Sei Labs and Circle have issued a joint advisory to all holders of the bridged USDC.n token on the Sei blockchain, instructing them to swap their holdings for native USDC before an upcoming scheduled network upgrade. This move is designed to phase out the bridged version and establish native USDC as the canonical stablecoin on the Sei network.
The transition is already underway, with liquidity for USDC.n being significantly reduced on major Sei-based DeFi applications and centralized exchanges. Post-upgrade, only the native USDC contract will be integrated into new DeFi solutions built on Sei. According to Jayendra Jog, Co-founder of Sei, "Users should swap to native USDC on Sei before the upcoming network upgrade as liquidity for USDC.n will be wound down."
The swap signifies a strategic shift aimed at improving stability and reducing counterparty risk within the Sei ecosystem. The immediate effect is a change in the network's liquidity dynamics, as protocols begin prioritizing the native asset. This will require traders and developers to adjust their liquidity management and trading practices.
Analysts anticipate the liquidity shift may cause a temporary decrease in Sei's Total Value Locked (TVL) before stabilizing after the swap is complete. The decision aligns with broader industry trends to standardize and strengthen crypto market infrastructure by favoring native assets over bridged versions for enhanced security, efficiency, and regulatory compliance.
