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Facilitating USDC transfer to Arbitrum
Circle, Inc. today announced that its Cross-Chain Transfer Protocol (CCTP) has started working on Arbitrum, a Layer 2 scaling solution for Ethereum (ETH).
1/ Moving $USDC natively to @Arbitrum just got that much easier.#CCTP) is now live on Arbitrum, enabling direct transfers to-and-from @Ethereum and @Avax. #BuildOnCircle https://t.co/ry7mMMYFvX
— Circle (@circle) June 27, 2023
CCTP is designed to enable fast and secure transmission of USD-denominated stablecoin USDC, provided by Circle, across multiple chains including Ethereum, Avalanche (AVAX) and Arbitrum.
CCTP allows USDC transfers between different blockchain networks by burning USDC on the sending chain and minting the same amount on the receiving chain.
Conventionally, the method was to lock USDC on the sending side and mint on the receiving side, but the transfer can be done more efficiently than in this case.
Arbitrum is the third chain to support CCTP, following Ethereum and Avalanche.
With this, Arbitrum’s official cross-chain bridge, the Arbitrum Bridge, can now provide smooth USDC transfers to Arbitrum for apps that support CCTP within the Arbitrum ecosystem.
Developers can build apps on Arbitrum that offer cross-chain deposits, swaps, purchases, etc. on USDC.
Circle had just announced on the 1st that it would begin issuing USDC directly on Arbitrum.
connection: US Circle announces arbitrum support for stablecoin USDC
What is Layer 2 (L2)
A “second layer” blockchain. Writing all transaction histories to the main chain increases the load, slowing down processing speeds and increasing network fees. Therefore, by writing part of the transaction history in the off-chain or side-chain, it is expected to reduce the load on the main chain and improve the processing speed.
Cryptocurrency Glossary
Advantages of the Cross-Chain Transfer Protocol (CCTP)
Based on the Cross-Chain Transfer Protocol (CCTP), Circle says it can facilitate various functions such as trading, lending, payments, NFTs (non-fungible tokens), and games.
Examples include “cross-chain swap,” “cross-chain deposit,” and “cross-chain purchase.”
“Cross-chain swaps” explain that users can trade between cryptocurrencies that exist on separate chains, such as swapping ETH on the Ethereum chain for AVAX on Avalanche.
“Cross-Chain Deposits” will allow users to use USDC on Ethereum to hold positions on a decentralized exchange (DEX) built on Avalanche. In this case, the user does not need to switch wallets.
For “cross-chain purchases,” he cites the purchase of NFTs as an example. For example, using USDC on Avalanche, it will be possible to easily buy Ethereum-based NFTs on the decentralized exchange Uniswap and sell them on the NFT marketplace OpenSea.
CCTP has already been adopted by other bridge projects and interoperability protocols such as Celer Network, Li.Fi, Wormhole, O3 Labs, Wanchain and Router Protocol to enable USDC transfers over these platforms.
What are NFTs?
Abbreviation for “Non-Fungible Token”, a digital token that cannot be replaced and has a unique value. In addition to being used for exchanging “digital items” in blockchain games, it is also an epoch-making way for rights holders (creators) in the “secondary distribution market”, which was difficult to achieve with second-hand sales, as well as proof of ownership of high-priced art works. It is also attracting attention as a means of reduction.
Cryptocurrency Glossary
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