PANews reported on December 18 that Mikko Ohtamaa, co-founder of Trading Strategy, criticized Polygon for using user-bridged USDC deposits in funding markets (such as Morpho), arguing that this move poses multiple risks:

  1. Destroying the illusion of self-custody: Although the Polygon bridge is controlled by a multi-signature wallet, this operation breaks users’ trust in self-custody.
  2. Attracting regulatory attention: Fund flows involving billions of dollars are likely to attract significant attention from regulators and the media.
  3. No user choice: Currently, users cannot choose whether to participate in the mechanism, which lacks transparency.
  4. Double counting problem: Bridged USDC is used for lending services on Polygon and at the same time in Morpho on the mainnet.

He suggested that Polygon explore more transparent ways, such as launching an independent bridge service, allowing users to choose to exchange USDC for "Polygon yield-based USDC." In addition, he mentioned that Circle has launched a non-bridge version of USDC on Polygon, but it has not been widely adopted because it was launched late and is incompatible with the bridge version of USDC.

Related reading: Polygon Ecosystem Crisis: AAVE and Lido Withdrew Collectively, Caused by the “Borrowing Chickens to Lay Eggs” Proposal