According to PANews, Mikko Ohtamaa, co-founder of Trading Strategy, has criticized Polygon for utilizing user-bridged USDC deposits in financial markets such as Morpho. Ohtamaa highlighted several risks associated with this practice.
Firstly, he pointed out that this approach undermines the illusion of self-custody. Although the Polygon bridge is controlled by a multi-signature wallet, this operation erodes users' trust in self-custody. The involvement of billions of dollars in fund flows could attract significant attention from regulators and media, raising concerns about regulatory scrutiny.
Moreover, Ohtamaa noted that users currently lack the option to choose whether to participate in this mechanism, which lacks transparency. He also mentioned the issue of double counting, where the bridged USDC is used for lending services on Polygon while simultaneously being utilized in Morpho on the mainnet.
Ohtamaa suggested that Polygon should explore more transparent methods, such as launching an independent bridging service that allows users to opt for converting USDC into 'Polygon Yield USDC.' He also mentioned that Circle has introduced a non-bridged version of USDC on Polygon. However, due to its late introduction and incompatibility with the bridged version, it has not been widely adopted.
