CoinW Research Institute
Abstract
On September 16, Circle officially launched the Arc public mainnet. This Layer 1 network, using USDC as Gas and aimed at stablecoin payments, foreign exchange, RWA, and institutional finance, became the focus of discussion in the Crypto market after its launch due to the "Indian public chain" meme, FUD caused by live broadcasts, and the rush in Meme. Unlike most new public chains, Arc has gathered traditional financial institutions and leading DeFi protocols from the startup phase. Within one day of its mainnet launch, the DeFi TVL exceeded $300 million, but funds are still mainly concentrated in lending and stablecoin liquidity, while the Meme ecosystem is still in its early stages. The Meme craze from Robinhood Chain has provided a reference for the market, but whether Arc can replicate a similar wealth effect remains to be seen. Compared to short-term excitement, what is more worthy of attention is the strategic significance of Arc to Circle. As revenues still heavily rely on USDC reserve yields, Arc offers Circle new growth possibilities to expand into network and financial service revenues and reduce business sensitivity to interest rate cycles.
1. From "Indian Public Chain" to Meme Rush, Why is Arc Hot Again?
On September 16, Circle officially opened the Arc public mainnet. As the company behind USDC, Circle originally set a rather "orthodox" route for Arc, aiming to build a new Layer 1 around stablecoins, payments, foreign exchange, RWA, and institutional finance. However, after the mainnet launch, what the Crypto community first discussed was not these financial applications, but the "Indian public chain" and Meme. The situation originated from live broadcasts and developer presentations during Arc's mainnet launch. Due to the appearance of multiple South Asian developers on screen, the term "Indian public chain" quickly spread in the community. Initially, the discussion was more of a meme, but due to subsequent concerns regarding the presentation quality of early projects and liquidity, it gradually evolved into FUD, leading to sell-offs of some early Meme and ecological platform Tokens. Arc itself is certainly not a so-called "Indian public chain"; this label has no direct relation to the project's actual background but unexpectedly brought more Crypto-native users' attention to this new chain, which was originally focused on institutional finance.
At the same time, another group has begun seeking Meme, Launchpad, and early trading opportunities on Arc. Since the Robinhood Chain had just experienced a Meme craze, some developers and traders who missed the previous cycle began to view Arc as the next new chain worth laying out in advance. With the mainnet launch of Arc, a batch of Meme and Launchpad projects also started rushing in. This created a rather interesting contrast in the early stages of Arc's launch: while Circle wanted to discuss stablecoins and institutional finance, the Crypto community prioritized trading Meme and the expectations for the new chain.
2. What Exactly is Arc? Why Does Circle Want to Create its Own Chain?
To understand Arc, one must first understand Circle. Circle's core product is USDC. By the time of the Arc mainnet launch, the circulating supply of USDC had exceeded $74 billion. However, Circle has faced a significant problem: USDC can circulate on numerous public chains like Ethereum, Solana, Base, etc.; Circle provides "money," but where this money ultimately gets traded, lent, and settled primarily relies on the infrastructure of other blockchains. From a business model perspective, Circle also needs to find new sources of growth beyond USDC. Currently, the company’s revenue still heavily depends on the interest income generated from USDC reserve assets, so even if the circulation of USDC continues to expand, profitability will still be impacted by U.S. Treasury yields and interest rate cycles. When interest rates fall, the reserve income contribution per USDC will also decrease. For Circle, merely expanding stablecoin volume is not sufficient; finding ways to further earn revenue from payments, trading, and financial infrastructure has become increasingly crucial.
Arc aims to change this situation. In simple terms, Arc is an EVM-compatible Layer 1 launched by Circle, designed around financial scenarios such as stablecoin payments, foreign exchange, RWA, capital markets, and AI Agent trading. Circle refers to it as the internet's "Economic OS." The most directly relevant design for regular users is that Gas can be paid directly using USDC. Trading on Ethereum requires ETH, on Solana requires SOL; even if users only want to transfer a stablecoin, they must additionally prepare native tokens to pay transaction fees. Arc, however, directly uses USDC as Gas. For ordinary users, this means simply needing to prepare one less token; for payment companies, financial institutions, and enterprises, fees are priced directly in dollar stablecoins, thus reducing the cost uncertainty due to native token price fluctuations. In terms of performance, Arc offers sub-second finality while being EVM compatible, making it easier for numerous applications already developed with Solidity on Ethereum to migrate over. Circle has disclosed that since the Arc public testnet launched in October 2025, it has processed over 700 million transactions.
Therefore, the true problem Arc seeks to solve is not "creating a faster Ethereum," but extending the stablecoin infrastructure that Circle already possesses further into the financial network. USDC addresses "what on-chain dollars are," while Arc hopes to further answer where these on-chain dollars are paid, traded, lent, and settled. For Circle itself, this also signifies an extension of its business model. From primarily relying on stablecoin volume and reserve income, it is now attempting to establish revenue sources related to networks, trading, and financial services. There is a potentially misleading point here. Circle has completed the genesis mint of 10 billion ARC tokens, which are planned to be used for network security, governance, and ecosystem coordination. However, Circle emphasizes that the genesis mint does not mean that ARC has already been decided for public issuance; currently, Arc’s Gas still uses USDC. Thus, "ARC has already been issued" and "ARC has completed genesis mint" are two different concepts.
