In a recent social media announcement, Jeremy Allaire, CEO of Circle, declared a significant shift; the company’s U.S. dollar pegged stablecoin, USDC, will be launching natively on the Base network. This new variant will replace the existing US Dollar Base Coin (USDbC), used primarily as a stand-in by most common users.
The decision for the transition harks back to the initial launch of Coinbase’s Base network, on August 9, where no primary version of the USDC existed. Users weren’t able to deposit cash into a Circle account and receive equivalent USDC on Base. Base’s solution was to allow users to bridge USDC from Ethereum via an official bridge app, leading to the creation of the token “USDbC”, a counterpart backed by native USDC locked on the Ethereum network.
The announcement signaled Circle’s planned initiation of issuing USDC on Base, seeking to gradually diminish the need for a bridged coin backed by the Ethereum variant. The contract for this new token has already been introduced to Base. On the day of launch, the current USDbC can be redeemed for native USDC, with unspecified plans to work with ecosystem apps to ensure a smooth transition allowing liquidity providers to maintain liquidity for the new coin.
However, while this development reflects an advancement in the Base network’s functionality, underlying trust issues remain. Questions arise concerning the stability of the Base network after a hasty initial launch that failed to anticipate user requirements, such as native access to popular stablecoins like USDC. It also puts into focus the potential issues created from reliance on bridged tokens, such as potential speed and cost disadvantages.
The exact official launch date for the coin remains ambiguous, as indicated by Allaire, simply stating its occurrence will be “next week”. The Base network fared well during its inception, gaining over 136,000 active users on the day following its launch.
The touted “Superchain”, aiming to part govern alongside Base, Optimism, and other networks, was set into motion as Base pledged to share its revenue. The timeline for these events along with the present trust and implementation issues makes the coming weeks of crypto progress an intriguing period.
It is a noteworthy development to see the evolution of Base and similar networks, demonstrating an ongoing investing interest in sector growth and diversification. Like any investment, however, it involves risks, which readers should diligently research before making any decisions.
Source: Cointelegraph
