On Tuesday, Circle unveiled the imminent arrival of USDC natively on layer 2 Base. While there is already a bridged version of stablecoin, what will this actually change?
Circle announces the arrival of USDC on Base natively
It was announced last week when Coinbase invested in Circle: Circle plans to launch its stablecoin on 6 new blockchains.
It seems that Coinbase’s Base blockchain is one of them, and the USDC will soon arrive natively on this layer 2 of Ethereum (ETH):
1/ The hype continues for StableSeptember … & it’s still August. Let’s learn what native $USDC means for @BuildOnBase & how developers & users can migrate from USDbC (USD base Coin).https://t.co/7bKAChnQrI
– Circle (@circle) August 29, 2023
To date, there is a version of stablecoin on Base, known as USDbC. However, this bridged version cannot really be considered canonical.
Base’s official bridge allows real USDCs to be deposited from Ethereum in order to create a synthetic version on layer 2. It is therefore the Ethereum USDCs locked in the bridge that are supported by Circle.
A smooth transition
With this upcoming novelty, Circle will then allocate a proportional share of these reserves for its stablecoin on Base, which will take the form of a separate USDbC token with the official USDC ticker.
In this way, if it is not yet operational, the stablecoin’s smart contract has already been deployed on the network: 0x833589fCD6eDb6E08f4c7C32D4f71b54bdA02913.
This change means that the various decentralised finance (DeFi) applications that gravitate around Base are migrating from stablecoin to its canonical form. On this subject, Circle indicates that this transition will be smooth :
“With respect to liquidity migration, Base will work with ecosystem applications to ensure a smooth, optional transition of liquidity from USDbC to USDC over time. There will be no immediate changes to Base’s bridge and it will continue to operate as normal. “
To date, the USDC is the second largest stablecoin in the market with a capitalisation of nearly $26.18 billion. Based on last week’s statements, we can now expect 5 more announcements of new USDC arrivals on different blockchains in the coming weeks/months.
