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This is CCTP V1 (Legacy) version. For the latest version, see CCTP.

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Overview

Cross-Chain Transfer Protocol V1 is a permissionless onchain utility that facilitates USDC transfers securely between blockchain networks via native burning and minting. Circle created CCTP to improve capital efficiency and minimize trust requirements when using USDC across blockchain networks. CCTP V1 enables developers to build multichain applications that allow users to perform 1:1 transfers of USDC securely across blockchains.
Note: CCTP V1 only supports Standard Transfer, constrained by blockchain finality on the source blockchain. Later CCTP versions support Fast Transfer and Hooks, in addition to also supporting Standard Transfer.

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Understanding the Problem

Blockchain networks often operate in siloed environments and cannot natively communicate with one another. While some ecosystems, such as Cosmos, use built-in protocols like the Inter-Blockchain Communication (IBC) protocol to enable data transmission between their appchains, direct communication between isolated networks, such as Ethereum and Avalanche, remains infeasible. Traditional bridges exist to address this limitation by enabling the transfer of digital assets, such as USDC, across blockchains. However, these bridges come with significant drawbacks. Two common methods, lock-and-mint bridging and liquidity pool bridging, require locking USDC liquidity in third-party smart contracts. This approach reduces capital efficiency and introduces additional trust assumptions.

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Design Approach

As a low-level primitive, CCTP V1 can be embedded within any app or wallet - even existing bridges - to enhance and simplify the user experience for cross-chain use cases. With USDC circulating across a large number of blockchain networks, CCTP V1 can connect and unify liquidity across disparate ecosystems where it’s supported. CCTP V1 is built on generalized message passing and designed for composability, enabling a wide range of use cases. Developers can extend its functionality beyond just moving USDC between blockchains. For example, you can create a flow where USDC is sent across chains and automatically deposited into a DeFi lending pool after the transfer, allowing it to generate yield in an automated manner. This experience can be designed to feel like a seamless, single transaction for the end user.

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How CCTP V1 works

Standard Transfer is the default method in CCTP V1 for transferring USDC across blockchains, which involves burning USDC on the source chain and minting it on the destination chain. It relies on transaction finality on the source chain and uses Circle’s Attestation Service to enable standard-finality () transfers. The process includes the following steps:
  1. Initiation. A user accesses an app powered by CCTP V1 and initiates a Standard Transfer of USDC, specifying the recipient’s wallet address on the destination chain.
  2. Burn Event. The app facilitates a burn of the specified USDC amount on the source blockchain.
  3. Attestation. Circle’s Attestation Service observes the burn event and, after observing hard finality on the source chain, issues a signed attestation. Hard finality ensures the burn is irreversible (about 13 to 19 minutes for Ethereum and L2 chains.)
  4. Mint Event. The app retrieves the signed attestation from Circle and uses it to mint USDC on the destination chain.
  5. Completion. The recipient wallet address receives the newly minted USDC on the destination blockchain, completing the transfer.
Standard Transfer prioritizes reliability and security, making it suitable for scenarios where finality wait times are acceptable.

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Use Cases

CCTP V1 enables developers to build novel cross-chain apps that integrate functionalities like trading, lending, payments, NFTs, and gaming, while simplifying the user experience. Below are some practical examples of how you can leverage CCTP V1 in your applications, either directly or indirectly by routing USDC behind the scenes:

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Cross-chain rebalancing

Market makers, fillers/solvers, exchanges, and bridges can use CCTP V1 to manage liquidity more efficiently. By securely rebalancing USDC holdings across blockchains, you can reduce operational costs, meet demand, and take advantage of market opportunities with minimal latency.

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Cross-chain swaps

With CCTP V1, users can quickly swap between digital assets on different blockchains by routing through USDC. Users can also swap for USDC and automatically trigger subsequent actions on the destination chain, enabling seamless cross-chain transactions.

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Cross-chain purchases

Automate cross-chain purchases with CCTP V1. For example, a user can use USDC on one chain to purchase an NFT on a decentralized exchange on another chain and list it for sale on an NFT marketplace. When the transaction is initiated, CCTP V1 routes USDC across chains to buy the NFT and opens the listing on the marketplace—all in one streamlined flow.

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Simplify cross-chain complexities

Simplify the cross-chain experience by using USDC as collateral on one chain to open a borrowing position on a lending protocol on another chain. With CCTP V1, USDC can move quickly between blockchains, allowing users to onboard to new applications without switching wallets or managing multi-chain complexities.