USD Coin (zkSync)

USDC

USDC is a centralized stablecoin backed by USD reserves held by a licensed custodian (Circle).

Risk Rating
Best
$1.00
-0.08%
Summary
What we like
Provides easy on-ramp and off-ramp to convert your USD into digital dollars that is backed 1:1 by underlying reserves.
What we like less
USDC transferred through the zkSync bridge requires more trust assumptions as it secured by a 4/7 multisig. Further, Circle custodies the deposited USD and controls the minting and redemption of USDC. Open to censorship as Circle can blacklist any USDC address at will.
What it means for you
USDC is a highly liquid instrument to hedge your portfolio in volatile market conditions and also an easy way to put USD to work for you in DeFi.
Information
Blockchain
  • zkSync Era
Info
Key Metrics
  • Market Cap: $33.6B
  • Fully Diluted Valluation: $33.6B
  • FDV / MC: 1
  • Ranking inside Exponential (among stables): #2
  • Circulating Supply: 33,594,738,528
  • Total Supply: 33,595,373,402
  • Volume (24H): $3.9B
  • ATH: $1.17 (05/08/2019)
  • ATL: $0.88 (03/11/2023)
Risk Assessment
Best
Asset Strength

USDC is a large-cap, fully collateralized asset. This asset depends on a centralized entity for custody services. This asset is exposed to the underlying risks of zkSync Bridge, a protocol rated as Average.

USDC is a stablecoin that usually trades within 20bps of its peg to USD, which makes it a solid store of value.

Asset Tokenomics

USDC has an uncapped supply but has inflation control or burn mechanisms in place. USDC on Arbitrum is backed 1:1 by USDC locked in the Arbitrum bridge on the Ethereum chain. USDC is backed 1:1 by USD reserves held with a licensed custodian (Circle). USDC is fully redeemable for its USD reserves, providing an effective mechanism to retain the peg to $1.

Dependencies

zkSync Bridge

Things to know about USDC

Who invented USDC?

USDC launched on the Ethereum mainnet in September 2018 as a partnership between Circle and Coinbase through the co-founding of the CENTRE Consortium. Customers on Coinbase with USD accounts can exchange 1 USDC for 1 USD and vice versa. USDC are issued by financial institutions and established fintech firms who have met its membership criteria.

How does USDC work?

USDC are backed 1:1 by USD reserves held with a licensed custodian (Circle). The process of minting USDC tokens involves interacting with CENTRE contracts which manage the minting and burning of USDC. First, a user sends USD to a licensed token issuer's bank account. Second, the issuer uses the USDC smart contract to mint an equivalent amount of USDC. Third, the newly created USDC are sent to the user's on-chain address, while the deposited USD are held in reserve. The process for redeeming USDC for USD is just the reverse process.

How secure is USDC?

USDC is a centralized stablecoin that is perceived as safer and more transparent than USDT as its reserve composition only consists of cash and short-term U.S. government bonds. USDC regularly undergoes audits and publishes monthly reserve reports and attestations that prove the amount of USD reserves are greater than the amount of USDC in circulation. Nonetheless, USDC has the ability to "blacklist" any of its associated addresses at will. When a USDC address is blacklisted, it can no longer receive USDC and all of the USDC controlled by the address can no longer be trasnferred on-chain.