Stablecoin issuer Circle has unveiled a significant upgrade, version 2.2, aimed at reducing transaction fees for its USDC (USD Coin) and EURC stablecoins by approximately 7%. The upgrade, designed to enhance transaction efficiency on Ethereum Virtual Machine (EVM) blockchains, introduces several key features to improve user experiences and reduce network gas fees.
New Features in USDC and EURC:
The v2.2 upgrade brings six key changes, with a focus on optimizing USDC and EURC functionality on EVM blockchains. One notable feature is the adoption of EIP-1271, allowing signature validation from smart contract wallets. This enhancement enables transfers from smart contract wallets, expanding support for account abstraction and allowing users to pay network gas fees in USDC and EURC.
Circle CEO Jeremy Allaire highlighted the significance of this upgrade, stating, “USDC is becoming more efficient, with a new v2.2 upgrade (users don’t have to do anything), which will reduce gas costs for every transaction, improve support for using USDC with account abstraction, and bolster security on EVM chains.”
Cost Reductions and Efficiency Improvements:
The upgrade optimizes the blocklist check process in USDC and EURC smart contracts, aiming for a more efficient lookup process and substantial reduction in network gas fees for common functions such as transfers, payments, or trades. The estimated cost reductions range between 6% and 7% for these functions.
Enhanced Security Measures:
The v2.2 upgrade also introduces measures to improve resilience against forks of EVM blockchains. Smart contracts will now dynamically infer the official chainID, providing protection against potential misuse of funds on unofficial forks. Additionally, blocklist checks have been removed from functions that do not involve fund movements, resulting in further gas fee reductions.
Backward Compatibility and Rollout Plan:
Importantly, the v2.2 upgrade is fully backward-compatible, requiring no action from developers or users. The phased rollout will commence on the Avalanche Fuji testnet, with plans to complete the upgrade across various blockchains in the coming months. The Ethereum mainnet and other key platforms are expected to see the implementation of this upgrade in January 2024.
Circle’s commitment to improving efficiency, reducing transaction costs, and enhancing security measures reflects the ongoing evolution of stablecoin technology to meet the needs of users in the rapidly evolving blockchain ecosystem.