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- USDC and EURC’s deployment on other chains could change the course of the network growth.
- The upgrade is projected to be complete by January 2024.
In a bid to reduce gas costs and improve security, stablecoin issuer Circle [USDC], has unveiled a new upgrade on its network.
Dubbed the “v2.2 upgrade” Circle revealed that the overall idea behind the development was to make USDC and Euro Coin [EURC] (a Euro-backed stablecoin) the most efficient money protocol on the internet.
However, the project noted that this new upgrade would mean expansion to six new blockchains.
Expansion is the name of the game
Launched in 2019, Goerli was designed to bring stability, speed, and low transaction fees to the Ethereum mainnet.
Now, Circle has noted that the new upgrade would bring about a 7% increase in gas efficiency. According to the communiqué, Circle noted that:
“Cost reduction can range between 6-7% for functions invoked in many common use cases, such as making a transfer, payment, or trade with USDC or EURC. Developers and users of Cross-Chain Transfer Protocol (CCTP) can also see a 3-4% reduction in network gas fees when burning and minting USDC across blockchains.”
Recently, Circle has been making moves to ensure that USDC adoption continues at a high rate. And this new upgrade seemed like a move geared at the objective.
One of the reasons Circle continues to seek partnerships could be because of its declining market cap.
Based on Messari’s data, USDC’s market cap had gone from $44.7 billion to $24.2 billion on a Year-To-Date (YTD) basis.
The drop in market cap means market players seem to have a preference for other stablecoins like Tether [USDT]. But regardless, USDC has been able to maintain its stay in the top 10 on the crypto standings.
Opening the network for new possibilities
Like the market cap, network growth has also been affected. Network growth measures the number of new addresses interacting with a network. An increase in the metric implies a rise in adoption.
Conversely, a decrease suggests a drop in traction. Analyzing the network growth data from Santiment, AMBCrypto found out that new addresses have been refraining from transactions.
But with the v2.2 designed to foster increased interaction, the condition of the metric might change.
Another strategy Circle wants to use in holding its ground is by adopting Ethereum’s account abstraction. In simple terms, account abstraction is the technology that allows users to control their funds using smart contracts.
With respect to this, Circle said it was considering the ERC-4337 compatibility with its network.
The ERC-4337 is the account abstraction standard facilitating the usage of smart contracts without complexities.
Circle also noted that it was working on a permit function to make USDC and EURC compatible with the standard noting that:
“To allow the permit function to be 4337-compatible, we’ve taken a recommendation from the Ethereum community to implement permit in a way that avoids the timestamp check in some instances.”
Realistic or not, here’s USDC’s market cap in USDT terms
Meanwhile, the stablecoin issuer also noted that the rollout of the new upgrade might take a while. It disclosed that all of the deployments should be live by January 2024.
Additionally, Circle mentioned that EURC and USDC would be deployed on the Sepolia testnet around the same period.