Stablecoins are a vital part of Web3 ecosystems, combining the benefits of blockchain transactions with price stability of fiat currencies. In fact, most successful Web3 platforms rely on stablecoins to support a wide range of activities. Today, we’re excited to reveal that COTI will integrate Circle’s Bridged USDC Standard into COTI V2.
USDC is a trusted and compliant stablecoin with widespread adoption across the Web3 space. The addition of USDC to COTI’s advanced privacy layer will help drive liquidity within the ecosystem, open the doors to new dApps and integrations, and set a precedent for subsequent stablecoin partners. As part of our longer-term vision, we are actively working to integrate additional stablecoins, including Djed, to further enhance liquidity, expand use cases, and provide users with greater flexibility in their transactions.
The Importance Of Stablecoins On COTI
While the significance of stablecoins is often overlooked, they are fundamental to the smooth operation of exchanges, marketplaces, DeFi protocols, and other critical applications.
As a popular stablecoin with high levels of liquidity, USDC will provide users a reliable fiat-backed, “hard peg” to the US dollar, helping bootstrap COTI’s DeFi ecosystem. This will enable a range of financial applications to thrive on the COTI network such as exchange, lending, and borrowing. USDC can help facilitate asset transfers between different networks and platforms, acting as a kind of common financial standard across dApps and chains and lowering the barriers for additional stablecoins to bridge or deploy directly on COTI V2.
Additionally, there are many other use cases that are enabled by stablecoins for example, when interacting with TradFi assets, including real-world assets (RWAs). In these cases, value sits off-chain and must be reflected accurately when traded to stablecoins. USDC’s backing and liquidity mean it consistently trades within hundredths of a cent of its $1 peg.
How The COTI USDC Bridge Will Work
The USDC bridge follows a tried-and-tested means of deploying value across chains:
- Users deposit USDC on the source chain into the bridge’s smart contract, locking it so that it cannot be accessed until required.
- An equivalent number of USDC tokens are minted on COTI V2 (these are called USDC.e on the COTI network)
- These USDC.e tokens are backed 1:1 by the USDC held in the smart contract, and can be used in any DeFi application or other service on the COTI network.
- When users want to bridge their USDC.e back to the source chain, they are burned on the COTI V2 side of the bridge, which trustlessly releases the same number of tokens to the user on the source chain side.
About USDC
USDC (USD Coin) has quickly become one of the most widely-used stablecoins in the crypto space with around 56 billion USDC currently in circulation. Every USDC token is 1:1 backed by cash or short-term US Treasuries, held with regulated financial institutions. The token, launched in 2018 by Circle and Coinbase under the Centre consortium, is issued within the framework of US financial laws, and is subject to regular audits.
For COTI updates and to join the conversation, be sure to check out our channels:
Website: https://coti.io/
X: https://twitter.com/COTInetwork
YouTube: https://www.youtube.com/channel/UCl-2YzhaPnouvBtotKuM4DA
Telegram: https://t.me/COTInetwork
Discord: https://discord.gg/9tq6CP6XrT
GitHub: https://github.com/coti-io
