Another significant progress has been made in the field of cryptocurrencies. On May 21st local time, Circles v2, a decentralized finance (DeFi) project led and developed by Martin Koppelmann, the co-founder of Gnosis, was officially launched. This marks a new stage in the long-term exploration of its team in the fields of programmable currency and distributed financial systems.
The Circles protocol aims to build a blockchain-based “borderless currency network”, automatically adjusting the currency supply through algorithms to achieve decentralized value circulation. As one of the core founders of Gnosis, Kopelman has previously driven multiple rounds of DeFi infrastructure innovation through this platform. The upgraded v2 version this time focuses on optimizing the stability of smart contracts, introducing cross-chain asset interaction functions, and enhancing capital efficiency through a dynamic interest rate model.
“The launch of Circles v2 is an important practice of our vision of ‘programmable currency’,” Kopelman said in a statement release. “We hope to provide fairer financial tools for global users through a decentralized currency issuance mechanism.” According to the official documentation, the new version supports cross-linking of mainstream assets such as ETH and USDC, and allows users to obtain network governance rights by staking liquidity certificates.
Industry analysts point out that the technical path of Circles is significantly different from the traditional stablecoin model: it adopts an “over-collateralization + algorithmic regulation” mechanism to replace the centralized issuer, attempting to strike a balance between the degree of decentralization and price stability. This attempt is regarded as an important supplement to the current DeFi ecosystem, especially against the backdrop of cross-chain interoperability becoming an industry focus. The launch of Circles v2 may open up new scenarios for distributed financial applications.
It is worth noting that Kopelman’s team launched the v1 version of Circles in 2023, when it had already achieved multi-currency circulation based on Ethereum. This upgrade comes just one year after its first release, demonstrating the rapid response of the development team to market feedback. Data shows that on the first day of the v2 version’s launch, more than 2,000 addresses participated in the test, and the total value locked (TVL) has not been disclosed yet.
“We are at a critical juncture when cryptocurrencies are transitioning from ‘speculative tools’ to’ practical infrastructure ‘,” said an analyst at cryptocurrency research firm Nansen. “If Circles’ exploration is successful, it could redefine the monetary base of decentralized finance.” However, some experts have pointed out that the algorithmic stablecoin sector has experienced multiple liquidity crises in the past, and the long-term stability of Circles v2 still needs to be tested by the market.
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