There has been some discussion in the community around whether USDC should be put to productive use. As of now, these funds are sitting idle.
Before we discuss which protocols to deploy Radicle’s USDC to, it’s worth discussing whether Radicle’s stablecoin balances should be put to use at all. There are good arguments for and against it, which is why I wanted to start a formal discussion around the topic.
Offset ongoing expenses: Assuming rates stay at 4%, $20m of USDC would generate $800k in annual interest, which can go a long way towards funding governance-led initiatives like grants or growth.
Loss of principal: There is no such thing as free money: depositing funds in yield-bearing on-chain opportunities can be risky. There is a low (but non-zero) chance that some of the deposited principal is permanently lost due to liquidations, hacks, or exploits.
Not of essential importance right now: Radicle is playing a long game over the next decade. Getting adoption and user onboarding to features like Radicle Orgs should be the priority, and spending time on incremental improvements like yield programs may not make a significant difference in the grand scheme. For example, will generating an additional 4% on USDC really be a make or break it decision for Radicle long term? Probably not.
What does everyone else think?