Tag: op mainnet

Circle Introduces Native USDC on OP Mainnet: What It Means for the Ecosystem

Circle has announced the upcoming launch of native USDC on the OP Mainnet. The announcement, part of Circle’s #StableSeptember series, outlines the benefits and changes that will accompany this development.

Native USDC: A New Standard for the Optimism’s OP Mainnet

According to the official blog post , USDC issued by Circle will become the “official form of USDC for the [OP Mainnet] ecosystem.” This move is expected to gradually replace the currently circulating bridged USDC liquidity originating from Ethereum.

The introduction of native USDC is poised to enhance the OP Mainnet’s financial infrastructure, potentially attracting more institutional investors and fostering greater liquidity. However, it remains to be seen how this will impact the broader stablecoin market and whether native USDC will become the de facto standard for the OP Mainnet.

Key Features and Benefits

The native USDC will offer OP Mainnet users several advantages:

Dollar-Backed Stability: The stablecoin is fully reserved and redeemable at a 1:1 ratio for US dollars.

Institutional On/Off-Ramps: The new form of USDC will facilitate easier access to institutional-level financial mechanisms.

Technical Details

Token Symbol for Bridged USDC from Ethereum: USDC.e

Token Address for Bridged USDC: 0x7f5c764cbc14f9669b88837ca1490cca17c31607

Token Symbol for Native USDC: USDC

Token Address for Native USDC: 0x0b2C639c533813f4Aa9D7837CAf62653d097Ff85

Transition and Liquidity

Circle and Optimism will collaborate to ensure a smooth transition of liquidity from the Ethereum-bridged USDC (now renamed as USDC.e) to the native USDC. The OP Mainnet bridge will continue to operate as usual, with no immediate changes planned.Ecosystem Expansion

Circle has been strategically expanding its USDC ecosystem across various platforms. In addition to the OP Mainnet, Circle has also minted native USDC on Coinbase’s Base, Solana, and primarily on Ethereum.

Recently, Circle entered into a partnership with Mercado Pago, Latin America’s largest fintech company, to meet the growing demand for trusted digital dollars in Chile. This collaboration aims to provide millions of users with access to USDC for seamless transactions.

Serving as a store of value akin to fiat USD, Circle has released a comprehensive guide detailing how to transfer USDC to Phantom, which is Solana’s premier web and mobile wallet.

Furthermore, Circle has introduced the Cross-Chain Transfer Protocol (CCTP), enabling the exchange of native USDC between supported networks such as Ethereum, Arbitrum, and Avalanche.

Optimism (OP) Announces Critical Fault Proof Upgrade Impacting Bridges and Exchanges

Optimism (OP), a leading Layer 2 scaling solution for Ethereum, is set to implement significant breaking changes to its Fault Proof system, which will directly affect bridges, centralized exchanges, and custom solutions that handle withdrawals. This development is crucial for stakeholders within the Optimism ecosystem, as they must adapt their systems to align with the new withdrawal verification process.

Overview of the Fault Proof System Update

The upgrade introduces a shift from the L2OutputOracle to a new system comprising the OptimismPortal and DisputeGameFactory. The L2OutputOracle, previously essential for the Proposer role in storing L2 state output proposals, will be entirely removed. In its place, developers will need to use the rootClaim of a dispute game to prove withdrawals during the first step of the two-step withdrawal process.

The OptimismPortal contract will experience minor changes as it now references the DisputeGameFactory contract instead of the L2OutputOracle. Developers must now search for recent DisputeGame contracts with the appropriate game type through the OptimismPortal to prove withdrawals. This shift enhances the security and decentralization of the withdrawal process but requires developers to update their client code accordingly.

Impact on Bridges and Centralized Exchanges

The transition to Fault Proofs necessitates updates in the logic for handling withdrawals. Most teams leveraging the Optimism SDK or Viem will need to update their software versions prior to the Sepolia release. The Optimism SDK, for instance, requires an upgrade to version 3.2.0 or higher, which maintains API compatibility and integrates the new logic automatically once the Fault Proof upgrade is detected.

For those using Viem, the latest version breaks the API, necessitating the use of an experimental decorator supporting fault proofs. Upon fault proofs being mainstreamed on the Mainnet, a switch to the stable API will be recommended.

Monitoring System Changes

The Withdrawal Monitor and Dispute Monitor services have undergone updates to accommodate the new fault proof system. The Withdrawal Monitor service, crucial for the two-step withdrawal system, has become slightly slower at startup but more reliable and compatible with a broader range of infrastructure. It remains fully backward compatible with existing systems.

The Dispute Monitor service, on the other hand, will replace the current Fault Monitor to detect invalid output proposals. Teams currently running the Fault Monitor will need to switch to the new service and update their alerting systems to stay in compliance with the new upgrade.

Next Steps for Developers and Operators

Developers and operators within the Optimism network are advised to familiarize themselves with the upcoming changes by reviewing the detailed documentation provided by Optimism. This includes understanding the three main components of the Fault Proof System—Cannon FPVM and Mips.sol—and preparing their systems for the transition.

The Fault Proof updates are scheduled to launch on the testnet on March 19, 2024. It is crucial for all parties involved to prepare their systems in advance to ensure seamless integration with the new protocol and avoid any disruptions to their operations.

Optimism continues to provide developer support for those experiencing difficulties during the transition. The proactive engagement and detailed documentation reflect Optimism’s commitment to maintaining a robust and developer-friendly ecosystem.

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