3. Arc's Ecosystem Cards: Behind the $300 Million TVL, Who Has Really Gone On-chain?
One of the biggest differences between Arc and many new public chains is that it is not an "empty chain" waiting for projects to gradually migrate. Circle brought not only USDC to Arc but also a comprehensive set of traditional financial, payment, and Crypto infrastructures. The initial validators include institutions such as BlackRock, DTCC, Galaxy, ICE, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo, Visa, and Worldpay, meaning that from day one, Arc has had large institutions from traditional finance, payments, and the digital asset industry directly participating in network validation. This resource extends to the application layer as well. Circle states that when the Arc public mainnet launched, there were over 100 applications and more than 100 institutional and ecosystem builders, covering various directions such as banking, asset management, payments, exchanges, custody, DeFi, wallets, and AI. Unlike many new chains that rely on airdrops and high yields to attract projects after launching, Arc's ecological structure has clearly leaned towards "financial infrastructure" from the beginning.
The first area to achieve a scale of funds is DeFi. As of September 17, approximately one day after the Arc mainnet launch, DefiLlama statistics show that the DeFi TVL has reached about $335 million. In terms of fund distribution, lending is currently the primary scenario. Morpho Blue has a TVL of approximately $225 million, Aave V4 has about $57.6 million, together accounting for over 80% of the current Arc DeFi TVL; Uniswap has a TVL of about $25.7 million, becoming one of the main liquidity entrances for spot trading. During the same period, the 24-hour DEX trading volume on Arc was approximately $55.6 million. This structure is noteworthy. The initial inflow of substantial funds into Arc did not come from Meme or long-tail Tokens but from lending and stablecoin liquidity. This aligns more closely with Circle’s goal of building a financial network around USDC and indicates that the current ecological state of Arc cannot simply be understood through "new public chain speculation."
In addition to having formed a certain scale of DeFi fund deposits, Arc's trading, wallet, and cross-chain infrastructures are also basically in place. Uniswap and Aero provide spot trading and liquidity, Aave and Morpho meet lending demands; 0x, 1inch, Curve, and KyberSwap provide trading and aggregation infrastructures. Trading platforms such as Binance, Bybit, Kraken, KuCoin, OKX, and Upbit have already connected to Arc, while wallets like MetaMask, Ledger, Phantom, Rabby, Trust Wallet, and Binance Wallet provide user access. Circle also connects Arc to over 20 blockchains through CCTP and Gateway.
From a traditional financial perspective, Arc’s ecosystem differs even more from regular public chains. Circle Payments Network has natively integrated Arc, and StableFX offers 24/7 programmable foreign exchange trading involving over 20 fully backed stablecoins; the asset side includes Circle's USYC, tokenized via Securitize's BlackRock BUIDL, as well as assets usable for on-chain trading, lending, and collateralization. This means Arc aims to take on not just "USDC transfers" but a complete set of financial activities from payments, foreign exchange to money market funds, lending, and asset settlement.
Thus, Arc has currently formed an ecological structure based on stablecoins and cross-chain infrastructures like USDC, CCTP, and Gateway, with DeFi as the main funding layer and payments, foreign exchange, and RWA as core financial applications; in contrast, Meme, Launchpad, NFT, and other Crypto-native applications are still in very early stages. However, the Arc public mainnet has just been opened, and currently, the TVL of over $300 million is largely concentrated in a few leading protocols. The rapid inflow of funds does not equate to a matured user ecosystem. The participation of institutions like BlackRock and Visa in validation, along with leading protocols such as Aave, Morpho, and Uniswap being in the first batch, indicates that Arc has a high resource starting point; what is even more important going forward is whether these resources can further be transformed into sustained users, transactions, and fund deposits.
4. After Missing the Boat with Robinhood Chain, Why are Meme Players Eyeing Arc Again?
After the mainnet launch of Arc, the market is frequently discussing whether it will replicate the recent Meme craze of Robinhood Chain. When Robinhood Chain launched in July this year, it similarly focused on Tokenized Stocks and financial services, but then the Meme and token issuance platforms quickly became active. One typical example was Pons. At the beginning of September, Pons had single-day fees reach approximately $5.95 million, creating nearly 25,000 Tokens in one day, with 24-hour trading volume reaching $544 million. This round of market activity allowed observers to see a typical growth path for new chains. After a new chain launches, early capital enters first, followed by a surge in Launchpad and Meme projects; if further wealth effects form, it may attract more users, trading robots, and liquidity.
