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Always been a huge supporter of Polygon. They paved the way for so much in our industry, inclusive of front-running ZK to viability about 5yrs before its time.
However, their new proposal is shocking. For anyone unaware, they're looking to essentially use all the stables on the polygon bridge ($1.3b), put it into yield farms, and then use the yield earned to fund polygon projects of their choosing.
For those of you who have been around a while: yes, exactly what caused FTX.
However, even if we were to assume good faith behaviour, the risks are absolutely systemic. All it'd take is one pool getting drained, and then you've got a bank rush on a completely synthetic asset ("loaned" stables) trying to get out of the bridge.
Protocols like Aave (50% of the TVL on Polygon) are also rekt, because they were lending out that same synthetic asset.
The idea of moving away from banks to self-custody, only to have a chain lend out my assets is just alien to me. 13 replies
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