Circle, the issuer of USDC, the world’s second largest U.S. dollar stablecoin, launched a new public chain - Arc on September 16. In addition to Circle itself, the list of founding validators includes BlackRock, Visa, Mastercard and the Depository Trust and Clearing Corporation (DTCC).
On its first day online, Arc processed 7.76 million transactions. Among them, 82% of DEX transaction volume came from the meme currency issuance platform (launchpad). Arguspad alone took in $202 million and created more than 80,000 new coins in 24 hours.
This opening is not new to the market.
The reference point is Robinhood.
On July 1 this year, Robinhood launched Robinhood Chain, which is based on the Arbitrum technology stack and focuses on stock token trading - users can trade these token exposures on the chain like buying and selling stocks, and can also use them for loans or collateral. Co-founder Johann Kerbrat later explained that Robinhood Chain uses a "barbell strategy": the meme currency and the tokenization of real assets are promoted in parallel. It is not a serious business first and then being turned away by the meme. This is how it was designed from the beginning.
On the first day, the DEX transaction volume of this chain was only about US$14.74 million. However, Arc’s DEX trading volume on the first day was $410.8 million, equivalent to approximately 28 times that of Robinhood Chain on the first day. Looking at the infrastructure alone, both chains were already connected to mature protocols such as Uniswap and Morpho when they went online. The gap is more obvious in the first batch of funds that came in: Most of Robinhood Chain's early funds were deposited in Morpho's lending pool to earn profits, and 90% of the $100 million locked up in the first week came from here; on Arc's first day, the launch pad accounted for the majority. The same infrastructure receives two completely different funds.
According to X user BonkGuy, several Arc ecosystem developers have contacted him in the past few weeks, hoping to introduce meme traders to Arc in the early stages. He judged that the Arc team is learning from Robinhood Chain’s previous cold start strategy. Circle has publicly stated before that it hopes the community can curb the supply of launch pads and meme coins, so that Arc can be recognized as a payment and agent network first. However, Pump.fun and BlackRock appear on the launch list at the same time, which shows that Circle knows that completely blocking speculative traffic, a new chain will most likely not be able to get out of the cold start.
There are also opposing views. Research organization SoSoValue believes that it is difficult for Arc to fully replicate the cold start conditions of Robinhood Chain: the latter has Robinhood's own retail flow, and in the early days it quickly gathered active users through meme trading and low-cost mechanisms; Arc's verifier structure, token status, and trading infrastructure are all different, and it is still questionable whether it can form the same short-term trading flywheel.
Revenue of 700 million, only 34.4 million left
Behind the excitement, Circle’s real motivation for building this chain lies in its own profit statement.
Circle’s business is not complicated: users exchange U.S. dollars for USDC, and Circle puts these U.S. dollars into U.S. Treasury bonds and currency funds to make money on interest. In the second quarter of this year, reserve gains accounted for about $668 million, accounting for about 95% of total revenue.
Most of the interest earned must be distributed. Total revenue and reserves in the second quarter were US$701 million, and distribution, transaction and other costs were approximately US$412 million. After deducting these costs, US$289 million was left; after deducting operating expenses, operating profit was only US$34.4 million. The largest recipient is Coinbase, which took away about $908 million in 2024, or about 54% of Circle-related revenue. The terms of the contract are: After deducting the issuer and other parts, Coinbase will also take half of the remaining ecological income.
Interest rates are another variable. The average USDC circulation increased by 25% year-on-year, but the return on reserves fell by 66 basis points, and the total revenue increased by only 7%. Estimates based on average second-quarter balances suggest that a one-percentage-point change in yield would change annualized gross revenue by approximately $765 million.
The share of USDC on Circle’s own platform (Circle Mint accounts, Circle’s own infrastructure such as Circle Wallets) has increased significantly. In the second quarter, the average daily USDC held by the Circle platform accounted for 19.5% of the total network circulation, compared with only 7.4% a year ago. The proportion of this share retained in Circle’s own hands is higher than the money coming in through distribution channels such as Coinbase and Binance. There is no direct evidence as to whether the launch of Arc can continue to push this share upwards. It can only be regarded as an inference direction given by the financial report structure.
Payment entrance
In addition to building its own chain, Circle also wants to reach out to the payment and settlement level. The AI agent does not have a credit card and cannot pay for API calls. The method of x402 protocol is to enable the long-idle "402 Payment Required" status code in HTTP: website quotation, machine signature payment, and then verified by a "settlement service" and uploaded to the chain. This protocol was open sourced by Coinbase in May 2025.
The key is that x402 is an open protocol, and anyone can do the "settlement service" layer. Coinbase also operates its own x402 Facilitator, initially supporting Base and later expanding to Polygon and Solana, and providing infrastructure for payment verification, settlement, gas sponsorship, and more. On September 16, Circle launched its own Facilitator Service, which also supports Base and Polygon, and adds support for Arc. In other words, the Base chain itself still belongs to Coinbase, but when developers on Base want to access the payment function, they can now choose Circle's settlement service, not necessarily Coinbase - the ownership of the chain has not changed, but at the payment service level, Circle directly cuts into Coinbase's territory. On September 19, Arc officially announced the launch of a payment function for AI Agents, further completing this line.
On September 21, Circle also announced that Circle Mint customers can deposit native BTC, mint 1:1-backed cirBTC, and lend USDC directly with cirBTC as collateral through third-party lending markets on Arc and Ethereum. Coinbase has already had its own Bitcoin-mapped asset, cbBTC, and Circle is now beginning to incorporate BTC into its own stablecoin and payment infrastructure.
competitors
Circle is not the only one on the same track. Stripe and Paradigm's Tempo have been launched on the main network on March 18. There is no native token, and the handling fee can be paid with any US dollar stable currency. Plasma and Stable supported by Tether are also on the same road. The total amount of stablecoins is about 308 billion US dollars, and Ethereum and Waves combined still carry about 80%. What the new chain wants to grab is the stock that has been accumulated on the old chain.
Circle’s choice is the opposite of Tempo: On September 16, Circle completed the Genesis Mint of 10 billion ARC, becoming the first listed company to complete the minting of native tokens for a native network; however, Circle has not yet committed to a public issuance of ARC, and plans to explore switching Arc from the current PoA consensus to PoS in 2027. The first round of private financing in May was approximately US$222 million, corresponding to a valuation of US$3 billion.
The $650 million in on-chain USDC on Arc on the first day was less than 1% of the total USDC circulation; Circle’s own channel’s share increased from 7.4% a year ago to 19.5%, which is not yet to the point where it can change the balance of account sharing power. Both numbers are currently small. Circle wants to cut into Coinbase’s territory at the payment level, and wants the share of its own channels to continue to grow. Whether this chain can really push these two figures up, the financial reports of the next few quarters will give clearer signals.
*The contents of this article are for reference only and do not constitute any investment advice. The market is risky and investment needs to be cautious.