Circle releases Arc white paper: Launches "Economic Operating System" Layer 1, ARC as the native coordinating asset

Odaily Planet Daily News reports that Circle has released the latest white paper, “ARC: The Native Asset of the Economic OS,” officially launching the public Layer 1 network Arc, and for the first time disclosing the complete economic model of the native token ARC. Arc is positioned as an “Internet economic operating system,” aiming to unify stablecoin settlement, tokenized assets, and the underlying execution and coordination layer of on-chain financial markets.

The Arc network will provide deterministic settlement, stablecoin-denominated gas fees, configurable privacy mechanisms, and an institutional-grade validator system, connecting to a broader financial ecosystem through USDC cross-chain (CCTP), payment networks, and development tools. Since the testnet launched in October 2025, it has processed approximately 244 million transactions, with the mainnet expected to be released in summer 2026.

The total supply of ARC is fixed at 10 billion tokens, serving as the native coordinating asset of the entire system, and does not represent equity or profit rights. Its core functions include staking for network security, governing economic parameters, capturing fee value, and coordinating functions across ecosystems. In the initial distribution, 60% is allocated for ecosystem development and incentives, 25% to Circle for protocol development and operational support, and 15% as a long-term reserve to address systemic risks and strategic expansion.

Economically, ARC adopts an initial inflation rate of 2%–3%, gradually decreasing as the network matures, with the long-term goal of approaching neutrality in inflation. Meanwhile, Arc has designed a unified fee model: regardless of the asset used by users to pay on-chain fees, the system will automatically convert the fees into ARC at the protocol layer and distribute them among validators and stakers, while permanently burning a portion of ARC, forming a “usage-based consumption” supply and demand structure.

This mechanism creates dual value drivers for ARC: on one hand, increasing network usage will continuously boost demand for ARC; on the other hand, the fee burning mechanism will continually reduce circulating supply. The white paper explicitly states that the long-term goal is to achieve a “protocol fee burn scale close to or even exceeding new issuance,” thereby building an inflation-neutral or deflationary economic structure.

Functionally, ARC also serves multiple roles, including staking security, governance voting, fee discounts, and cross-ecosystem access rights. Stakers can receive network revenue sharing and fee discounts, and participate in decisions on key parameters such as fee structure, inflation curve, and burn ratio. The governance structure is initially led by Circle, gradually transitioning to validators and token holders, ultimately achieving decentralized management of economic parameters.

Circle emphasizes in the white paper that ARC is not a traditional investment asset but a fundamental mechanism used to coordinate the global economic operating system. Its value derives from network usage itself rather than promises from the issuing entity. Against the backdrop of rapid expansion in stablecoins, RWA, and on-chain finance, Arc aims to upgrade blockchain from a “financial application platform” to a “global economic settlement layer,” with ARC serving as the core coordinating and value-capturing tool of this system.