Blockchain firm Polygon has announced a new tactic to get yields. According to the official report released on December 13th, the Polygon community is discussing a plan to use $1 billion in stablecoin reserves from the POS chain bridge in order to produce yield.
The move comes against the price movement of Polygon’s native token $MATIC. At the press time the coin is trading at $0.6188, down over 5.58% as compared to the same time last day.
Polygon Aims At Higher Yield
Many idle stablecoins, such as DAI, USDC, and USDT, are currently held on the Polygon PoS Bridge and are not producing any returns. Supported by DeFi behemoths Allez Labs, Morpho Labs, and Yearn Finance, this proposal seeks to use the money for DeFi projects in order to generate enormous growth prospects.
Using premium collateral like USTB and sUSDS, the project aims to deploy about $1.3 billion worth of stablecoins into curated vaults on Polygon, such as Yearn’s yeUSDC on Ethereum and Morpho Vaults.
Bridge liquidity for USDC, USDT, and DAI is to be deployed very gradually into a corresponding ERC-4626 vault, according to this Pre-PIP. A separate PIP will activate each program asset, providing more information on these specifics.
Polygon Shifts From MATIC To POL
The decision to use $1 billion in stablecoin reserves from the POS chain bridge in order to produce yield follows Polygon’s previous update.
Previously, the Polygon PoS network underwent a major change with the start of the long-awaited upgrade from MATIC to POL on September 4th.
As the native gas and staking token in the first phase of this transition, POL undertook the place of MATIC, paving the way for more extensive uses in later stages, such as its function in the AggLayer.
“This upgrade is a fully community-driven initiative, shaped by extensive feedback and governance,” the Polygon team stressed. Last year, the PIP-17 proposal, which called for replacing MATIC with POL, immediately and significantly engaged the community.
$MATIC Price: What Do Indicators Say?
According to technical indicatorsfor $MATIC, the Fear & Greed Index is currently at 76 (Extreme Greed), while the sentiment is neutral.
Over the previous 30 days, Polygon saw 18 out of 30 (60%) green days and 20.03% price volatility. The overall sentiment regarding Polygon price prediction is neutral given that the token has seen more positive trading than negative in the past month.
Of the technical analysis indicators, 17 indicate bullish signals, while 14 indicate bearish signals.