Aave withdraws from Polygon, over $300 million TVL could disappear?
rnGhost, the leading liquidity protocol onPolygon PoS, is in the process of withdrawing from the network, after the DAO community passedProposal to stop lending services. This move could cost Polygon $300 million.TVL.rnThe decision to withdraw stems froma controversial proposal by Polygon in...
Ghost, the leading liquidity protocol onPolygon PoS, is in the process of withdrawing from the network, after the DAO community passedProposal to stop lending services. This move could cost Polygon $300 million.TVL.
The decision to withdraw stems froma controversial proposal by Polygon in December 2024Specifically, Polygon wants to deploy over $1 billion in idle stablecoins on the PoS Chain bridge to generate profits on platforms likeMorphoand Yearn - Aave's competitor.
This intention has raised concerns from the Aave community, as they believe it poses more risks than traditional yield-generating strategies likestaking ETHgoodDeposit DAI to MakerDAO.
In response, Marc Zeller, founder of Aave, proposed strict risk control conditions for Aave v2 and v3 on Polygon PoS. Specifically, he proposed setting the loan-to-value (LTV) ratio of USDT and USDC to 0%, which would completely stop the ability to borrow in stablecoins on Polygon PoS.
