0x Project Engineer and Data Scientist at Coinbase Alex Krueger said the blacklisted address verification feature costs USDC users $3.6 million per month.
Alex Kroeger blogged that USDC transactions cost users 40% more than DAI transactions, despite the fact that both stablecoins are based on the ERC-20 standard. The reason for the increase in the cost of transactions was the “black list” of blockchain addresses created by the developers of the Center consortium.
The list includes banned addresses that were recorded in the course of operations for the financing of terrorism, money laundering, fraud and other criminal activities. The purpose of the list is to check addresses with the right to block transactions and freeze accounts, as well as to protect uninformed users from interacting with prohibited addresses.
It was the cost of checking the list, according to Krueger, that became the main reason why transactions in USDC are more expensive than in DAI. Each check of the blacklist costs the user about 2,100 gas, or about $0.58, based on the value of ETH at $2,770. at least three checks, which is about $1.74.
According to Krueger, in December 2021 alone, checking the “black list” added about $3.6 million to USDC users in gas fees. Kruger presented his solution to reduce transaction fees. He proposed to exclude the “black list” check from all transaction functions, and introduce a new function – freezing the balance. This feature will allow the administrator to “freeze” the account’s funds.
The reaction of representatives of the Center consortium to Kruger’s proposal is not yet known. Recall that, as Circle founder and CEO Jeremy Ellyre revealed earlier this month, since 2019, the market capitalization of USDC stablecoin has grown by 10,000% to reach $50 billion.
Source: Bits
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
