The popular stablecoin company Circle has introduced a new technical standard to facilitate the process of launching its USD-pegged cryptocurrency, USDC, on new blockchain networks. Historically, launching USDC on a new network required a “migration” – users had to swap their unofficial USDC tokens for official ones.
Circle’s new “bridged USDC standard” provides a two-step approach to avoid this. First, a third-party developer can use the standard to launch an unofficial “bridged” version of USDC that runs on the new network but proxies back to USDC on an existing network to maintain its peg. This “phase one” bridged USDC is not issued or backed directly by Circle.
If later on Circle and the developer decide to make this an official USDC deployment, they initiate “phase two” – seamlessly upgrading the bridged USDC to be native USDC on the new network, fully issued and backed by Circle’s reserves.
The standard has specific technical requirements like using an upgradable bridge contract and not modifying it after launch. For the upgrade, the developer freezes new token mints, Circle takes over the contracts, and the coins backing the proxy supply are burned – causing the native supply to be directly backed by Circle.
This elegant two-phase approach means users don’t have to migrate tokens. The bridged USDC already holds transitions to become the real, native USDC once Circle initiates phase two and backs the supply with its reserves. The standard makes launching USDC quicker while avoiding disruptive migrations.
#USDC #Circle #Stablecoin #Cryptocurrency
