Native USDC as a Liquidity Layer for Cross-Chain Applications

Transcript

all right uh Hey guys so I'm Walker I'm a software engineer at Circle uh today I'll be talking about cctp which is our cross-chain transfer protocol um yeah so for the agenda we'll cover uh what is ccdp uh why we built it and how you as a developer can integrate okay so at a high level this is how cctp works there's Three Steps step one is you would call the smart contract on the source chain to burn some usdc step two is you will call Circles API

which basically listens to all events on the source chain and once they're finalized provides you with an attestation you would then take that at a station from our off chain API present it to the destination chain and that allows you to complete the mint um yeah so um currently uh cctp is live on three chains uh ethereum Avalanche and arbitrum and we're planning to launch on many other chains in the near future cool so why we built cctp um you heard from the the last speaker that all bridges suck

um I'm here to show you on my bridge but um Yeah we actually don't call cctp a bridge we we call it like a infrastructure for other Bridges um the problem that you know you're probably familiar with with existing lock-in mint Bridges is uh Honeypot risk so um in a traditional lock and mint Bridge you would lock some funds some say uscc on a source chain like ethereum and then that bridge will produce you a wrapped token which is just an IOU for the underlying collateral on ethereum um so if the contract on the source chain gets hacked uh all the tokens on the destination chain become worthless

um and you are exposed as a user to that risk for the whole duration that you hold the token in contrast with ccdp you're only exposed to risk for the duration of the bridging period because you receive native usdc as soon as we mint it to you uh which you can always you know redeem for real dollars from a bank account so that's honey pot risk next liquidity fragmentation so when these third-party Bridges you and IOU that IOU um will have a name like you know wrapped usdc on ethereum from Solana or something like that and that token is you know it's not compatible with all

the other wrapped variants produced by other third-party Bridges um so that limits the like size of Trades and like bridging transactions that you can do um then we have Capital efficiency so you know most of these fast Bridges they will have liquidity providers put up some collateral allowing users to bridge instantly and then the liquidity providers will settle using native bridges on the back end um this requires you know putting up collateral which is expensive and that results in higher fees for users um yeah so CCP obviously we're the only people with permission to burden mint usdc so there's no need to put up

collateral um added trust assumptions so if you trust usuc you trust Circle we are a centralized stablecoin uh therefore it kind of makes sense for us to build a centralized bridge and take advantage of all the trade-offs that come with that like lower fees and significantly less complexity uh like we don't need to write like complicated code for verifying Markle proofs or things like that are like smart contracts are very simple um yeah this is kind of similar to the last slide but uh just going through some of the design principles uh Native usdc everywhere unified liquidity in terms of speed we are faster in some

areas and slower in some areas than other Bridges so you know Arboretum Bridge or other optimistic Roll-Ups they take seven days to withdraw from the L2 to the L1 we take 15 minutes which is the time for the batch to be posted on if you're ml1 and like finalized so we're much faster let's so like you know hop for example they are a liquidity based bridge where you know LPS put up the assets for fast bridging and then settle using the native Bridges hop can use us instead of the Native arbitrum Bridge which allows settlement much quicker and therefore allows um you know lower fees

um in terms of interoperability many to many and extensible we are a generic message passing Bridge so it's not specific to any particular like evm or non-evm chain and we do have plans to to launch on non-evms including Solana soon yeah I'll just go through some possible use cases as I said it's a generic message passing Bridge so anything that you want Circle to attest to we will attest to um for example if you want to burn some usdc and mint it and then when it's minted like ensure that it gets deposited to a D5 protocol or like

transferred to another chain or something like that you can encode that in a generic message and we will sign it I talked about this but fast liquidity base bridging with CCTV settlement is something that you could build as like a third party bridge on top of ccdp um gasless token bridging so currently cctp charges zero fees but if you want to like use a provided ux to your users on top of cctp you could take these on either the source or destination chain

or both so you could you know have your contract on the source chain take a fee that represents the gas cost and the destination chain and like take a spread if you want um you could also be the relayer on both chains so Circle does not provide relayers but we provide all the infrastructure and yeah this is just an example of code like you write a contract that will call receive message on the destination chain and then atomically deposit it into some D5 protocol and we offer like a code path that ensures that this is only like only a particular address can call receive message so like someone else

can't just like front run your mint this is just the the transactions that you need to do so you need to approve or call permit on our bridge then call deposit for burn um then fetch the attestation and then call receive message yeah um that's pretty much it um wanted to open it up for Q a thanks it was pretty clear um if you say it's quite easy to it's quite generic it's just message passing why

are you not adding more l2s or blockchain what's taking you time I guess there is some infrastructure to be built to monitor so what other the cost implications of adding a new blockchain yeah launching on EVMS is pretty straightforward since all the smart contracts are the same launching on non-evms is fairly complicated um and you know it's a high security concern so um got to get the contracts audited and so forth sorry sorry this is probably fairly obvious

but you guys will be adding your OC to into this yeah yeah that's a good point um so technically the bridge can support any stable coin that's issued by Circle hi uh are there plans to integrate Phantom into cctp and could that fix the current debug of usdc on Phantom uh yeah I can't really comment on individual chains but um yeah sorry so you you mentioned you use the finality tag but not every change supports that so what do you use for

other chains that don't support that yeah um I mean we're not currently working on any chains that don't support that but yeah we want to make sure that whatever chain we use has some form of absolute finality not probabilistic if at all possible to our products uh so is there any incentives or grants to the implementing cctp to our products um I don't think so but uh yeah it's a

good question something we could look into I know that there have some been some grants on like individual chains okay good yeah all right thank you [Applause] [Music]