Wormhole Integrating Circle’s CCTP to Facilitate USDC Transfers Among Blockchain Networks

Wormhole, in a Wednesday, September 20 statement, confirmed integrating Circles’s Cross-Chain Transfer Protocol (CCTP) to enable sending USD Coin (USDC) among select blockchain networks. The Wormhole-based bridges will facilitate the stablecoin USDC transfer among Optimism, Avalanche, Ethereum, and Arbitrum. 

Wormhole indicated that the end-users can access the recently unveiled feature through the Portal bridge. Besides, the developers can leverage Wormhole Connect to integrate the feature into their applications. 

Wormhole Integrates CCTP to Overcome Confusion and Liquidity Issues

The Wormhole announcement clarified that the integration will lower the liquidity issues while minimizing user confusion. The team admitted that the new and subsequent chains are compatible to support various versions of the bridged USDC tokens. 

The Wormhole team indicated that the multiplicity of the chains could translate to fragmented liquidity challenges and poor pricing. Also, multiple versions could confuse users’ and developers’ experiences. Nonetheless, CCTP will resolve the challenge by delivering a native cross-chain USDC supporting burning and minting within the linked chains. 

Circle’s Progressive Expansion Beyond Ethereum Network

The integration portrays Circle’s progressive march, unlike the initial days when USDC availability was restricted to the Ethereum network. The restrictions compelled users desiring to transfer USDC to other chains to rely on a bridge. 

The Wormhole team illustrated that the bridge would allow the locking of native USDC on Ethereum to mint the derivative version on other blockchains. The process results in multiple bridging protocols leading to diversity in USDC derivative versions that occasionally confuses the end-users.

Circle would, in 2021, unveil Stellar-based stablecoin USDC. The company has expanded its scope beyond the two chains by unveiling the stablecoin in various compatible networks. A Tuesday, September 19 communication by Circle confirmed the unveiling of  USDC running on the Polkadot network. The launch raised the compatible networks to 14, with users and developers accessing the Polkadot USDC via the XCM protocol.

CCTP Usefulness in Resolving Complexity in Bridged USDC Versions

The Wednesday announcement indicated that users transferring native USDC across networks would deposit the coins within the Circle partner’s account. The account would support the users to withdraw the accounts into another network. The complexity would force the users to rely on bridged versions rather than utilize the native USDC version.

In late April, Circle would unveil the CCTP comprising smart contracts hosted on the application programming interface (API). The CCTP would accommodate burning USDC on one chain for its reminting in another without the necessity of depositing it to the Circle partner’s account. 

Circle restricted CCTP usage at the time of launch to Ethereum-Avalanche transfers. However, it would expand later to accommodate Optimism and Arbitrum networks. The USDC issuer confirmed harboring plans to expand the networks in 2023.

Circle’s Expands CCTP-Supported Networks to Resolve Transfer Challenges

The statement on September 20 confirms the CCTP integration into the Wormhole-base bridge interface. As such, Wormhole users can now execute native USDC transfers across the CCTP-supported networks.

The integration of Wormhole Bridge and CCTP portrays the continued devotion by Circle to expand its presence across multiple chains. The integration replicates Wanchan, which offers similar transfers. Further, the April 26 announcement identified LI.FI and LayerZero have declared their intention to implement the bridge integration. Further, Hyperlane and Celer confessed the CCTP integration in the future to ease liquidity and minimize confusion.

Editorial credit: Maurice NORBERT / Shutterstock.com