollars Stable Coin to play yield farming, first appeared in Chain News ABMedia.