TLDR: What is CCTP and How it Works
Circle’s Cross-Chain Transfer Protocol (CCTP) on Noble enables users to send their USDC, the collateral contemplated by dYdX Chain, from other chains directly to dYdX Chain in an easy, simple and secure manner
Example: User wants to send their USDC on Ethereum to dYdX Chain Solution: By leveraging CCTP, USDC can be burned on Ethereum, re-minted on Noble, and forwarded via IBC to dYdX Chain in one transaction. It’s that simple!
Introduction
We are thrilled to announce that USDC on Noble and the imminent launch of CCTP is poised to unlock huge UX benefits for dYdX’s v4 software (“dYdX Chain”).
The open-source dYdX Chain is powered by the Cosmos stack, which enhances the exchange’s performance and decentralization. However, as a sovereign application-specific blockchain, a key requirement for dYdX Chain has always been a seamless migration path for native assets from Ethereum to Cosmos.
Today, we are excited to announce that the final component of this migration path - Circle’s implementation of the Cross-Chain Transfer Protocol (CCTP) - will launch on Noble's mainnet on November 28th after being available on Noble's testnet as of November 3rd.
CCTP will enable users to easily migrate USDC between blockchains in a single transaction. In fact, users on any CCTP-enabled blockchain (currently Arbitrum, Avalanche, Base, Ethereum, and OP Mainnet) will have a way to transfer their assets to Cosmos.
CCTP on Noble is a major engineering initiative which was first presented in a testnet demo at Cosmoverse in October. Now on the cusp of CCTP mainnet deployment, it reflects an enormous onboarding advantage for dYdX Chain and the Cosmos ecosystem. Let’s dig in!
What is Noble?
Noble is a Cosmos application-specific blockchain that is purpose-built for native asset issuance. Noble is the issuance chain for native USDC in the Cosmos and IBC ecosystem with over 14.2 million USDC currently on-chain. As an infrastructure provider, Noble plugs into over 50 IBC-connected blockchains and enables the seamless transfer of native USDC throughout the IBC ecosystem.
What is CCTP?
CCTP enables USDC to be sent securely between supported blockchains via a native burn and mint process. There is no reliance on custodial bridging. Here’s an example of a simple CCTP transfer flow:
User transfers USDC from one chain to another via a third-party app, thereby burning USDC on the source chain (e.g., Ethereum)
Circle’s automated service observes and attests to the burn event
Either the user or a third party relays the attestation to the destination chain (e.g., Noble)
User receives USDC on the destination chain (e.g., Noble)
Interacting with CCTP and dYdX Chain
As the first non-EVM implementation of CCTP, Noble has had the opportunity to build additional functionality on top of the core CCTP protocol, which vastly improves the user experience of onboarding to any IBC-connected blockchain from other ecosystems like Ethereum.
After the mainnet launch of CCTP on Noble, Noble plans to introduce router functionality that can automatically forward USDC minted by CCTP to IBC-connected blockchains. This means users will be able to sign one transaction on any CCTP-enabled chain (e.g., Ethereum) and seamlessly receive their funds on any IBC-connected chain without having to specify the behind-the-scenes routing.
The unique IBC transfer flow, once forwarding is available, is as follows:
User transfers USDC from one chain to another via a third-party app, thereby burning USDC on the source chain (e.g., Ethereum) and including a forwarding message (e.g., “forward to dYdX Chain as destination chain”)
Circle’s automated service observes and attests to the burn event
Either the user or a third party relays the message and attestation to Noble
Noble’s router module executes the forwarding message via IBC per the contained metadata
User receives minted funds on the destination chain
Noble’s router module is expected to launch later this year. In the meantime, users can use third-party messaging protocols to forward USDC from Noble via IBC after CCTP issuance on Noble.
Stay tuned for CCTP on Noble mainnet on November 28th!
About dYdX and Terms
Here at dYdX, our mission is to democratize access to financial opportunity. We believe that v4 software will represent notable progress in service of that mission. The events in the global economy that have transpired over the last year have only reinforced the need for open, transparent, and permissionless financial products. We’re excited for v4 software to better meet those needs.
If building the future of a decentralized exchange and open finance is something you’re interested in, check out what it’s like to work at dYdX and our open roles!
To ask additional questions, join the discussion on Discord, participate in the dYdX community, or follow us on Twitter.
Terms and Conditions: This post is subject to the dYdX Terms of Use and v4 Terms of Use. dYdX products and services are not available to persons or entities who reside in, are located in, are incorporated in, or have registered offices in the United States or Canada, or Restricted Persons (as defined in the dYdX Terms of Use). Circle and Noble are independent from and unaffiliated with dYdX, and dYdX is not responsible for any action taken by the foregoing or any other third parties, including content set forth on any third-party websites, such as any links to such content in this document.