Therefore, when Arc's mainnet launched, some developers and traders who missed the earlier cycle of Robinhood Chain began searching for similar early opportunities. Meme infrastructure around Arc has already emerged in advance; for example, ArcPad has been deployed on the Arc mainnet to support users in creating Meme Tokens and establishing trading pools via Uniswap V3; Parabola employs a USDC Bonding Curve model. Before the mainnet launch, third-party ecological directories had already tracked at least seven announced Meme Launchpads targeting Arc. However, just because some are laying out Meme in advance does not mean that Arc has formed a Meme craze yet. The explosion of Robinhood Chain was driven by liquidity, Launchpad, trading tools, and wealth effects, while Arc is still in the early stages of its mainnet launch. Launchpads can appear quickly, and tokens can be issued in large quantities, but whether there can be prominent Memes with sustained trading volume and liquidity that bring about real user growth remains to be observed. Thus, the more accurate understanding at this stage is that the market is betting on whether Arc can replicate Robinhood Chain’s Meme pathway, rather than this pathway has been verified on Arc.
5. From Early Excitement to Real Demand, What Does Arc Need to Verify Next?
From the actual situation following the mainnet launch, Arc has already achieved quite a good starting point. The ecological data and institutional line-up mentioned above indicate that it does not lack startup funds and infrastructure; recent discussions surrounding Meme, the "Indian public chain," and "the next Robinhood Chain" have further enhanced Arc's visibility in the Crypto-native community. However, whether these early advantages can further transform into real users and fund deposits is still a question that Arc needs to verify going forward.
A reference case can be Plasma, which similarly emphasizes stablecoins. In September 2025, Plasma's mainnet Beta launched simultaneously with XPL, starting with over $2 billion stablecoin liquidity and more than 100 DeFi integrations on its first day, and the FDV of XPL once exceeded $8 billion after the launch. However, the success of Plasma was not solely a result of the project itself; at the time, the narrative around stablecoins was hot, and the market was in a later stage of a bull market with a higher risk appetite for new public chains and assets, which further amplified its liquidity and token wealth effects. Although Arc also has resources such as USDC, top-tier DeFi protocols, and traditional financial institutions, the market environment it faces is different; currently, the market prices for new public chains and assets have become more cautious, the ARC token has not been publicly issued, and on-chain Memecoins have not yet formed obvious wealth effects. Therefore, it is difficult for Arc to simply replicate the excitement of Plasma's initial launch; what is more important going forward is whether it can truly convert USDC liquidity, institutional resources, and financial infrastructure into sustained on-chain demand.
What is really worth observing next is whether these advantages can gradually translate into ongoing on-chain activity. Here, Arc has a key difference with Robinhood Chain. Robinhood itself has tens of millions of traditional financial users, so when the market traded Robinhood Chain’s Meme and early assets, there was an expectation that "Crypto-native users enter first, and wealth effects attract more on-chain funds that eventually diffuse to Robinhood’s existing TradFi users." This potential user migration provided stronger imagination space for the early assets of Robinhood Chain. Currently, Arc is different. Circle has USDC, institutional partnerships, and financial infrastructure, but these resources do not equate to being able to directly migrate retail users on-chain; the actual participants in Arc still mainly come from the Crypto-native market. Thus, in the short term, apart from observing TVL, trading activity, and whether Meme and Launchpad can continuously attract users, it is more important for Arc to establish its own new user entry point. In the long term, Circle needs to prove that USDC, payments, foreign exchange, RWA, and institutional partnerships can form real business activities, rather than just deploying funds and protocols.
Therefore, the discussions around Meme, the "Indian public chain," etc., are more valuable in helping Arc gain market attention in the early stage of the mainnet launch. The real determinants of whether Arc can go further will be whether Circle can connect institutional resources, USDC liquidity, and Crypto-native users to form continuous on-chain financial activities. At the same time, the opportunities brought by Arc are not necessarily first seen in RWA or Memecoins. A large number of early Tokens are essentially high volatility, low liquidity, and highly dependent on speculative expectations on-chain games, whereas the core narrative that Arc really needs to verify is whether Circle can shift from being a stablecoin issuer that heavily relies on USDC reserve earnings to becoming an infrastructure platform with network and financial services revenue. If this is the logic traded, Circle itself may serve as a more direct mapping entity. Instead of searching for opportunities among numerous early Tokens, investors could build long and short exposures through CRCL and related derivative products to more directly trade the market's expectations for whether Circle's "on-chain dollar financial network" can be established.
This article is for market research and information analysis only and does not constitute any investment or trading advice.
References
1.Arc official website: https://www.arc.io
2.Arc developer documentation: https://docs.arc.io
3.Circle Launches Arc Mainnet, an Economic Operating System for the Internet: https://www.circle.com/pressroom/circle-launches-arc-mainnet-an-economic-operating-system-for-the-internet
4.Introducing Arc: An Open Layer-1 Blockchain Purpose-Built for Stablecoin Finance: https://www.circle.com/blog/introducing-arc-an-open-layer-1-blockchain-purpose-built-for-stablecoin-finance
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