One of the leading stablecoin issuers in the market, Circle, has announced a new upgrade to reduce transaction fees for USDC by approximately 7%.
This upgrade, version 2.2, is related to USDC and its digital euro counterpart, EURC, and significantly enhances transaction efficiency on blockchains compatible with the Ethereum Virtual Machine (EVM).
The new features of USDC and EURC
Circle’s latest upgrade builds upon the expansion of the USDC stablecoin, incorporating a total of six major changes. Notably, it enables signature verification from smart contracts using EIP-1271. This feature allows the transfer from smart contracts to private keys, enhancing support for account abstraction. This is a significant move to improve the user experience within the EVM ecosystem, allowing users to pay network gas fees with USDC and EURC.
Circle’s CEO, Jeremy Allaire, stated:
“USDC is becoming more efficient. With the new v2.2 upgrade (users don’t have to do anything), it will reduce gas costs per transaction, enhance USDC support with account abstraction, and improve security on the EVM chain.”
Furthermore, this upgrade optimizes the blocklist verification process in USDC and EURC smart contracts, aiming for more efficient lookup and a significant reduction in gas fees for various functions. Estimated fee reductions range from 6% to 7% for common functions like transfers, payments, or transactions.
Circle enhances security for the stablecoin
The upgrade also introduces measures to improve resilience against forks of blockchains running on the EVM. A new change in the smart contract allows flexible inference of the official chainID, thereby protecting users from potential fund theft on unofficial forks.
Another noteworthy change is the removal of blocklist checks from unrelated functions to money transfers. This change will further reduce gas fees when using USDC and EURC, with estimated gas savings of about 7.34% for approvals and around 3.5% for grant-related functions.
Upgrade v2.2 is fully backward-compatible and does not require developers or users to take any action. The phased deployment begins on the Avalanche Fuji testnet, with plans to complete the upgrade on various blockchains over the next few months.
The Ethereum mainnet and other major platforms are expected to witness this upgrade in January 2024.