Coinbase and Circle have jointly released an upgraded version 2.0 of their popular USDC stablecoin. The major upgrade to the USD Coin protocol and Smart Contracts is aimed at tackling high gas fees by allowing developers to use USDC in payments and peer-to-peer transactions. It will also allow users to delegate the high gas fees to other wallets or otherwise allow them to take fees in USDC.
The updated version is released right on time purposefully when the market cap of USD Coin surpasses $1.4 billion and over $90 billion in the on-chain transaction volume. The USDC upgraded version was scheduled to go live on August 27.
There are high transaction costs involved in making any USDC transactions on the Ethereum network. To pay these transaction costs, which are also termed as “gas fees,” users required to keep a minimum balance of Ether in their wallets, which created confusion. The higher gas fees also caused hindrance to the mainstream adoption of USDC stable coins for online transactions.
To mitigate such complexities, the newly released USDC version 2.0 introduces “Gasless Sends” that will enable wallet developers to eliminate the complexities of paying higher gas fees, and delegate their payments to another wallet address. Developers will be allowed to pay the gas fees themselves on behalf of the customers, or they may hire third-party providers to pay the fees, or even they may deduct the related fees in USDC.
With this new fee distribution mechanism, the USDC version 2.0 will roll out a set of on-chain multiple signature contracts that will shift off-line human processes into those newly created multiple on-chain infrastructures. The multi-signature contract will also ensure security at the administrative level by allowing a greater amount of decentralization across all the administrative sectors throughout the network.
To be more precise, the new upgrade in the USDC protocol will allow the users to complete the entire transaction without ETH. However, it is not possible to eliminate the gas fees totally because the Ethereum network will still need them. Therefore, it will simply transfer those fees and then pass them to the actual users via a currency swap. However, with the latest upgrade, there will be no change to the existing wallets, applications, or exchanges that are currently integrated with USDC.
The USDC 2.0 is aimed at establishing a standard for fiat currencies on the internet by adding a layer of security to the USD Coin Smart Contract protocol. With this innovation, the wallet developers will be able to provide intuitive user experiences that are no lesser than what the existing mobile applications can provide; users can receive and send USDC payments on a peer-to-peer basis with fees solely expressed and paid in USDC. The innovation will also limit the manual workload and remove potential off-chain errors to a great extent.