Circle API for DeFi Lending | Access Decentralized Finance

Circle Introduces New API for DeFi Access with USDC

Circle, a prominent cryptocurrency firm, has revealed plans for a new Application Programming Interface (API). This API is designed for businesses utilizing Circle accounts to oversee their crypto assets, with a specific focus on USDC stablecoins.

Expanding Access to Decentralized Finance

The forthcoming API will empower companies to interact with decentralized finance (DeFi) protocols, beginning with the Compound lending pools. This integration aims to streamline access to DeFi opportunities for Circle’s corporate clientele.

The Role of Circle and USDC

Circle is widely recognized as a key founding member of the Centre consortium, in collaboration with Coinbase. Together, they are responsible for the issuance of USD Coin (USDC), a highly utilized stablecoin within the cryptocurrency ecosystem.

Understanding Stablecoins

Stablecoins are cryptocurrencies engineered to maintain a stable value relative to a specific asset. In the case of USDC, its value is pegged to the US dollar, meaning one USDC is consistently equivalent to one USD.

Regular audits conducted by independent firms ensure that issuers maintain sufficient USD reserves in bank accounts to back the circulating supply of USDC.

Facilitating Seamless Money Movement

The core concept behind USDC is to simplify financial transactions. Proponents of USDC believe that transferring funds should be as straightforward as sending Bitcoin between digital wallets.

Circle provides its own infrastructure through Circle accounts. These accounts allow users to programmatically send, receive, and hold USDC via standardized API calls.

Bridging Fiat and Crypto

Circle has developed solutions to connect traditional fiat currencies with the world of cryptocurrencies. Payments enables acceptance of card payments, bank transfers, and USDC transactions, all consolidated into a Circle account as USDC.

Conversely, Payouts facilitates sending bank transfers directly from a Circle account.

New DeFi API Functionality

Circle is now extending its capabilities to provide access to additional features for USDC held within Circle accounts. The upcoming DeFi API will allow users to engage with DeFi protocols without the need to manually transfer USDC to external wallets.

The initial integration will focus on the Compound protocol.

How Compound Works

Compound operates as a platform for crypto-based lending markets. Participants can either supply crypto assets to provide liquidity or borrow crypto assets by providing collateral.

Earning Yield with Compound

Users who lend their crypto on Compound earn interest rewards. Currently, supplying USDC through the Compound protocol yields an annual percentage yield (APY) of 1.74%.

Given USDC’s popularity as collateral within the Compound protocol, its inclusion in Circle’s business account offerings represents a logical and valuable addition to Circle’s overall treasury infrastructure.