Arbitrum said it has worked with stablecoin issuer Circle to support the use of bridged USD Coin (USDC) as a custom gas token for Orbit Chains, according to an August 7 statement shared with CryptoSlate.
The Ethereum-based scaling solution stated that this development is part of a broader set of initiatives it is currently pursuing with Circle.
Arbitrum is the largest Ethereum Layer 2 blockchain network, with the total value of assets locked on it at $3.3 billion, according to data from DeFiLlama.
The network’s native ARB token hit a low of $0.4317 on August 5, amid a broader market decline that resulted in more than $1 billion in liquidations.
Orbit Chain Gas Costs
Introduced in March 2023, Orbit Chains enable the creation of highly customizable networks with advanced transit and management features. Initially, these chains only accepted Ethereum for gas fees.
However, Arbitrum has allowed these chains to use any ERC20 token as a transaction fee since January.
This change has now been extended to Circle’s USDC, which the platform believes will significantly improve transaction processes within its ecosystem while providing users with greater convenience, price stability and accessibility.
Why USDC?
Arbitrum explained that adopting USDC streamlines payments, eliminating the need for multiple tokens for gas fees. As a stablecoin, USDC provides more stable and predictable gas costs, easing concerns about ETH’s price fluctuations.
Additionally, the integration of USDC is expected to increase liquidity and accessibility by leveraging USDC’s significant $1.6 billion offering on Arbitrum. This lowers entry barriers for projects developing on Arbitrum Orbit Chains and simplifies user interactions by eliminating the need for USDC conversions.
For builders, this step facilitates easier customization of Orbit Chains through Orbit RaaS providers, including platforms such as Alt Layer, Caldera, Conduit, Gelato Network, Ankr, and Alchemy.
Additionally, it opens up opportunities to apply to Circle’s USDC Grant Program, which supports projects using USDC as gas tokens.