Erik Weijers, a month ago
Circle, the creator of stablecoin USDC, has launched a protocol that lets users transfer USDC between Ethereum and Avalanche. It will help increase user-friendliness and remove the risk of bridge hacks.
If you or I transfer money from our ING account to our ABN/AMRO account, we don't have to worry about the fact that there are two different banks. Something similar we would like to see for the future state of crypto, where - hopefully - the majority of people will interact with it. They should not need to worry about which chain they are on.
This is the promise of the new Cross-Chain Transfer Protocol (CCTP). Currently, there are many unofficial versions of USDC floating around on various chains, the result of tokens on one chain being bridged to another.
If you followed the news, especially in 2021, you know bridges have been vulnerable to hacks. Hackers have often found ways to remove locked coins from bridge contracts.
The CCTP protocol doesn't work with bridges but instead destroys the USDC tokens on one chain and mints them on another. Of course, this is less risky in terms of hacks - but comes with the price of centralization risk: you will have to trust Circle, the company behind USDC.
The CEO of the company behind USDC has hinted that he considers leaving the USA. The regulatory pushback in the USA against crypto has been so severe that the market capitalization of USDC has continued dropping in the past 12 months. There was a time when USDC was not far from overtaking USDT. Currently, USDT has a 80 billion market cap versus 30 billion for USDC.
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