Circle has introduced a new standard to streamline the process of launching its stablecoin, USDC, on new networks, according to a November 21st blog post. The new “bridged USDC standard” gives developers the ability to deploy the token through a two-phase process.
In the first phase, the third-party developer has control of the token contracts, and the token on the new network is backed by a native version on another network. In the second phase, Circle takes control of the contracts, and the token becomes backed directly by Circle’s reserves. It’s important to note that the second phase may not occur with all deployments.
According to the post, the token produced in the first phase will be “unofficial and not issued nor redeemable by Circle,” but will serve “as a proxy to USDC that’s extensible to any ecosystem where bridging is made possible.” If Circle and the third-party developer later decide they want to make the token official, they can “seamlessly upgrade to native issuance in the future.”
The new standard aims to eliminate the need for “migrations,” where users must swap an unofficial version of USDC for an official version after it becomes available. If developers use the new standard, migrations should become unnecessary, as it allows the unofficial tokens already held in a user’s wallet to become official.
Developers looking to utilize the new standard are required to use a bridge with upgrade functionality for specific functions and refrain from upgrading the bridge once the token is issued. This is all outlined in the standard’s GitHub documentation.
When the decision is made to transition the token to an official version, the third-party developer can freeze new mints on the bridge and “reconcile in-flight bridging activity to harmonize the total supply of native USDC.” At this point, the ownership of the contract can be transferred to Circle, causing the native coins backing the tokens on the new network to be burned, thus backing the new network’s tokens directly by Circle’s reserves.
This process simplifies and streamlines the deployment of USDC on new networks, making it more accessible and reducing fragmentation.
Circle’s move to introduce the bridged USDC standard comes after the stablecoin issuer earlier launched a native Base network version of USDC in September, and did the same for Polygon in October. The company is continuously working to expand access to USDC and reduce fragmentation across different ecosystems.
The bridged USDC standard has been made public in an effort to create a more seamless experience for developers and end-users, ultimately enhancing the flexibility and reach of USDC across different networks.
In conclusion, the new “bridged USDC standard” is a significant development in the world of stablecoins and blockchain interoperability. By creating a streamlined process for deploying USDC on new networks, Circle is working to make its stablecoin more accessible and user-friendly. The standard’s GitHub documentation and the clear outline of the two-phase process provide a helpful guide for developers looking to leverage this new standard. With the continued growth and expansion of USDC to various networks, this standard will undoubtedly play a crucial role in furthering the adoption and usability of USDC within the broader cryptocurrency and blockchain ecosystem.