Yesterday, the Stellar Network officially announced that they will be supporting the USDC coin. This partnership means that it will now be possible to send a well known, stable, US dollar-denominated asset anywhere in the world for fractions of a cent with a transaction that settles in seconds. In this post, I'll discuss some of the advantages that USDC on Stellar has and show how you can use USDC on Stellar.
Why This Is Big News
As many of you know, I believe that a reliable stablecoin is the key to mass crypto adoption and DeFi specifically. When I first got started in crypto, I thought stable coins on Ethereum were unbeatable. Back then, transaction fees were just a few cents, and I liked that the stablecoins had much less volatility than traditional coins like BTC or BCH.
However, as the recent (ongoing) spike in gas prices has shown us, the Ethereum network has lately become congested and transaction prices have skyrocketed. A partnership between the Stellar network and USDC (Circle) is fantastic because it allows us to have all of the advantages of a stablecoin, but on a network that is faster and cheaper than Ethereum. True, there are other forms of Stablecoins on chains other than Ethereum, but I think that Stellar and USDC have significant advantages. For example the SLP version of Tether on BCH does have low fees, but the block time of 10 minutes is significantly greater than the few seconds that Stellar uses.
As of 2-3-2021, the median ETH transaction fee is hovering around $8 while Stellar is less than a fraction of a cent. Additionally, ETH wait times have skyrocketed due to congestion while Stellar confirms in less than a few seconds. Taken together, I think the lower fees, as well as the higher transaction speeds, will be a huge benefit for people who wish to make smaller, frequent cryptocurrency transactions a part of their everyday life.
Where To Get It
If you are interested in using USDC on Stellar, there are a few ways you can get started. If you have the Lobster wallet, you can Exchange XLM for USDC right inside of the app. Or, if you prefer, you can use exchanges such as StellarTerm or StellarX. Interestingly, I found that StellarTerm had processed over $27,000 worth of Stellar-USDC trades in the past 24 hours which shows strong demand considering that the USDC partnership was just announced yesterday.
One thing to be aware of is that since USDC operates on several blockchains, its important to make sure you send the right USDC to the right address. Stellar based USDC should go to a Stellar compatible wallet while Ethereum based USDC should go to a Eth based address.
I am fully aware that Stellar does not have the extensive availability of DeFi applications that the Ethereum network has, but I certainly view this partnership between Stellar and USDC as a momentous step forward. With a reputable stablecoin like USDC, it is possible that Stellar could begin developing DeFi applications, but even if Stellar doesn't “de-throne”, ETH I believe that this partnership still represents an incredible step forward even for things as simple as sending a dollar-denominated asset anywhere in the world in less than a few seconds for a fee of less than a fraction of a cent.
Thanks for reading!