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Ethereum (ETH): Circle approves a derivative-free Merge

wed 10 August 2022 ▪ 18:00 ▪

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According to official communications, Circle would approve everything related to the Ethereum Merge. On his blog, his administration even said that the Stablecoin giant “intends to fully and solely support the proof-of-stake (PoS) chain after the Merger ». But this support of the Merge is not 100%: indeed, Ethereum derivatives have not obtained the approval of Circle.

Circle will not support Ethereumés dés afterès Merge

Circle, a stab in the back of Ethereum?

As the Merge approaches, the entire crypto universe seems to be in a state of boiling. On the one hand, there are miners like Chandler Guo who are making sure not to fall into nothingness after the month of September. On the other hand, we have Vitalik Buterin who keeps coming to the forefront in order to approve his idea of switching to PoS.

Recently, or more precisely yesterday, Circle Internet Financial spoke out on the same topic of Merge. In his statement, it was said that he would not support Ethereum derivatives after the famous software update.

This is what tweeted Bloomberg this day :

« Circle, issuer of the USDC stablecoin, has stated that it will not support Ethereum derivatives when the blockchain network experiences a major software update that is expected to arrive next month. »

His team supported these statements with the following message :

« The USDC as an Ethereum asset can only exist in the form of a single valid ‘version’ ».

And yet he is pro-Merge

To say that just yesterday Circle promised full support for the Ethereum Merger. In his eyes, this step constitutes a crucial step in the ” scaling “from the Ethereum ecosystem, had reported Cointelegraph.

« The USDC has become a building block for Ethereum DeFi innovation. It has facilitated the adoption of L2 solutions and has helped to expand the set of use cases that today rely on the wide range of Ethereum’s capabilities. We understand the responsibility we have to the Ethereum ecosystem and the companies, developers and end users who depend on the USDC, and we intend to do the right thing. »

As a reminder, the USDC stablecoin is currently the largest dollar-backed asset issued on Ethereum. It is also the largest ERC-20 asset as a whole, given that its market capitalization is valued at $45 billion.

In other words, depriving yourself of Circle’s support would be harmful to Ethereum. If the divorce were to be pronounced, the DeFi applications on the blockchain will be affected, as will the way their value is stored there.

Fortunately, the Circle team is the understanding type :

« We understand the responsibility we have to the Ethereum ecosystem and the companies, developers and end users who depend on the USDC, and we intend to do the right thing. »

But this Cirlce support for The Merge also has conditions. Among other things, there is the merger between the execution layer of Ethereum and Beacon. To this is also added his intention not to take over a possible fork of the ETHW type.

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