initia

Prop 94: Migrate Initia USDC from Noble to Injective via Redemption Vault [No User Action Required]

Circle is retiring USDC on Noble. The USDC that Initia uses today (ibc/6490…8AF4, "USDC.n") is Noble USDC held in Noble IBC escrow for Initia. After Jan 12, 2027 only wallet-held Noble USDC can be redeemed with Circle, so USDC.n on Initia or in Initia contracts would be stranded. The canonical Cosmos USDC becomes Circle-native USDC on Injective ("USDC.inj", ibc/A64E…8048 on Initia via channel-113).

This proposal enables USDC.n holders on the Initia L1 and Rollups to proceed as is, without the need for action within the Noble CCTP depreciation deadlines.

This is accomplished through the creation of a USDC.inj Redemption Vault, whereby USDC.n on Initia can be redeemed 1:1 for USDC.inj as it leaves the ecosystem at any point in the future.

Proposal:

  1. Fill the Redemption Vault with USDC.inj
  • Mint 1,100,000.000000 USDC.n into the locked vault of the USDC reserve contract at 0xb7f30f2d281a9138bf1fdbc2c4d3480d311565dec6a76bd91d6102218b7c9afc (reserve::issue, as 0x1). The vault is owned by 0x0 and can only be moved by the contract's wrap/redeem functions.
  • The USDC.n in the vault can be exchanged for USDC.inj at a 1:1 rate
  • The Initia Foundation will supply USDC.inj to the vault, withdraw the USDC.n, and redeem the USDC.n on Noble before CCTP is shut down
  • All remaining USDC.n on Initia remains backed 1:1 by USDC.inj in the redemption reserve vault
  1. Halt New Inbound Noble USDC Transfers
  • Add an IBC rate limit on channel-3 (Noble) for USDC.n: 0% inbound, 100% outbound, 1-hour window. New Noble USDC can no longer enter Initia (it is refunded on Noble), so the reserve cannot become a free exit for Noble USDC from other chains.
  1. Enable Redemptions
  • Enable redemption in the vault (reserve::set_redeemable), remaining USDC.n on Initia can be converted to USDC.inj 1:1 through the vault at any time.

What Changes For Users?

No action is required. USDC.n stays transferable and keeps working across the Initia L1 and Rollups.

New incoming USDC via the Initia App bridge will land as USDC.inj going forward. On withdrawal from the ecosystem, existing user held USDC.n will automatically convert to USDC.inj via the Redemption Vault and be sent to the users destination chain.

For a time, both USDC.n and USDC.inj will exist on Initia. Apps and LPs should migrate incentives to USDC.inj when possible and users may convert from USDC.n -> USDC.inj 1:1 at any time through the Initia Wallet and App.

Contract: github.com/initia-labs/usdc-reserve