Let's talk about ArcChain. Why did
@circle decide to build its own blockchain?
The answer is simple: USDC operates on the Ethereum and Solana network, and the gas fees, MEV, and ecosystem value are all appropriated by third parties. Circle is just a broadcaster.
If we divide the stablecoin ecosystem into three layers: the middle is
@USDC itself, the channel is exchanges and traditional financial institutions, and the gateway is public blockchains. Previously, Circle acted solely as a conduit, relying on exchanges like Coinbase (which distributes $900 million annually) as a conduit and public blockchains like Ethereum and Solana as a gateway.
Now, Circle is building its own channel, Arc, which will be Circle's L1 blockchain. It does not position itself as a general-purpose public blockchain, but rather as USDC's native financial infrastructure blockchain. Key design features include: gas payments using
@USDC , eliminating the need to purchase native tokens; confirmation in less than a second, suitable for payment scenarios; and an integrated exchange mechanism, allowing direct exchange between stablecoins.
Circle recently launched the
@arc Builders Fund, focusing on incentivizing on-chain markets (perpetual DEX, prediction market, AMM), RWA, lending, exchange (combining Circle StableFX and CPN for on-chain forex trading), AI agent economics (enabling AI agents to trade autonomously using
@USDC ), energy and computing (IoT devices with their own wallets for automatic payments). With the exception of DEX/AMM, which are casino-like businesses across all blockchains, the rest are extensions of Circle's core payments business. Arc does not aim to become the next Ethereum or Solana, but rather a dedicated channel within the USDC ecosystem.
Circle's current strategy is clear: diversify channels (signing with Binance, partnering with Visa, and more recently collaborating with traditional US financial giants like Intuit) while building its own payment gateways (
@arc ). What is the objective? Not just be a stablecoin issuer or an innovative bank with its own user base, but become the global stablecoin settlement layer "the SWIFT of stablecoin networks" aiming to not only take market share from banks, but also from Visa. That's why the Arc has an integrated shift mechanism;
@circle aims to create the infrastructure for the on-chain exchange market.
Previously, I said that investing in Circle requires answering three questions:
1⃣ Is there still room for stablecoins to grow tenfold?
2⃣ Will Circle be able to maintain and increase its market share?
3⃣ Will Circle be able to maintain its profitability?
I've always had more confidence in points 1 and 2 than in point 3. After all, 96% of my current income comes from interest, and I'm not sure I'll be able to maintain the same level of profitability if interest rates fall.
Arc's emergence reflects Circle's visionary planning, broader strategic objective and more diversified profit model. Compared to its current profit model, which depends exclusively on interest rates, Circle's revenue structure could undergo a paradigmatic change, obviously for the better, in five years!
@arc