Over the course of five years, USDC’s market cap skyrocketed from a mere $500 million to nearly $26 billion, according to CoinGecko.
The stablecoin, which is vying for dominance with Tether – and more recently, a new contender in PayPal – for the lion’s share of the market, was launched through the Centre Consortium, which provided governance over the token.
At the time, Circle provided most of the manpower and reserves necessary for the project, with Coinbase assuming a minority role as a distributor and promoter of the project. However, the exchange has recently decided to step up to the plate and take a more hands-on approach.
Under previous terms, Coinbase and Circle hand an agreement to share revenue between them based on USDC holdings and each firm’s stats regarding minting and distribution.
According to Circle CEO Jeremy Allaire, a new agreement has been reached, which will focus less on the dealings of the partners and more on holdings – including those on third-party DeFi wallets.
“[This] tunes up the economics in a way that felt really fair for both of us. Coinbase’s new equity stake creates a good, strong alignment for long-term success.”
News of Coinbase’s new agreement with Circle comes shortly after the latter announced that the Centre Consortium would be dissolved. Centre, which has been a central feature of Circle’s project ever since USDC’s launch, is no longer necessary, argues Allaire. Originally, the consortium was supposed to help share governance between multiple firms.
However, the planned partnerships with other firms did not materialize, leaving Centre as nothing but a mediation tool between Coinbase and Circle. Since the two firms were already performing all duties necessary for the upkeep and promotion of USDC, they agreed to dissolve the consortium.
The size of Coinbase’s new stake in Circle was not disclosed, although Allaire confirmed that it is a small, minority stake and that Circle would still be mostly in control of the project.
Once the formalities are done, Circle plans to continue upgrading USDC’s capabilities in a bid for future revenue. In the near future, Circle plans to launch USDC on six new blockchains, although they’ve kept the identity of said blockchains under wraps for the time being.
Previously, Circle has launched a EUR-based stablecoin and has worked on cross-chain capabilities and programmable wallets in an effort to make USDC even more attractive for developers.
