Circle is about to launch a cross-chain bridge for stablecoin USDC

Circle, the issuer of USDC, plans to implement a cross-chain swap feature for stablecoins in Q1/2023.

Circle is about to launch a cross-chain bridge for stablecoin USDC

As revealed by Jeremy Allaire, CEO of Cicle – the issuer of stablecoin USDC, this unit in the first quarter of 2023 will launch a cross-chain bridge for USDC, making inter-blockchain stablecoin swaps seamless. than.

This bridge will be called Cross-Chain Transfer Protocol (CCTP), operating under a simple burn-mint mechanism through smart contracts. Specifically, when a user needs to transfer USDC from blockchain A to blockchain B, the Circle protocol will review and approve the transaction, then burn the USDC version on A and reissue it on B.

Circle claims the mint-burn operation will help address the shortcomings of the lock-mint mechanism of many other cross-chain solutions, which have become targets for hackers when storing a large amount of tokens to secure value. As reported by Kyptos, cross-chain attacks have become a hot topic in 2022, causing more than $1.5 billion in damage. Ethereum founder Vitalik Buterin in early 2022 “predicted” the risks of cross-chain solutions, which have become reality.

Returning to the main topic, the most visible application of the Cross-Chain Transfer Protocol, besides the transfer of USDC to various blockchains, will be to allow swapping of inter-blockchain tokens. For example, users can choose to swap ETH on Ethereum for AVAX on Avalanche. A trading solution after integrating CCTP will be able to exchange ETH for USDC on Ethereum, burn it and then mint the corresponding amount of stablecoin on Avalanche, and finally use USDC on Avalanche swap for AVAX.

In addition, Circle developers revealed that the CCTP bridge for USDC can also be linked directly to DeFi protocols for cross-chain farming, or to provide more liquidity for lending products, payments, blockchain games, NFT, etc.

Currently, Cross-Chain Transfer Protocol is being tested on the testnet of Ethereum and Avalanche, is expected to launch in the first quarter of 2023 and start supporting those two blockchains. For the rest of 2023, Circle aims to connect more Solana and many other blockchains to CCTP.

As of January 22, 2023, USDC is available on 8 blockchains including Ethereum, Solana, Avalanche, TRON, Algorand, Stellar, Flow and Hedera; also linked to Polygon, Fantom, NEAR, Arbitrum and Cosmos.

The total supply of USDC is currently 43.1 billion USDC, backed by 43.2 billion USD in assets, including 9.5 billion USD in cash and 33.7 billion USD in US Treasuries. Circle recently shared a report stating that the company has always been committed to ensuring the value of USDC against the USD and that their stablecoin is completely safe.

However, USDC and other major stablecoins in 2022 and especially the fourth quarter recorded a sudden decline in total supply when crypto users massively converted money back to USD following the wave of chain crisis. .

Change in total supply of USDC in the last 1 year, according to CoinMarketCap

Synthetic Kyptos

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