Aave could leave Polygon over plan to use bridge funds for yield farming

Aave governance delegate Marc Zeller has raised concerns about Aave's future on Polygon after a pre-PIP proposed by AllezLabs, the "Polygon PoS Bridge Liquidity Program," would use $1.3 billion in idle stablecoins locked in the network's bridge. The proposal would bridge those funds to Ethereum through Morpho, targeting a "conservative" 7% yield that could exceed $90 million per year. In a governance forum thread, Zeller cites bridge hacks such as Ronin, BNB Bridge, Wormhole, and Multichain, and proposes setting loan-to-value to 0% for all assets on Aave V2 and V3 Polygon. Polygon Labs said the proposal is at a very early stage and that it supports the community prioritizing ecosystem security.