Circle, the issuer of USDC, the world's second-largest dollar stablecoin, launched a new public blockchain — Arc — on September 16. In the list of founding validators, besides Circle itself, there are also BlackRock, Visa, Mastercard, and the U.S. Depository Trust & Clearing Corporation (DTCC).
On its first day online, Arc processed 7.76 million transactions. Among them, 82% of DEX trading volume came from meme coin launchpads, with Arguspad alone taking in $202 million and creating more than 80,000 new coins within 24 hours.
This kind of opening is not unfamiliar to the market.
The reference point is Robinhood
On July 1 of this year, Robinhood launched Robinhood Chain, based on the Arbitrum tech stack, focused on stock token trading — users can trade these token exposures on-chain just like buying and selling stocks, and can also use them for lending or as collateral. Co-founder Johann Kerbrat later explained that Robinhood Chain uses a "barbell strategy": advancing meme coins and real-world asset tokenization in parallel, not doing serious business first and then being taken over by memes, but designing it this way from the start.
On the first day, this chain's DEX trading volume was only about $14.74 million. However, Arc's first-day DEX trading volume was $410.8 million, equivalent to about 28 times Robinhood Chain's first day. Looking only at infrastructure, both chains already had mature protocols such as Uniswap and Morpho integrated at launch. The difference is more clearly reflected in what kind of capital rushed in first: most of Robinhood Chain's early capital settled in Morpho's lending pools to earn yield, with 90% of the $100 million in locked value in the first week coming from there; on Arc's first day, launchpads accounted for the bulk. With the same infrastructure, they caught two completely different types of capital.
According to X user BonkGuy, over the past few weeks several developers in the Arc ecosystem proactively contacted him, wanting to bring meme traders to Arc in the early stage. He judged that the Arc team is drawing on Robinhood Chain's previous cold-start playbook. Circle had previously publicly stated that it hoped the community could restrain the supply of launchpads and meme coins, so that Arc would first be recognized as a payment and agent network. But the simultaneous appearance of Pump.fun and BlackRock on the launch list shows that Circle is well aware that if speculative traffic is completely blocked, a new chain will most likely fail to get through cold start.
There are also opposing views. Research firm SoSoValue believes that Arc will find it difficult to fully replicate Robinhood Chain's cold-start conditions: the latter had Robinhood's built-in retail traffic, and in the early stage quickly gathered active users through meme trading and low-cost mechanisms; Arc's validator structure, token status, and trading infrastructure are all different, and whether it can form the same short-term trading flywheel remains questionable.
$700 million in revenue, only $34.4 million left
Behind the excitement, Circle's real motive for building this chain lies in its own income statement.
Circle's business is not complicated: users exchange dollars for USDC, and Circle puts those dollars into U.S. Treasuries and money market funds, earning interest. In the second quarter of this year, reserve income was about $668 million, accounting for about 95% of total revenue.
Most of the interest earned has to be shared out. In the second quarter, total revenue and reserve income were $701 million, while distribution, transaction, and other costs were about $412 million. After deducting these costs, $289 million remained; after further deducting operating expenses, operating profit was only $34.4 million. The largest recipient is Coinbase, which took about $908 million in 2024, about 54% of Circle-related revenue. The contract terms are: after deducting the issuer's portion and other parts, Coinbase also takes half of the remaining ecosystem revenue.
Interest rates are another variable. USDC's average circulation rose 25% year over year, but the reserve return rate fell 66 basis points, and total revenue increased only 7%. Based on the average balance in the second quarter, for every one percentage point change in yield, annualized gross revenue changes by about $765 million.
USDC's share on Circle's own platforms (Circle Mint accounts, Circle Wallets, and other Circle-owned infrastructure) has already risen significantly. In the second quarter, USDC held on average daily on Circle's platform accounted for 19.5% of total network circulation, compared with only 7.4% a year earlier. The share of revenue Circle keeps for this portion is higher than for money coming in through distribution channels such as Coinbase and Binance. Whether Arc's launch can push this share further up currently has no direct evidence, and can only be regarded as an inferred direction suggested by the financial statement structure.
Payment gateway
In addition to building its own chain, Circle also wants to extend its reach into the payment settlement layer. AI agents do not have credit cards and cannot pay API call fees. The x402 protocol's approach is to activate the long-idle "402 Payment Required" status code in HTTP: a website quotes a price, the machine signs a payment, and then a "settlement service" verifies it and puts it on-chain. This protocol was open-sourced by Coinbase in May 2025.
The key point is that x402 is an open protocol, and anyone can provide the "settlement service" layer. Coinbase also operates its own x402 Facilitator, initially supporting Base, then expanding to Polygon and Solana, and providing infrastructure such as payment verification, settlement, and gas sponsorship. On September 16, Circle launched its own Facilitator Service, also supporting Base and Polygon, and adding support for Arc. In other words, the Base chain itself still belongs to Coinbase, but when developers on Base want to integrate payment functionality, they can now choose Circle's settlement service and do not necessarily have to use Coinbase's — ownership of the chain has not changed, but at the payment service layer, Circle has cut directly into Coinbase's territory. On September 19, Arc officially announced the launch of payment functionality 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 directly borrow USDC using cirBTC as collateral through third-party lending markets on Arc and Ethereum. Coinbase has long had its own Bitcoin-mapped asset cbBTC, and Circle is now also beginning to bring BTC into its stablecoin and payment infrastructure.
Competitors in the same lane
Circle is not the only one in this lane. Stripe and Paradigm's Tempo launched its mainnet on March 18, with no native token, and fees can be paid in any dollar stablecoin. Tether-backed Plasma and Stable are also on the same path. Total stablecoin supply is about $308 billion, and Ethereum and Tron together still carry about 80%. What new chains want to seize is the existing stock already accumulated on old chains.
Circle's choice is the opposite of Tempo's: on September 16, Circle completed the Genesis Mint of 10 billion ARC, becoming the first listed company to complete the minting of a native token for a native network; but Circle has not yet committed to a public issuance of ARC, and plans to explore transitioning Arc from its current PoA consensus to PoS in 2027. The first private funding round in May raised about $222 million, corresponding to a valuation of $3 billion.
Arc's first-day $650 million in on-chain USDC is still less than 1% of USDC's total circulation; Circle's own channel share rose from 7.4% a year ago to 19.5%, still not enough to change the balance of power in revenue sharing. Both numbers are still small at present. Circle wants to cut into Coinbase's territory at the payment layer and wants its own channel share to continue rising. Whether this chain can truly push these two numbers up will be shown more clearly by financial reports in the coming quarters.
*This article is for reference only and does not constitute any investment advice. Markets carry risks, and investment requires caution.
