Introducing the ARC Whitepaper: Exploring Arc’s Native Coordination Asset
Summary
Circle has released the ARC whitepaper, outlining how ARC could serve as the native coordination asset of the Arc network through staking, economic governance, fee mechanics, and expanding platform utility.
ARC is not launched. All products and features are subject to change.
The ARC whitepaper outlines how a native token is designed to serve as the coordination mechanism of the Arc network through governance, protocol fee mechanics, broader platform utility, and expanding participation over time. More fundamentally, it makes a broader case: if the internet is going to have a true economic operating system, it will need both shared infrastructure and a native way to coordinate the participants who depend on it.
Why a global economic operating system needs coordination
Before mobile operating systems, mobile phones worked. They just didn’t scale well. Developers built for dozens of incompatible platforms, each with its own rules, tooling, and economics. The mobile OS emerged because growing activity demanded something shared: a common environment in which many participants could build and operate alongside one another.
Economic infrastructure is approaching a similar threshold.
Today’s economic system still resembles computing before shared operating systems. Payments, lending, capital markets, and settlement run across closed systems built decades ago, each with its own intermediaries and constraints. Software has transformed nearly every other industry. Economic infrastructure has not yet fully made the same shift toward common, internet-native infrastructure.
The Arc network is designed to help enable that shift. It is a public Layer-1 blockchain purpose-built as the Economic OS for the internet: a shared platform where stablecoins, tokenized assets, economic applications, and global markets can operate on common, composable infrastructure.
But operating systems are not just software. At sufficient scale, they also require governance, economics, and a way to keep many independent participants (e.g., users, builders, validators, and institutions) aligned with one another and with the long-term success of the network.
Why the Arc network needs ARC
The Arc network addresses one part of the problem: execution. It is a public, EVM-compatible Layer-1 blockchain built for real-world economic activity, combining stablecoin-native fees, deterministic sub-second finality, configurable privacy, and direct integration with ecosystem applications, including Circle’s full-stack platform for use cases across payments, lending, FX, and capital markets.
The ARC token is designed to address the second part of the problem: network coordination. While stablecoins are powerful transaction assets and an excellent medium of exchange, they are not well suited for coordinating long-term network participation across validators, builders, and other ecosystem participants. ARC is designed to provide that coordination layer, helping align the participants who govern, use, and sustain the network.
As the network expands to include validators, builders, liquidity providers, exchanges, institutions, and end users, it needs a durable mechanism that can align them around shared outcomes. In this model, the system separates into three layers: the network as the execution environment, stablecoins as the transactional medium, with the ARC token as the coordination mechanism.
That coordination mechanism needs to be native to the protocol itself. As the native coordination asset for the Arc network, the ARC token's role is to help govern key economic rules, align participants around shared outcomes, and support broader participation as Arc grows. In this model, ARC helps connect the people and institutions that use the network to its long-term success.
How ARC works
ARC is designed to serve several core functions within the Economic OS. These functions reinforce one another over time, so that growing network activity can strengthen the coordination layer, and a stronger coordination layer can in turn support more network activity.
A path to broader network participation
ARC is intended to support the future transition of the Arc network from Proof-of-Authority (PoA) to Proof-of-Stake (PoS). Under the PoS model, validators operate the network, ARC holders may participate through staking, and validator and staker rewards come from two primary sources: inflation-funded issuance and protocol fees. This creates a broader participation model for governance and economic coordination over time, while maintaining the accountability expected of infrastructure used for serious economic activity.
Governance over key economic decisions
ARC holders would be able to vote on economic parameters that directly affect participation in the network, including fees, inflation rates, and burn logic. This grants network participants meaningful authority over shaping the economic rules that matter most, while preserving a focused governance model designed to support stability, clarity, and long-term network health.
Fee mechanics tied to network activity
The Arc network is designed around predictable stablecoin-based fees. These predictable fees are designed to be converted into ARC and routed to validators and stakers through reward mechanisms, with a portion also burned, connecting network activity to participant incentives and long-term protocol sustainability.
Utility across the broader platform
Designed as a broad platform, the Arc network spans core infrastructure, stablecoins, protocol services, developer tools, and applications. ARC is expected to provide utility across the network, including potential fee reductions, access mechanics, and participation benefits for users and builders who engage more deeply with the platform.
Expanding coordination as Arc grows
As the Arc network grows, so too can ARC’s role into expanded services, applications, and protocol capabilities. The logic is simple: as the platform deepens, the coordination surface expands with it. ARC is intended to grow alongside that surface area.
What comes next
Today is the beginning of a longer conversation.
Over time, we’ll share more about the ARC thesis: technical details for how PoS mechanics will work, explainers for builders and developers, and additional context for end users on what participation could look like as the Arc network grows.
The Arc network is designed to serve as shared economic infrastructure for the internet, and ARC is designed to provide the native coordination layer that helps it become more durable over time: securing the network, shaping its economic rules, aligning its participants, and expanding with the network itself.
Read the ARC whitepaper to explore the full design in detail.
The Arc Team
No Arc token has been launched, and any discussion of a potential Arc token is merely exploratory. No decision has been made regarding development, deployment, or functionality/utility. Any discussion is for informational purposes only and should not be understood as a representation, promise, commitment, or warranty by Circle or any affiliate regarding launch, timing, availability, functionality, governance, listings, liquidity, market support, token value, appreciation, or any future managerial efforts. The Arc token is not an investment opportunity, a security, a form of payment or substitute for fiat currency or stablecoins. It does not reflect any interest in Circle Internet Group, Inc., any of its affiliates, or the Arc network. Nothing herein constitutes a promise, representation, offer, solicitation, or investment advice. All features and designs are subject to change. See arc.network/arc-token-whitepaper for more.
Arc testnet is offered by Circle Technology Services, LLC ("CTS"). CTS is a software provider and does not provide regulated financial or advisory services. You are solely responsible for services you provide to users, including obtaining any necessary licenses or approvals and otherwise complying with applicable laws.
Arc has not been reviewed or approved by the New York State Department of Financial Services.
The product features described in these materials are for informational purposes only. All product features may be modified, delayed, or cancelled without prior notice, at any time and at the sole discretion of Circle Technology Services, LLC. Nothing herein constitutes a commitment, warranty, guarantee or investment advice.