In brief
- The USDC stablecoin will be available on the Solana blockchain.
- Solana sees USDC integration as an important step in building DeFi on the network.
- It’s also hosting a hackathon focused on Wormhole, its bridge to Ethereum.
The Centre Consortium, which was founded by payments platform Circle and cryptocurrency exchange Coinbase, announced today that it’s making Solana an official blockchain for its USDC stablecoin.
That means that USDC—already integrated with Ethereum and Algorand (and about to be integrated with Stellar)—is coming to Solana, a blockchain interested in attracting decentralized finance users looking for a network with higher speeds and lower costs than the second-largest crypto network by market cap, Ethereum. It’s one of the reasons that Solana, among many other blockchain networks, has earned the moniker of potential Ethereum “killer.”
To make the most of the USDC-Solana integration, Circle is partnering with crypto trading firm Alameda Research, crypto derivatives exchange FTX, and Solana-based decentralized exchange Project Serum to help put the USDC-SPL token in traders’ hands at the jump.
“It’s the fastest, cheapest stablecoin in the world, and will help bring that power to Serum,” said FTX founder and CEO Sam Bankman-Fried, referring to USDC. “Both FTX and FTX US will be supporting USDC-SPL through exchange deposits and withdrawals and their OTC desks, with Alameda committing to provide deep liquidity in it.”
Solana is a blockchain network that touts its inherent scalability, claiming to be able to handle up to 50,000 transactions per second compared to Ethereum’s 15 or so. Last summer, Solana raised $20 million in a funding round led by Austin-based Multicoin Capital. In April, the blockchain began adding stablecoins to its network, including the largest stablecoin by market cap Tether, and has made several moves since to better position itself to take on Ethereum in the DeFi sector.
Circle Chairman and CEO Jeremy Allaire thinks the Solana blockchain is a good fit with USDC, referring to it as a decentralized solution with “throughput that rivals most centralized financial market infrastructure.”
Solana co-founder Anatoly Yakovenko concurred, seeing the integration as a way to further reach into the decentralized finance sector, which allows crypto users to access loans and earn interest on holdings.
And while it first started making stablecoins available earlier this year, Solana clearly had its sights on USDC. Centre introduced USDC, a stablecoin pegged to the US dollar, in 2018. It’s now the second-largest stablecoin in reported market cap, at $2.7 billion, behind only Tether. That represents over 500% growth in the last year—moving in tandem with what is now a $10+ billion market for decentralized finance products.
“USDC is the lifeblood of the DeFi ecosystem and we couldn’t be more excited to welcome USDC to the Solana community,” said Yakovenko. “We’ve seen a flurry of inbound interest from teams looking to build DeFi products on Solana recently, and a trusted stablecoin like USDC is a critical building block for many of them.”
In addition to the obvious—people can easily use the USDC stablecoin on the Solana blockchain—the partnership will bring other benefits in the form of APIs so that other products—wallets, exchanges, and custodians, for example—can “support nearly instant cross-chain swaps of USDC.”
It’s not the first DeFi play for Solana, which recently launched Wormhole, a bridge to Ethereum that allows projects to jump onto Solana if/when Ethereum becomes too congested or costly.
It’s holding a hackathon for Wormhole development on October 28, with $250,000 in winnings at stake. The judges and speakers include not only Yakovenko and Fried, but also Aave founder Stani Kulechov, Compound founder Robert Leshner, and Multicoin Capital co-founder Kyle Samani.