The Ethereum lending protocol Aave had previously considered exiting Polygon due to dissatisfaction with Polygon deploying $1 billion of idle stablecoin reserves to yield farms. As one of Aave DAO's main representatives, Marc Zeller, along with the alias EzR3aL, expressed support for leaving Polygon. However, Polygon's CEO Marc Boiron, upon learning of this, criticized Aave from afar, claiming that Aave is engaging in monopolistic behavior.
Proposal controversy: how to effectively utilize Polygon's idle funds.
Risk management company Allez Labs, along with yield farming protocols Morpho Labs and Yearn, jointly suggested on December 12 to transfer $1.3 billion in stablecoins from the Polygon PoS Chain cross-chain bridge to Morpho, earning interest income through lending. If successfully executed, this plan could generate about $70 million in revenue annually, further promoting the growth of the Polygon ecosystem and applications.
However, the news sparked a huge wave of controversy because hackers often exploit cross-chain bridges, putting all users at high risk, with only yield farming protocols like Morpho and Yearn benefiting.
Aave's response suggests that proposing to exit Polygon reduces risk.
Marc Zeller, one of Aave DAO's main representatives, proposed the exit plan Operation Polygon(e), suggesting that Aave withdraw from the Polygon blockchain to mitigate risks potentially brought about by participating in this proposal. Zeller stated that Polygon has not adequately considered the systemic issues that could arise.
Another representative of Aave DAO, known by the alias EzR3aL, has also expressed support for Zeller's proposed exit plan from Polygon. The combined voting power of the two is sufficient to influence Aave DAO's final decision, and the proposal is expected to undergo preliminary voting early next year.
Aave DAO exit plan codename: Polygon(e)
(Controversy over idle asset investment in cross-chain bridges! Aave DAO discusses ceasing operations on Polygon)
Both sides are at odds, facing off between anti-competitive behavior and risk management.
Following the news of Aave's potential exit, Polygon Labs CEO Marc Boiron stated in an interview with foreign media that this proposal is still in the preliminary stages and will take several months to materialize. He also criticized Aave's Polygon(e) initiative from afar, stating, 'Aave means that we have the ability to completely control Polygon; in simple terms, they are the boss in this field, and they call the shots.' Boiron believes that Aave is deliberately suppressing competitors and using its dominant position in the DeFi sector to stifle peers.
Aave insists that the Polygon(e) initiative is purely to resist high-risk and unpopular proposals, denying any intention to suppress competitors. However, Zeller's criticisms of Morpho over the past year have led outsiders to question whether it is as Zeller claims, 'without intent.'
Marc Zeller has been continuously criticizing Polygon and Morpho on Twitter this year. The exit would have a significant impact on Polygon, while Aave may find it less concerning.
Aave holds a pivotal position in Polygon, occupying 40% of the locked value in Polygon. If Aave ultimately chooses to exit, it could have a significant impact on Polygon. However, Polygon only accounts for 1.5% of Aave's revenue, which may result in a relatively minor financial impact on Aave.
Aave accounts for nearly 40% of the locked value in Polygon.
(POL token price plummets, Polygon DAO proposal deploys $1 billion stablecoins for yield farming)
This article reports that representatives from Aave and Polygon are at odds! The $1 billion proposal has sparked a 'chain exit' controversy, raising concerns that Aave might monopolize the industry. It first appeared in Chain News ABMedia.
