Polygon community proposes to utilize 1.3 billion magnesium idle funds, which can generate an additional 70 million magnesium revenue annually

Polygon The community is discussing a proposal aimed at utilizing over $1 billion in funding from the PoS Chain cross chain bridge (the official cross chain bridge connecting the Polygon network and Ethereum) to generate additional revenue.

Web3 risk management provider Allez Labs, in collaboration with decentralized finance (DeFi) protocols Morpho and Yearn, has written a "Polygon Improvement Proposal Plan" to solicit opinions from the Polygon community on how to deploy approximately $1.3 billion in stablecoin reserves (DAI, USDC, and USDT).

The proposal points out that this idle $1.3 billion stablecoin reserve incurs an annual opportunity cost of approximately $70 million. Therefore, its goal is to utilize this idle capital to improve the efficiency of fund utilization and promote economic activity or user engagement in the Polygon PoS network and the broader AgLayer ecosystem.

According to the proposal, these stablecoin reserves will be gradually deployed to ERC-4626 vaults for each asset type. Among them, it is recommended to store DAI reserves in Maker's sUSDS vault, while USDC and USDT will mainly rely on Morpho Vaults as a source of income. According to the proposal, these vaults will be risk managed by Allez.

The proposal is still in its early stages and needs to wait for discussion on community forums and Polygon's dedicated 'Protocol Governance Committee'.