As a seasoned crypto investor with over a decade of experience navigating the ever-evolving digital asset landscape, I find the recent pre-Polygon improvement proposal by Allez Labs to be an exciting development. The potential for yield generation from the stablecoins held in Polygon’s PoS Portal Bridge could mark a significant step forward for decentralized finance (DeFi).
Allaz Labs has put forward a preliminary proposal, known as PIP, aimed at establishing income-generating possibilities for the roughly $1.3 billion worth of stablecoins stored within Polygon’s Proof-of-Stake (PoS) Porta Bridge. This proposal seeks to enhance the functionality of the platform.
Based on the suggested plan, these digital assets known as stablecoins such as Dai (DAI), Tether (USDT), and Circle’s USDC (USDC) could potentially produce around $70 million in yearly returns instead of just being left unused.
The authors suggested storing USDC and USDT digital assets in Morpho Wallets, which are managed by Polygon and overseen by Allez. Decentralized lending platform Morpho would then earn interest on these stablecoins because there are currently no native tools for these specific products available.
In this scenario, the earnings would be directed towards the Decentralized Finance (DeFi) platform known as Yearn. Yearn is responsible for overseeing the Ecosystem Incentives Program using distinct Polygon Ecosystem Vaults for each stablecoin asset. Once in place, Yearn will distribute incentive rewards across the Polygon’s proof-of-stake and AggLayer DeFi ecosystem to stimulate further project development.
Decentralized finance reclaiming 2021 high point
In simpler terms, the fundamental elements of decentralized finance (DeFi) revolve around increasing profits from collateral assets and speeding up the circulation of money. After a period of reduced market activity between April 2022 and March 2024, DeFi is undergoing a revival, marking a new era in its development.
Based on DefiLlama’s data, the combined worth secured (TVS) in the decentralized finance industry stands at around $136 billion – a significant increase from the 2023 lows of about $36 billion. As of December, this total value is nearing the peak levels of 2021, which were approximately $176 billion.
In November alone, the decentralized exchange known as Curve Finance generated annualized earnings of approximately $37 million, marking a 23% increase from the preceding month. A representative for Curve attributed this spike in DeFi (Decentralized Finance) activity to the aftermath of Donald Trump’s election victory.
A significant part of the increase in Decentralized Finance (DeFi) activity can be linked to the emergence of tokenized Bitcoin (BTC) products. These products enable Bitcoin holders to earn returns on their Bitcoin and utilize it within DeFi systems integrated into the Ethereum network.
In its growth phase, experts in the Decentralized Finance (DeFi) field anticipate the launch of financial services that rival conventional banking institutions. These services may include access to exclusive credit markets for clients, similar to traditional banking offerings.
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2024-12-13 21:41