Circle launches new standard streamline According to a blog post on November 21, the process of launching its stablecoin USDC on the new network.
The new “Bridging USDC Standard” allows developers to launch tokens through a two-stage process. In the first phase, third-party developers control the token contracts, and tokens on the new network are supported by native versions on another network. In the second phase, Circle controls the contract and tokens are directly backed by Circle’s reserves. Phase 2 may not occur in all deployments.
Introducing the Bridging USDC Standard, a New Way to Extend Access Rights $USDC and reduce debris.
The EVM blockchain and aggregation teams can deploy bridged USDC token contracts now, with the option for Circle to seamlessly upgrade to native issuance in the future.https://t.co/suSgllMQoQ
— circle (@circle) November 21, 2023
According to the post, the tokens generated in the first phase will be “unofficial and will not be issued or redeemed by Circle,” but will “serve as a proxy for USDC, extensible to any ecosystem that can be bridged.” If Circle and Section 1 Three-party developers later decided to formalize the token so they could “seamlessly upgrade to native issuance in the future.”
Circle said it released the standard to eliminate the need for a “migration” in which users would have to replace an unofficial version with an official version once USDC becomes available. If developers use the new standard, migration should become unnecessary as it allows unofficial tokens already held in user wallets to become official tokens.
Github documentation for the standard need Developers use bridges with upgrade capabilities for specific functionality and avoid upgrading the bridge after the token is issued.
related: Stablecoin issuer Circle considering 2024 public offering: report
Once the developers and Circle decide to convert the token to the official version, third-party developers can freeze new minting on the bridge and “coordinate on-the-fly bridge activity to coordinate the total supply of local USDC.” Ownership of the contract can then be transferred to the Circle, at which point the native tokens supporting the tokens on the new network will be burned, causing the new network’s tokens to be directly backed by the Circle’s reserves.
In September, Circle launched the native Base network version of USDC. In October, Polygon did the same thing.
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