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Wormhole integrates native USDC transfers for four blockchain networks Wormhole integrates native USDC transfers for four blockchain networks

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Wormhole integrates native USDC transfers for four blockchain networks – Crypto News

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2 years ago

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Wormhole has integrated Circle’s Cross-Chain Transfer Protocol (CCTP), allowing USD Coin (USDC) to be transferred between Ethereum, Avalanche, Arbitrum and Optimism via Wormhole-based bridges, according to a Sept. 20 announcement.

The new feature is available to end-users via the Portal bridge, and developers can integrate it into their own apps using Wormhole Connect.

Portal USDC bridge. Source: Portal

The Wormhole team claimed that the new integration will reduce liquidity issues and user confusion. “On these new and emerging chains, multiple versions of these bridged USDC tokens can exist,” it stated, “which can lead to fragmented liquidity, poor pricing, and a confusing experience for users and developers alike.” CCTP will help fix this problem by “creating a natively cross-chain USDC that can be burned and minted across connected chains,” it stated.

When Circle first issued USDC, it was only available on Ethereum. If a user wanted to transfer USDC to another chain, they needed to use a bridge to lock up their native USDC on Ethereum and mint a derivative version on the other chain. However, multiple bridging protocols with various derivative versions of USDC could sometimes cause confusion among end-users.

In 2021, Circle launched its stablecoin on a second chain, Stellar. It continued to launch on additional chains afterward, bringing the number of compatible networks to 14 as of Sept. 20.

But for a user to transfer native USDC from one network to another, they still needed to deposit their coins to a Circle partner’s account and then withdraw them to another network using that account. Partially because of this complexity, many users continued to use bridged versions of the coin instead of its native version.

Related: Stablecoin depegging plagued USDC and DAI more than others: Analysts

On April 26, Circle launched CCTP, which is a set of smart contracts and an application programming interface (API) that can be used to burn USDC on one chain and have it be re-minted on another chain without the user needing to deposit to a Circle partner account.

At the time of its launch, CCTP only allowed transfers between Ethereum and Avalanche or vice-versa. Since then, it’s been expanded to support Optimism and Arbitrum networks as well. Circle plans to add additional networks in 2023, according to the protocol’s documents.

The Sept. 20 announcement states that CCTP has now been integrated into the Wormhole bridge interface, allowing Wormhole users to transfer native USDC between CCTP-supported chains for the first time. These networks currently include Ethereum, Optimism, Avalanche and Arbitrum.

Wormhole is not the only bridge that has implemented or intends to integrate with CCTP. Wanchan provides a similar feature, and according to Circle’s April 26 announcement, Celer, Hyperlane, LayerZero and LI.FI have also stated that they intend to implement it soon.

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