Circle, a leading provider of stablecoins, has unveiled a novel framework to streamline the initiation of its stablecoin, USDC, across diverse networks. In a recent blog post, the company introduced the “bridged USDC standard,” designed to facilitate the deployment of the token through a two-phase process.
During the initial phase, control of the token contracts is taken up by a third-party developer. In this stage, the token on the new network is backed by a native version on another network.
Circle’s Two-Phase USDC Deployment: A Seamless Approach to Bridging and Issuance
Subsequently, in the second phase, Circle takes charge of the contracts directly securing the token with its reserves. It’s important to note that not all deployments progress to this second phase.
The token generated in the first phase operates unofficially and is not subject to issuance or redemption by Circle. However, it acts as a surrogate for USDC and is adaptable to any ecosystem where bridging is viable. Should Circle and the third-party developer opt to formalize the token, a seamless transition to native issuance can occur in the future.
The main goal of this groundbreaking standard is to eliminate the need for migrations. During migrations, users usually trade an unofficial version of USDC for an official one once it becomes available.
Circle’s Innovative Bridged USDC Standard: Simplifying Deployments and Eliminating Migrations
The integration of the bridged USDC standard has the objective of making migrations unnecessary. This is because unofficial tokens in users’ wallets can be seamlessly converted into official ones.
The bridged USDC standard has seen practical applications in real-world scenarios. It has been successfully implemented by Consensys’ Linea Network and Scroll. These platforms operate as zkEVM layer-2 networks on the Ethereum blockchain.
Notably, Circle had previously introduced native versions of USDC on the Base network in September and on Polygon in October.