USDC Pool on Solana

New Pools
1

Background

Currently Stargate already supports Solana network, however currently it’s limited to bridging certain OFTs. I am proposing for Stargate to support USDC bridging on Solana, especially since majority of bridging volume is dominated by ETH, USDT, & USDC.

Firstly, while CCTP already support bridging USDC to Solana, it does not provide instant finality, users need to wait ~30 minutes, this is a good opportunity for Stargate to provide bridging solution with instant guaranteed finality. As an example, USDC Pools on [Avalanche, OP, Base, Polygon] have good amount of volume on Stargate, even though they are supported by CCTP.

image
image1141×704 51.8 KB

Secondly, this supports adoption of Hydra USDC asset on non-CCTP chains, as we enable users to bridge Hydra USDC to/from Solana. By allowing users to bridge from Solana to Hydra chains, we can increase Hydra TVL further, reducing the need for Stargate to incentivise liquidity pool.

As a summary, Stargate USDC bridge on Solana have a few Unique Selling Propositions:

  • Instant guaranteed finality

  • Hydra USDC bridging to/from Solana

Last but not least, Solana have a strong community around it, providing opportunity for Stargate to gain additional exposure, in order for Stargate to be de-facto bridging solution in the future.

Proposal

Time to market is very important, to be the first good bridging solution in/out of Solana will give Stargate a first mover advantage. Thus I propose we go with the least effort approach first, then improve along the way.

This means providing USDC bridge with incentivised Liquidity Pool, with STG tokens. However, we should strive to minimize STG emission, by bootstrapping the LP with 3 million USDC POL. This 3 million USDC can be moved from V1 LP, which have very low usage as of now, specifically:

  • 1 million from USDC V1 pool on Ethereum network (6.5 million available)

  • 1 million from USDC V1 pool on Avalanche network (5.8 million available)

  • 500k from USDC V1 pool on Optimism network (2.7 million available)

  • 500k from USDC V1 pool on Arbitrum network (2.1 million available)

Fees should be determined by AIPM, which will help in rebalancing credits across pathways & improve capital efficiency. However, if possible, prefer if we configure minimum fees into to be 6 bps, as there are no good bridge competitors available.

Future Improvements

At the time of writing this proposal, Hydra USDC TVL is at around 7.5 million USDC, which is quite a feat. With time, eventually Hydra might provide enough liquidity for Stargate to support bridging USDC for all CCTP supported chains, without needing STG emissions.

However, I believe there are further opportunity to improve Stargate USDC pool capital efficiency, which is by rebalancing funds utilizing CCTP, which uses burn-and-mint. This is not specific to Solana, and should be applicable to all chains supported by CCTP.

By rebalancing funds periodically, we basically batch smaller amounts of bridging activity, by periodically bridge big amount of funds in one go using CCTP. I believe this rebalancing can be done for both Liquidity Pool or Hydra locked assets. (Should also be possible to mirror each bridging operation 1-to-1, but might cost a lot of gas, especially for Ethereum network)

As I’m not a blockchain developer, need inputs on:

  • feasibility

  • reliability

  • security

  • difficulty/complexity

  • maintainability

  • off chain vs on chain

  • etc.

Interested to hear any feedbacks/ideas/thoughts/concerns, please feel free to leave comments.

3 Likes
2

Thank you for this proposal. I believe Solana USDC support is a great idea.

3

It’s great to see community discussion grow around Stargate on Solana. We have seen great usage around OFT transfers to and from the chain, so it’s only natural that discussions arise around a broader initiative for Stargate there.

However, there are some important factors to consider before further exploration takes place. Importantly, as you mentioned, CCTP supports Solana; there is already a zero cost option available for users which Stargate would have to compete with. Whilst it’s true Stargate may still do reasonable volume it’s important to think about this in the context of other available opportunities.

One thing worth noting is that building on non-EVM chains is notoriously difficult and extremely resource intensive. For Stargate to deploy an instance on Solana it could take 6+ months and would require us to forgo many other developments which would be arguably as large an opportunity, especially in aggregate. Currently, the Foundation’s view is that the volume potential doesn’t support such an allocation of resources.

Another factor to consider is that with Hydra Stargate would be fragmenting USDC liquidity on Solana, where they support native USDC. Most DeFi protocols on Solana support native USDC and it would take a lot for that support to extend to Stargate’s Hydra USDC.

Ultimately, due to all of the above we think that this proposal may be premature, however we will certainly continue to explore this on the Foundation side due to the demand from the community and the clear value that Solana attracts. In the meantime it could be worth considering wrapping CCTP up in the Stargate frontend so users can bridge between Solana and other available chains through our UI. If this was the case the DAO could also vote to add a fee for the protocol to benefit from the volume. If there is sufficient interest from the community we would be happy to explore potentially proposing this!

4

Thanks for the response, understand where you’re coming from. Even if we ends up deciding not prioritizing this, there are certain points that I want to discuss further.

Completely understand, didn’t know it’ll take that much effort to deploy USDC Pool on Solana.

However, from community side we do not have any visibility regarding ongoing priorities, would it be possible for the team to address this?

I believe it’s ok to not provide exact timeline, just a list of ongoing priorities should be sufficient. (and hope it won’t put too much pressure on the devs by doing it this way)

And if it’s confidential, think can list it down also, but without the details, if it is ok.

I believe doing it this way won’t provide us with any Unique Selling Proposition, especially with other bridging aggregators already available.

However, if it does not take a lot of effort to implement, it’s definitely something we should consider

Sorry, seems I didn’t explain this one properly.

What I meant is not Hydra USDC on Solana as an asset, however it’s as a function of bridging native USDC on Solana into other chains with Hydra USDC (Taiko, Flare, IOTA, etc.).
Which in turn indirectly supports the Hydra USDC adoption across other networks that adopts Hydra USDC as a main stablecoin asset.

For example, when User bridge USDC from Solana to Taiko, this effectively locks their native USDC into Stargate’s Liquidity Pool, and mints Hydra USDC on Taiko.

As a result

  1. This supports the amount of Hydra USDC TVL, which will reduce incentives necessary to support Liquidity Pools.
  2. Increase the ubiquitousness of Hydra USDC bridging (as an example, User can bridge Hydra USDC from Taiko to Solana Native USDC directly, without first unwrapping it to a native USDC on a separate chain)
1 Like