The Sei Network recently issued a warning to holders of USDC.n, a stablecoin circulating on their platform, to transition to “native USDC” before the significant protocol update planned for March. This alert comes as Sei prepares for the SIP-3 upgrade, which will significantly alter its architecture and directly affect investors using the older version of the stablecoin. Network data indicates a rapid decline in USDC via Noble balances on Sei, prompting the project team to highlight potential access and value loss risks. This statement illustrates that the transformation within stablecoin infrastructure brings not just technical updates but critical consequences for user funds as well.
The End of USDC.n on Sei Network
Sei Network declared that the USDC.n, a stablecoin bridged through Noble, may cease to function effectively following the forthcoming SIP-3 upgrade. Known as an older version of USDC issued on the Noble blockchain and then transferred to Sei, USDC.n lost its position as the primary stablecoin on the network once Circle started issuing native USDC directly on Sei.
According to the project team, the balance of USDC via Noble on Sei has dropped to about $1.4 million. This decrease from several million dollars in previous months suggests a shift toward Sei’s “canonical” version of USDC. Authorities have explicitly stated the risk of USDC.n assets becoming inaccessible or losing value post-SIP-3 upgrade.
During the transition, Sei recommends DragonSwap and Symphony platforms for small-scale transactions, while offering a more complex solution for high-volume users. This involves bulk transfers from Noble to Polygon, followed by a return to the Sei network using Circle’s CCTP infrastructure.
The Impact of SIP-3 Upgrade on the Stablecoin Ecosystem
Scheduled for March, the SIP-3 upgrade aims to transform Sei Network into an EVM-compatible chain. This update will gradually phase out CosmWasm and Cosmos-based native assets. While simplifying the network’s technical architecture, it necessitates an adaptation process for assets linked to the Cosmos ecosystem.
Noble, central to USDC.n, operates as a specialized asset issuance chain for the Cosmos/IBC ecosystem. It serves as a transition bridge to Cosmos-based networks for issuers such as Circle, Hashnote Labs, Monerium, and Ondo Finance. Circle Ventures’ investment in Sei and partnership with Noble at the end of 2023 shaped USDC’s main distribution line in the Cosmos universe.
In this context, Sei’s new EVM-focused structure promotes the native USDC issued directly by Circle, relegating USDC.n from Noble to a secondary status. The project’s alert highlights how technical advancements can critically impact stablecoin users regarding timing and adaptability.
