New "Bridged USDC Standard" Simplifies Token Launch Process
Circle, a leading cryptocurrency company, has introduced a new standard aimed at streamlining the process of launching its stablecoin, USDC, on new networks. The announcement was made in a blog post on November 21. The new standard, called the "bridged USDC standard," allows developers to launch the token through a two-phase process, making it easier and more efficient.
Two-Phase Process for Token Launch
The first phase of the process gives control of the token contracts to third-party developers, with the token on the new network backed by a native version on another network. In the second phase, Circle takes control of the contracts, and the token becomes directly backed by Circle's reserves. It's important to note that not all deployments will go through the second phase.
Benefits of the New Standard
The token produced in the first phase is considered "unofficial" and not issued or redeemable by Circle. However, it serves as a proxy to USDC that can be used in any ecosystem where bridging is possible. If Circle and the third-party developer decide to make the token official in the future, they can seamlessly upgrade to native issuance.
The release of this standard eliminates the need for "migrations," where users have to swap an unofficial version of USDC for an official version. With the new standard, migrations should no longer be necessary as the unofficial tokens held in a user's wallet can automatically become official.
Important Considerations for Developers
Developers using the bridged USDC standard are required to use a bridge with upgrade functionality for specific functions. Once the token is issued, developers should refrain from upgrading the bridge. This ensures a smooth transition and avoids any disruptions.
Transitioning to an Official Version
When the developer and Circle decide 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, ownership of the contract can be transferred to Circle, and the native coins backing the tokens on the new network will be burnt, resulting in the new network's tokens being directly backed by Circle's reserves.
Continued Expansion of USDC
Circle has been actively expanding the reach of USDC. In September, it launched a native Base network version of USDC, followed by the launch of a native version on Polygon in October. The introduction of the bridged USDC standard further enhances Circle's efforts to make USDC accessible on various networks, providing users with more options and flexibility.
Did you miss our previous article...