The Aave community is considering a proposal to withdraw from the Polygon network due to concerns about security risks tied to bridged assets. This follows a proposal from the Polygon community to use over $1 billion in bridged assets for yield generation.
Background and Reasons for the Proposal
The proposal from the Polygon community raised concerns at Aave, the largest decentralized app on the network, due to potential vulnerabilities. Marc Zeller, the founder of Aave Chan, authored a proposal to adjust risk parameters for Aave's Version 2 and Version 3 protocols on the Polygon network.
Details of the Proposed Plan
The proposal suggests significant changes to reduce security risks and encourage migration from the Polygon network. It includes setting the loan-to-value (LTV) for all assets on Aave V2 and V3 to 0%, raising reserve requirements to 85%, and removing support for Aave V3 Polygon in the Safety Module.
Community Reaction and Polygon's Future
Polygon Labs emphasized that security will be a priority as it moves forward with any yield-generation strategies. Previously, Allez Labs, in collaboration with Morpho and Yearn, proposed deploying around $1.3 billion in stablecoin reserves to generate yield in the Polygon network.
The discussion is ongoing, with Aave emphasizing the importance of protecting users from potential risks posed by the use of bridged assets.
