In September 2023, Circle announced the launch of native USDC on the Optimism network. This means there are now two distinct versions of USDC coexisting on the same blockchain. This article explains how USDC works and the implications of this update.
How Is USDC Issued?
Each USDC token is backed by $1 in reserves. Circle, the company responsible for safeguarding these reserves, mints the corresponding tokens. When users deposit USD into Circle’s bank accounts, Circle issues USDC and sends them to the depositor’s wallet. Conversely, users can redeem USDC for USD by sending tokens back to Circle.
Which Blockchains Support Native USDC?
Circle currently supports USDC issuance across 15 blockchains. Tokens directly issued by Circle are called "native" USDC. While this covers major networks, many smaller chains rely on bridged versions. For example, protocols often bridge USDC from Ethereum to unsupported blockchains. Bridged tokens are non-native.
Previously, Optimism only had bridged USDC (USDC.e). However, Circle recently began minting native USDC on Optimism, leading to two versions:
- Native USDC: Directly issued by Circle.
- USDC.e: Bridged from Ethereum.
Will USDC and USDC.e Coexist Indefinitely?
Native USDC is the official and safer option, as it eliminates bridge dependencies. Over time, USDC.e may phase out in favor of native USDC. During this transition:
- Verify which version you hold.
- Confirm the recipient platform supports your USDC type before transferring.
👉 Optimism’s native USDC offers enhanced security compared to bridged alternatives.
FAQ
1. Which USDC version does Lemon accept?
Lemon only supports native USDC deposits via Optimism. Sending USDC.e may cause delays, extra fees, or lost funds.
2. Why does native USDC matter?
Native tokens reduce reliance on third-party bridges, lowering risks like smart contract vulnerabilities.
3. How do I identify USDC.e vs. native USDC?
Check the token contract address:
- Native USDC: Optimism’s official listing.
- USDC.e: Bridged (originated from Ethereum).
4. Will USDC.e lose value?
No, but liquidity may shift to native USDC as adoption grows.
5. Can I convert USDC.e to native USDC?
Yes, via decentralized exchanges (DEXs) or bridging back to Ethereum.
Key Takeaways
- Native USDC = Directly issued by Circle; safer.
- USDC.e = Bridged; may phase out.
- Always confirm compatibility before transferring.
Optimism’s shift to native USDC marks a step toward streamlined stablecoin usage. 👉 Explore secure DeFi options for managing USDC assets.