- The deployment of USDC and EURC on other chains could change the course of network growth.
- The upgrade is expected to be completed in January 2024.
In an effort to reduce gas costs and improve security, the stablecoin issuer Circle [USDC]has unveiled a new upgrade to its network.
Dafter the “v2.2 upgrade” Circle revealed that the general idea behind the development was to make USDC and Euro coin [EURC] (a Euro-backed stablecoin), the most efficient monetary protocol on the Internet.
In May, AMBCrypto reported how Circle launched EURC on three blockchain networks. These included Avalanche [AVAX], Ethereum [ETH], And Stellar [XLM].
However, the project noted that this new upgrade would mean an expansion to six new blockchains.
Expansion is the name of the game
Some of the new blockchains earmarked for integration include the Polygon [MATIC] Goerli Testnet, Basic Goerli and Arbitration [ARB] Gurli.
Goerli was launched in 2019 and is designed to bring stability, speed and low transaction fees to the Ethereum mainnet.
Now Circle has noted that the new upgrade would increase gas efficiency by 7%. According to the communiqueCircle noted that:
“The cost reduction can range from 6-7% for features used in common use cases such as making a transfer, payment or trading with USDC or EURC. Developers and users of Cross-Chain Transfer Protocol (CCTP) can also see a 3-4% reduction in network gas costs when burning and mining USDC via blockchains.”
Recently created Circle moves to ensure USDC adoption continues at a rapid pace. And this new upgrade seemed like a move aimed at the target.
One of the reasons Circle continues to seek partnerships could be because of its declining market capitalization.
Based on Messari’s factsUSDC’s market capitalization had increased year-over-year (YTD) from $44.7 billion to $24.2 billion.
Source: Messari
The drop in market capitalization means that market players appear to have a preference for other stablecoins, such as Tether [USDT]. But regardless, USDC has managed to maintain its stay in the top 10 of the crypto rankings.
Opening the network to new possibilities
Like market capitalization, network growth has also been affected. Network growth measures the number of new addresses interacting with a network. An increase in statistics implies an increase in adoption.
Conversely, a decrease indicates a decrease in traction. Analyzing the network growth data from Santiment, AMBCrypto discovered that new addresses refrain from transactions.
But now that v2.2 is designed to promote more interaction, the state of the metric may change.
Source: Santiment
Another strategy Circle plans to use to sustain itself is to adopt Ethereum’s account abstraction. Simply put, account abstraction is the technology that allows users to manage their money using smart contracts.
Related to this, Circle said it is considering ERC-4337 compatibility with its network.
The ERC-4337 is the standard for account abstraction that enables the use of smart contracts without complexity.
Circle also noted that it was working on a licensing feature to make USDC and EURC compatible with the standard and noted that:
“To ensure the licensing feature is 4337 compliant, we have a recommendation from the Ethereum community to implement the permit in a way that avoids the timestamp check in some cases.”
Realistic or not, here it is The market capitalization of USDC in USDT terms
Meanwhile, the stablecoin issuer also noted that the rollout of the new upgrade may take some time. It was announced that all deployments should be live by January 2024.
Additionally, Circle mentioned that EURC and USDC would be deployed to the Sepolia testnet around the same time period.