Polygon DAO proposes to utilize $1.3 billion in stablecoin reserves to generate an estimated $90 million in returns through deposits on Morpho.
Polygon's Proposal for Self-Sustainability
The Polygon team has proposed leveraging $1.3 billion in stablecoins to generate profits, support DeFi growth, and bolster its ecosystem.
These funds, currently locked within the Polygon PoS Bridge, are inactive and not generating any yield. The proposed initiative involves utilizing these stablecoins, primarily USDT and USDC, as deposits on lending platforms like Morpho.
The DAO’s goal is to create a cash flow from idle assets, enabling increased liquidity and self-funding for the development of its network and Agglayer.
Generating Returns Through Stablecoin Lending
According to Paul Frambot, CEO of Morpho Labs, at the current interest rate, Polygon DAO’s funds could generate between $70 and $90 million annually.
With the growing demand for loans on leading lending protocols, interest rates on stablecoins have been rising significantly.
At present, depositing stablecoins on AAVE, a market-leading platform, yields returns between 7% and 12%, driven by high demand for debt from traders and investors.
Meanwhile, the POL token (formerly MATIC) is trading slightly above $0.60, about 20% below the peak reached the previous week.
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by Gue22 🌐🚀