You may be asking - what is native USDC? Why is it issued on the Noble blockchain? How is native different from other bridged forms of USDC currently held by users in the Cosmos ecosystem? Why is native USDC needed to accelerate Cosmos’ technical growth and adoption?
We have answers.
Before Noble, users and appchains in Cosmos needed to rely on bridges to access USDC - that is, USDC issued on Ethereum was brought to Cosmos permissionlessly via bridge protocols, such as Axelar and Gravity. While expedient, bridging brought additional costs, complexity and barriers to USDC liquidity in Cosmos.
Enter Circle and Noble.
Noble is an appchain purpose-built for native asset issuance in Cosmos and the boundless Inter-Blockchain Communication (IBC) ecosystem.
Dozens of appchains will be able to directly access native USDC via Noble as the issuance hub in Cosmos. Users will be able to mint and redeem USDC from Circle directly on Noble in the same way as they do on Ethereum or other chains where USDC is natively issued.
Over time, we expect native USDC liquidity will proliferate via secure and stable IBC connections to dozens of sovereign Cosmos appchains, including dYdX, Osmosis and others. In addition, Noble will be the access point to the Cosmos ecosystem for institutional customers of Circle.
Overall, native USDC provides 2 key benefits for users:
✅ Fully reserved and always redeemable 1:1 for US dollars
✅ Enables institutional on/off-ramps
On launch day, stay tuned for details on how to easily get access to USDC and begin trading, borrowing, lending, and more.
Token Symbol: USDC
Token Denom: uusdc
There are currently over 100 different bridged forms of USDC within the Cosmos ecosystem (h/t to @NumiaData for the data). Why? It’s a combination of different bridge protocols and the complexities of IBC routing. Regardless, it has been an enormous UX challenge.
Through enhancements made to the user experience of the IBC protocol, users can seamlessly send Noble USDC between appchains without losing the fungibility of the native USDC asset.
For example, if a user sends USDC from Noble to Osmosis via IBC, then takes that asset to dYdX, the asset is no longer fungible with USDC sent directly from Noble. While IBC paths ensure a stable connection to the native asset on the origin (or issuance) chain, it can also create complexities for the user if the path becomes more than 1-hop away from the origin chain.
To solve this UX challenge, Noble leverages packet-forwarding technology to enable asset transfers between IBC-connected chains in “1-click”. When a user wants to send their asset from one chain to another, the asset is routed through Noble, thus ensuring a consistent 1-hop route for USDC among different IBC paths. To learn more about the IBC packet-forward middleware, and for a more extensive deep dive into IBC, check out this article co-authored with the team at Skip.
Here are some scenarios:
1. User wants to send USDC from Noble to Osmosis:
Noble (source and origin/issuance chain) → Osmosis (destination chain)
2. User wants to send IBC-transferred USDC from Osmosis to dYdX:
Osmosis (source chain) → Noble (origin/issuance chain) → dYdX (destination chain)
3. User wants to send IBC-transferred USDC from dYdX to Osmosis:
dYdX (source chain) → Noble (origin/issuance chain) → Osmosis (destination chain)
The UX is the same for all transfers due to packet-forwarding technology - a 1-click experience!
As appchains and IBC connections proliferate, we expect there to be hundreds and eventually thousands of source and destination chains routing assets through Noble, providing the ecosystem with a simple, safe and seamless user experience.
We’re very excited about what native $USDC via Noble means for the Cosmos ecosystem!
Native USDC has been over a year in the making as a result of close collaboration between core Cosmos organizations including Noble, Strangelove Labs, Osmosis, and dYdX, among others. Multiple pieces came together to make this launch successful, including multi-stakeholder coordination, IBC protocol engineering, multiple audits, testing frameworks and more.
Stay tuned for the launch, and for the proliferation of liquidity in Cosmos. ✨