USDC ushers in version 2.0, and the stablecoin market structure may change due to DeFi

Editor's Note: This article comes fromBabbitt Information (ID: bitcoin8btc), translation: overnight porridge, published with permission.

Editor's Note: This article comes from

Babbitt Information (ID: bitcoin8btc)

Babbitt Information (ID: bitcoin8btc)

Over the weekend, Circle and Coinbase jointly announced a major upgrade to the USD Coin (USDC) protocol and smart contracts, which adds additional security infrastructure to the USDC smart contracts. As of now, USDC, as a regulated stablecoin, has a market capitalization of more than 1.4 billion U.S. dollars, temporarily ranking second on the stablecoin track.

We know that for the blockchain digital asset industry, stablecoins are a channel between fiat currencies and cryptocurrencies. Its importance is self-evident. For a long time, the centralized stablecoin USDT issued by Tether has been ruling With this market, according to the statistics of qkl123.com, the current circulating market value of USDT has exceeded 10 billion US dollars, far ahead of other stablecoins in the market.

With the rise of DeFi, and the acceptance of USDC in the DeFi market is much higher than that of USDT, the pattern of the stablecoin market may undergo major changes."Let's take a look at the specific improvements of USDC 2.0:

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To trade stable coins such as USDT and USDC on the Ethereum network, it is necessary to consume what is called "gas fee".

Most digital wallets currently require users to purchase and hold ETH to pay for these "gas fees". This complexity undoubtedly hinders the widespread adoption of stablecoins.

Through this innovation, digital wallet and application developers can build a user experience closer to existing mobile payment applications, and users will be able to use USDC to send and receive USDC payments on a peer-to-peer basis without using ETH.

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Improvement 2: Improved security and management

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Availability and support of USDC 2.0

It is reported that the new USDC smart contract and protocol improvements have been released on August 27, and any wallet developer can start to take advantage of the gas-free sending function, and Center Alliance members Circle and Coinbase intend to introduce support for these in their respective products and services Support for protocol improvements, any third-party developer can now integrate and support this using the public USDC smart contract.

Additionally, the newly enabled USDC 2.0 changes are fully backwards compatible and have no impact or changes to wallets, exchanges or applications currently integrated with USDC, nor to existing USDC holders.

Can the outbreak of DeFi help USDC surpass USDT?

In essence, both USDC and USDT are centralized stablecoins, but because USDC is a compliant stablecoin with regulatory guarantees, DeFi applications and users are generally more willing to accept USDC instead of USDT.

For example, Makerdao has adopted USDC as the MCD collateral asset, but has yet to pass the USDT proposal.

For example, on lending platforms such as Aave and Compound, the loan volume of USDC far exceeds that of USDT.

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(Picture: Lending interface of the Compound platform)

For some new IDO projects, the tokens they choose to finance are either ETH or USDC.