Yesterday, it was reported that the Polygon DAO community is deliberating a proposal to deploy about $1 billion of idle stablecoin reserves on the Polygon PoS Chain cross-chain bridge into yield farming. The news sparked outrage in the community, with crypto analyst Ignas considering it a terrible precedent, and Aave DAO also began discussions on stopping operations on Polygon.
(POL currency price is dismal, Polygon DAO proposes to deploy $1 billion stablecoin for yield farming)
Crypto analyst Ignas believes that using idle assets in cross-chain bridges will set a terrible precedent, putting all users at risk, with only yield farming protocols like Morpho and Yearn benefiting.
Especially hackers often exploit cross-chain bridge attacks, putting crypto users who use DeFi to transfer assets at risk, causing significant losses and harm within the DeFi ecosystem. The statistical loss amount is as follows:
Ronin: $624 million
BNB Bridge: $586 million
Wormhole: $326 million
Nomad: $190 million
Multichain: $126 million
Harmony: $100 million
Aave DAO is discussing stopping operations on Polygon. After the proposal passes, the LTV (Loan-to-Value) will be set to 0% (essentially shutting down operations), and several asset reserves on Aave V3 Polygon will be frozen, and governance may even be migrated from Polygon.
Tether CEO Paolo Ardoino also retweeted Ignas's tweet, stating that 'cross-chain bridges should not bear counterparty risk.'
This article discusses the controversy over investing idle assets in cross-chain bridges! Aave DAO is discussing stopping operations on Polygon, first reported by Chain News ABMedia.