The Centre Consortium, an entity established by Circle and Coinbase to manage the USD Coin (USDC), has launched a major upgrade to the stablecoin, claiming the move will significantly improve its usability and security.
“Today’s update comes at a time when USDC has punched through [USD] 1.4 billion market cap solidifying its position as the fastest growing regulated fully-reserved digital dollar stablecoin in the world,” the consortium said in an August 27 statement.
Discussing the specifics of the update, the statement says that USDC 2.0 will allow developers of digital wallets to remove the so-called ‘gas fees’ that are associated with transactions performed on the Ethereum (ETH) network.
Users of most digital wallets supporting USDC, which is an Ethereum ERC-20 token, had to purchase and hold a balance of ETH to pay the fees to settle transactions, “creating an enormous barrier to mainstream adoption and broad usage of digital dollar stablecoins for internet payments,” said the statement.
“USDC 2.0 introduces ‘gasless sends’ which enables wallet developers to remove this complexity from the user experience and either pay for the fees on behalf of customers or present/deduct these fees in USDC instead of ETH.”
The consortium believes that, as a result, the experience of using USDC in digital wallets will become closer to the mainstream mobile payment apps.
Another element of the upgrade comprises a new set of on-chain multiple-signature contracts that include new consensus mechanisms. The consortium predicts the measure will help to improve the “resiliency and growth of Centre and shift off-line human processes into on-chain multiple signature processes.”
Owing to the upgrade, administrative operations will be managed on-chain versus manual off-chain processes, enhancing security, auditability, as well as in turn resilience, said Centre.
“By using an M-of-N multiple signature model, these improvements also anticipate growth in Centre with more members, including issuing members who would participate in operational flows using on-chain tasks,” the statement said.
The latest updates will be completely backwards compatible, it added.
USDC surpassed the USD 1 billion market cap last July, about 21 months after its launch, with Centre claiming the coin’s continued rapid growth in 2020 was a result of a number of factors.
First, the financial crisis caused by the COVID-19 pandemic “resulted in currency volatility across many developing economies. Demand for digital dollars that are fast, global, secure, and inexpensive has increased significantly as a result,” said the consortium.
“Secondly, they added, “businesses around the world are beginning to seek the advantages of payments made via an entirely new, digital, global and interoperable infrastructure that enables low-cost transfers anywhere nearly instantly.” And thirdly, the “recent innovations in the governance of the Compound protocol have driven significant demand for USDC, highlighting DeFi as a space with high growth potential,” the announcement concluded.
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