A Polygon DAO group cohort is contemplating a proposal to make use of its greater than $1 billion of idle stablecoin reserves, at present held on the Polygon PoS Chain bridge to seize yields, per a pre-proposal governance put up.

“The PoS Bridge at present holds round $1.3B of stablecoins, which makes it one of many largest, but additionally idle, holders of stablecoins onchain,” the pre-proposal reads. “On the present benchmark lending charge for the three main stables this is a chance value of round $70M yearly.”

“The authors consider that DeFi as an entire has matured whereby property held within the Polygon PoS bridge can be utilized productively and securely to incentivize extra exercise on Polygon PoS,” it added.

DAOs are organizations represented by guidelines encoded as laptop applications, managed by the token holders associated to that group and never influenced by a government.

The plan entails utilizing Morpho Labs’ vaults to handle USDC and USDT focusing on a conservative 7% annual return via methods that embrace high-quality collaterals like USTB, sUSDS, and stUSD.

That might make Polygon an extra $70 million yearly from idle property. The yield generated can be reinvested again into the Polygon ecosystem, supporting development throughout the community and its ecosystem.

If the concept passes an preliminary group test, the proposal will goal to generate yield by step by step deploying dai (DAI), USD Coin (USDC) and tether (USDT) from reserves into decentralized finance (DeFi) protocols.

Deploying every asset would require a separate proposal to be floated and handed by the group sooner or later.

Polygon’s POL is down 5% prior to now 24 hours alongside a broader crypto market slide.