Wormhole Integrates Circle's CCTP for Seamless Cross-Chain USDC Transfers Between Major Networks
Summary:
Wormhole has incorporated Circle’s Cross-Chain Transfer Protocol (CCTP), which allows USD Coin (USDC) to move across Ethereum, Avalanche, Arbitrum, and Optimism networks. This new feature, as announced on September 20, is available via the Portal bridge and can be embedded into applications through Wormhole Connect. Wormhole's team believes this integration will address liquidity issues and user confusion due to the coexistence of various versions of bridge tokens in new and emerging chains. The transfer protocol will resolve this by enabling a cross-chain USDC that can be destructed and created across connected chains. This move marks a significant milestone in expanding the reach of native USDC on various platforms.
Wormhole has successfully incorporated Circle’s Cross-Chain Transfer Protocol (CCTP), enabling the movement of USD Coin (USDC) across Ethereum, Avalanche, Arbitrum, and Optimism platforms, as revealed in a statement on September 20. This new advancement is accessible to users through the Portal bridge, with developers gifted the ability to embed it into their applications via Wormhole Connect. According to the Wormhole team, this latest integration is set to mitigate liquidity challenges and user confusion. Wormhole expressed that various versions of these connected USDC tokens can exist on these burgeoning chains which might lead to fragmented liquidity, inferior pricing, and user and developer bewilderment. The usage of CCTP will address these issues by "forging a naturally cross-chain USDC that can be destroyed and created across associated chains."
When Circle initially released USDC, it was exclusively available on the Ethereum platform. If a user desired to shift USDC to another chain, they were obliged to leverage a bridge to secure their Ethereum-based native USDC and spawn a derivative variant on the alternate chain. Nonetheless, the presence of multiple bridging protocols housing several derivative versions of USDC could breed confusion among users.
In 2021, Circle launched its stablecoin on an additional chain, Stellar, and proceeded to expand to other chains, with the compatible network total reaching 14 as of September 20. Yet, for users to move native USDC from one platform to another, they still needed to deposit their cryptocurrency to a Circle associate account and then retrieve it on a different network via that account. Due to these complexities, a number of users opted to continue using bridged versions of the coin instead of the native version.
On April 26, Circle unveiled CCTP, consisting of a series of smart contracts and an application programming interface (API) that allows the burning of USDC on one chain and its re-creation on another without the requirement for deposit into a Circle associate account. At its inception, CCTP only enabled transfers between Ethereum and Avalanche or the reverse. Since then, Optimism and Arbitrum networks have been incorporated and Circle intends to introduce more networks in 2023, as per the protocol's documents.
The announcement on September 20 declared that CCTP has now been intertwined into the Wormhole bridge interface, permitting Wormhole users to transfer native USDC between CCTP-backed chains for the first time, including Ethereum, Optimism, Avalanche, and Arbitrum platforms.
Wormhole is not the only bridge to have installed or plans to incorporate CCTP. Wanchan offers a similar feature and according to Circle’s April 26 announcement, Celer, Hyperlane, LayerZero, and LI.FI have expressed their intent to install it in near future.
Published At
9/20/2023 1:00:00 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.