USDT & USDC Will Be Able to Run on Cardano Mainnet Soon; BTC and ETH to Come Later!
WingRiders has announced its partnership with Milkomeda and Flint wallet, and their implementation of the Ethereum Virtual Machine (“EVM”) on the Milkomeda sidechain protocol, which will run on wADA (“wrapped ADA”) from WingRiders Mainnet launch. The protocol is a sidechain project on Cardano and allows fees to be paid by wADA.
ERC20 Stablecoins (USDC, USDT), BTC and ETH will be soon run on the Cardano mainnet. The first-ever USDC transaction on Cardano mainnet is here.
How it Works
You can check out this diagram from WingRiders’ tech team that outlines exactly how this works.
First, the user is able to migrate their Ethereum based ERC20 assets to Milkomeda sidechain via the Nomad bridge (audited via Quantstamp) using Metamask. Milkomeda itself is an EVM based side chain of Cardano — supporting the ERC20 tokens stored for the user (for example on their Flint wallet or again using Metamask). A gateway will lock these ERC-20 tokens and then issue Cardano native equivalents of these tokens on to the Cardano blockchain. This can be done via the Flint wallet.
Obviously, to map ERC-20 tokens to the eUTxO based Cardano chain, we need a gateway — called “Milkomeda Bridge” to handle the mapping.
Wrapped Tokens on Cardano
Looking at the diagram above, you can see that from the Ethereum blockchain to the Milkomeda sidechain, these are all ETH chains, and can be handled by Metamask.
Once these tokens have reached the “Milkomeda Bridge” they will hit a certain smart contract address and become “locked”. At the same time, the mapping “entity” will be releasing pre-minted 20 USDC tokens that are locked on the Cardano mainnet blockchain. These tokens will be mapped back to the smart contract holding the “locked” ERC-20 tokens.
Milkomeda includes just such a bridge, the “Milkomeda Bridge” — where the assets are locked on the Cardano side and the wrapped asset counterparts have released this part of the ERC20 token journey. Following this, the wrapped tokens (Cardano mainnet CNT equivalent) representing the ERC20 tokens can be sent from the Milkomeda gateway to the Flint wallet. Flint wallet is already supported by WingRiders AMM DEX thus enabling the user to use these tokens to swap or add liquidity according to his needs.
As you can see from the diagram above, this allows these wrapped ERC-20 Stablecoins to move across the Cardano network, to be swapped or traded.
What does this mean for Cardano?
One of the things that really boosted the adoption of Ethereum in 2018/2019 was the adoption of Stablecoins. These provide value in two ways.
- They become a non-volatile “safe harbor asset” for people on the DEX or more widely, on the Cardano blockchain. Because Stablecoins are…stable. (In the case of USDC they are pegged to the US Dollar)
- By providing a simple way to get into the market, Stablecoins acted as a great “liquidity accelerator” for the entire crypto-ecosystem. When Tether launched, it quickly went from millions to tens of millions, to billions of dollars in total value.
The utility of Stablecoins is not to be underestimated.
WingRiders’ aim is to complete the journey of ERC20 tokens to the Cardano mainnet. With this partnership in place (Milkomeda and Flint) this functionality will be available from WingRiders DEX mainnet launch. This means that it will be relatively easy in the future to begin to include the more popular and common ERC-20 token pairs with Cardano native tokens on the WingRiders platform.
WingRiders Minting Tool
Furthermore, WingRiders have developed a “Minting” (https://minter.wingriders.com) tool that can be used to create Cardano native assets with a guaranteed fixed supply. After minting a set number of tokens, no additional tokens can be created for this asset, nor none of the tokens can be destroyed. For example, if you minted 10m governance tokens, no additional governance token can be minted afterwards. This property makes it ideal to represent wrapped tokens from other blockchains. The linking of these tokens to ERC20 is not part of the tool, and it works purely on the Cardano side.
This tool can be from now on used by the whole community to take the ecosystem and its interoperability further. In this version, it is only for advanced developers with experience with minting.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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