Circle introduces a 'bridged USDC standard' to facilitate deployment on new networks.
Circle has released a novel standard enabling developers to initiate an unofficial bridged iteration of USDC, with the potential for it to later transition into an official and native version.
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On November 21, Circle unveiled a new standard designed to simplify the launch process of its stablecoin, USDC, on new networks, as outlined in a blog post. Referred to as the "bridged USDC standard," this approach enables developers to initiate the token through a two-phase process. During the initial phase, third-party developers retain control of the token contracts, with the new network's token backed by a native version on another network. In the subsequent phase, Circle assumes control of the contracts, and the token is directly backed by Circle's reserves, although this second phase is not mandatory for all deployments.
The post explains that the token generated in the first phase is deemed "unofficial and not issued nor redeemable by Circle," functioning as a proxy to USDC extendable to any ecosystem with bridging capabilities. If both Circle and the third-party developer decide to formalize the token, they can seamlessly transition to native issuance in the future, eliminating the need for migrations, where users typically swap an unofficial version for an official one.
The standard, documented on GitHub, mandates developers to utilize a bridge with upgrade functionality for specific functions and refrain from upgrading the bridge once the token is issued. When the decision is made 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 align the total supply of native USDC. At this point, ownership of the contract is transferred to Circle, leading to the burning of the native coins backing the tokens on the new network. Consequently, the new network's tokens are directly backed by Circle's reserves.
This move follows Circle's earlier launches of a native Base network version of USDC in September and a similar version on Polygon in October.
