Here’s What You Need to Know About Circle’s v2.2 Upgrade for USDC and EURC Stablecoins
Stablecoin issuer and fintech firm Circle has announced the launch of a new v2.2 upgrade to USDC and EURC. It is aimed at significantly reducing gas costs, improving support for account abstraction, and further strengthening transaction security on EVM blockchains.
This phased rollout is expected to be completed over the next few months.
The USDC and EURC smart contracts will undergo six modifications, all incorporated in a unified v2.2 upgrade for each supported EVM blockchain. This upgrade is fully backward-compatible, introducing no breaking changes to existing integrations. The upgrade has been audited by Halborn, a prominent third-party blockchain security firm.
Six New Changes to USDC and EURC Smart Contracts
The first major improvement is geared towards enabling signature validation from smart contract wallets. To achieve this, USDC and EURC will adopt EIP-1271 to allow authorized transfers to be used from a smart contract wallet in addition to a private key wallet.
This change, aligned with the growing trend of account abstraction in the EVM ecosystem, enhances user experiences. Developers, on the other hand, will be able to create products enabling users to pay network gas fees using USDC and EURC, according to the official announcement.
In the second improvement, Circle focuses on enhancing the blocklisting check efficiency in USDC and EURC smart contracts. With v2.2, the stablecoin issuer plans to optimize the blocklist state storage, significantly reducing network gas fees for various functions like transfer, transferFrom, transferWithAuthorization, receiveWithAuthorization, burn, and mint.
This optimization results in a 6-7% cost reduction for common use cases, such as transfers or trades, and a 3-4% decrease in network gas fees for developers and users of the Cross-Chain Transfer Protocol (CCTP) when burning and minting USDC across blockchains.
The third update focuses on enhancing resilience against forks. Circle officially supports Ethereum PoS for USDC and EURC issuance, ensuring a 1:1 redemption for USD and EUR. The company is implementing a change on the USDC and EURC smart contracts that will dynamically infer the official chainID instead of setting it manually. Such a move will prevent USDC and EURC transactions on unofficial forks and ensure security against potential risks.
The fourth change is to remove the blocklist check from functions that don’t move funds. Circle said this step will result in a further reduction of network gas fees when using USDC and EURC.
The fifth improvement deals with skipping the timestamp check when the deadline is set to the maximum amount, while the sixth one involves the one-time rename for the EURC token symbol. The latter will only happen once as part of this upgrade.
IPO in 2024
Circle is reportedly exploring the possibility of becoming a publicly traded company in the early months of 2024.
Although there’s no official confirmation, CEO Jeremy Allaire previously expressed the intention to become a publicly traded entity shortly after a failed SPAC deal with Concord last year.
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