Aleph Zero EVM will now benefit from Circle’s official Bridged USDC Standard. This development enhances our ecosystem by reducing liquidity fragmentation and providing a clear path toward native USDC adoption.

Let’s dive into the positive effects this integration will bring to the ecosystem and the builders within it.

What is the Bridged USDC Standard?

The Bridged USDC Standard is a framework for implementing USDC (USD Coin) to minimize fragmentation and open a way for Circle to take over ownership of the bridged USDC smart contracts, upgrading it into native USDC.

The standard was recently made available via the Arbitrum ecosystem and has already been deployed on both the Aleph Zero EVM Mainnet and Testnet.

What does Bridged USDC Standard adoption mean for Aleph Zero?

Adhering to the Bridged USDC Standard will guarantee less liquidity fragmentation. Aleph Zero EVM will benefit from a unified liquidity pool, minimizing the challenges often caused by fragmented liquidity across different chains and bridging standards.

One of the most exciting aspects is the ability for Circle to eventually upgrade bridged USDC to native USDC, shortening the time for Aleph Zero to benefit from this natively issued stablecoin. This ensures deeper integration and more seamless interactions within our ecosystem. By adhering to this standard, Aleph Zero EVM can unlock a ton of new potential.

For developers, this means that you can build on bridged USDC already, with the assurance that the contract address will remain the same after the upgrade to native USDC. Additionally, no code changes will be needed—providing long-term stability and flexibility.

Overall, Bridged USDC Standard adoption will bring heightened interoperability, solid security in cross-chain transactions, and of course, standardization where users and developers follow a unified approach to handling liquidity, ensuring smooth integration with DeFi protocols, DApps, and other blockchain services. 

Most importantly, users will be able to store, pay, trade, borrow, and lend using bridged USDC, which will automatically become native upon upgrade—there’ll be no need to swap to a new asset.

What’s the path for bringing native USDC to Aleph Zero EVM?

The main benefit of adopting the Bridged USDC Standard is bringing native USDC to Aleph Zero EVM. 

Circle has defined a pathway to making this happen and it works as follows:

1. Bridged USDC Contract Deployment: Initially, a bridged USDC contract will be deployed on Aleph Zero EVM. That’s done by now.
2. Liquidity Bootstrapping: Liquidity will be bootstrapped by bringing USDC to Aleph Zero via Arbitrum’s canonical bridge, which for Aleph Zero can be accessed at canbridge.alephzero.org.
3. Adoption: As the bridged USDC gains traction—evaluated by factors such as supply, number of holders, and app integrations—Circle will be able to eventually reach an agreement with Aleph Zero to transfer ownership of the bridged USDC contract. It’s important to note that while Circle assesses these metrics, there are no thresholds set, and it’s always Circle’s decision whether to upgrade the contract to native USDC.
4. Seamless Upgrade: Once ownership is transferred, Circle will perform an in-place upgrade of the bridged contract to native USDC. The USDC that was locked on the origin chain will be burned, ensuring a seamless transition without the need for migrations or asset swaps.

By adopting this standard, Aleph Zero EVM is ensuring a future-proof path for seamless continuity in liquidity, user balances, and application integrations, along with a smooth developer experience, and stronger integration with the broader blockchain world.