Circle has everything crypto startups can only dream of: tens of billions of dollars in reserves, U.S. licenses, a public listing on the NYSE and direct doors into the offices of the biggest banks. With that kind of resource you could assemble the best engineers on the planet and build a truly breakthrough payments architecture from scratch. Instead, in its third-quarter report Circle bragged about launching “its own blockchain,” Arc — which on closer inspection turns out to be yet another Ethereum clone with a rewritten chain ID, bought consensus and a closed, invite-only validators’ club. But the most interesting part is buried in the financial table: a company whose business rests on the image of a boring, reliable digital dollar suddenly minted 10 billion of its own ARC tokens and quietly sold them in a presale for $182 million.
Let’s recall, without diplomatic bows, what the word “presale” actually means in crypto-market language. Private-round investors and funds never put up almost two hundred million dollars just to hold a “network coordination instrument” in a wallet. In nine cases out of ten, a presale is a wholesale buy-up of coins minted out of thin air at a bargain price under one single unspoken promise: later the token will be listed on exchanges, the showcase will be warmed up with loud partner names, and early buyers will dump their inventory at a multiple onto the retail crowd. There is no other financial mechanism behind closed token presales.
Copy-paste for billions: they changed the chain ID and called it an operating system
On November 4, 2026, Circle published its third-quarter results, showcasing two September events: the launch of the mainnet of its layer-1 blockchain Arc and the issuance of 10 billion ARC tokens. In the press releases this is served with maximum pathos — as an “economic operating system for the internet,” built for the “era of the agentic economy” and global financial markets.
Close the marketing brochure, though, and open Arc’s own technical documentation, and all the magic evaporates. What we have is a kit assembled from thoroughly familiar borrowed parts:
- Execution — a standard Ethereum Virtual Machine (EVM). Inside runs an ordinary Reth client written in Rust. Solidity contracts, wallets like MetaMask and the whole familiar Ethereum toolchain work without changes. To make the network look different from the original, they simply assigned it a new identifier — chain ID 5042.
- Consensus — Tendermint bought off the shelf. Block production and confirmation are handled by the Malachite engine. That is an implementation of the classic Tendermint BFT algorithm that the Cosmos family of networks has run on for years. Circle did not even write it itself: in August 2025 it simply bought the Malachite team and codebase from Informal Systems and bolted that engine onto the Ethereum client through the standard Engine API.
- Validators — strictly by Circle’s list. There is no open entry to the network. The documentation and legal disclaimers state outright that Arc runs on a Proof of Authority model with a closed validator set. An ordinary person or a third-party company can stand up a node only to watch from the sidelines and verify other people’s transactions; the right to produce blocks and vote is handed out by Circle itself. The starter list invited loud names — from BlackRock, Visa and Mastercard to Standard Chartered and Deutsche Börse — with a promise to onboard them in stages.
- Gas in USDC. The only genuinely convenient practical choice: network fees are charged straight in the USDC stablecoin, with no need to buy a separate volatile coin just to pay for a transfer.
And here the obvious question appears: why, with an architecture like this, do you need the word “blockchain” at all? If the company itself leads the validators by the hand, and the network’s only unit of account and fuel is its own centralized USDC, then with that level of control Circle could simply roll out its own makeshift PayPal on an ordinary database and paint any balances it likes. Transfers would fly even faster, and nobody would have needed to buy a consensus engine.
But an honest centralized database has two downsides. First, you have to write the whole surrounding stack yourself, whereas an Ethereum clone lets you piggyback for free — ready wallets like MetaMask, other people’s Solidity contracts and familiar developer tools. And second, nobody will hand you $182 million in a presale of your own token for a spreadsheet on a server or yet another PayPal. For that, the “new L1 blockchain” signboard is simply necessary.
Let’s call things by their names. Take a ready Ethereum virtual machine, bolt a Tendermint-family consensus on the side, change the chain ID, hand the controls to approved validators and declare the result a “new blockchain” — that is the recipe by which the last five years have stamped out dozens of networks: from BNB Chain and Polygon to Avalanche C-Chain and an endless procession of small EVM clones. When a five-person startup forks Ethereum and changes three lines in a config, nobody minds — people are saving time and budget. When a giant the size of Circle, with $865 million in quarterly revenue, does the same thing and then calls that assembly an “economic OS for the internet,” it looks like outright hackwork.
Stablecoin issuer on the tokensale trail: where did the $182 million in the report come from?
If the Ethereum clone produces only engineering boredom, the issuance of its own ARC token produces outright bewilderment.
Look how carefully Circle hedges its wording for the lawyers in the press release. The company reports that it generated a starting supply of 10 billion ARC tokens in the United States, calls them a “digital commodity” for future network governance and immediately adds an important caveat: the mere fact of issuing the tokens is not a promise to put them into public circulation. Allegedly this is just a “technical milestone,” and the question of whether to move the network to Proof of Stake with ARC participation the company will merely “consider in 2027.”
It sounds like an innocent technical placeholder for the future — right up until you scroll the quarterly report down to the revenue table. There, in the “Other Revenue” line, a year-over-year explosion of 627% suddenly appears — up to $207 million. And Circle itself casually explains in a footnote: $182 million of that sum came from a closed pre-sale (presale) of the ARC token.
Read that again. Fees on the Arc network are paid in USDC. There is no staking on the network — validators are appointed from a list. A public market launch of the ARC token is officially not promised. But 10 billion coins are already minted, and 182 million real dollars from their sale are already sitting in the company’s quarterly revenue and lifting its adjusted EBITDA by a full 85%! Whom exactly this package was sold to, at what price, with what lockup terms, and against whom these billions of tokens are ultimately meant to be unloaded — not a word in the report.
Compare that with the main competitor. You can throw as many claims at Tether as you like, but Tether does not issue its own speculative token under its brand and does not book a closed fire sale of it into the USDT issuer’s revenue. And the ostentatiously proper, regulated Circle calmly stepped behind the counter and went trading its own coin.
Why should a holder of a “digital dollar” care about someone else’s venture roulette?
This is where the basic logic of the business itself breaks. What is a stablecoin issuer in a healthy world? It is an extremely boring settlement cash desk. Its only job is to take a real dollar from the customer, park it in short Treasuries, skim a modest cut of the reserve yield for itself and be ready at any second to return that dollar one-for-one. No risk, no venture adventures, no playing with exchange rates. It is precisely for that reinforced-concrete predictability that people hold more than $73 billion in USDC.
Selling your own token for $182 million is a leap into an entirely different business. It is a full-blown commercial deal with investors who handed over almost two hundred million dollars clearly not out of charity, but counting on a future cash exit. Any such story comes with return expectations, closed investment contracts, reciprocal obligations and — let’s call things by their names — a perfectly real risk of failure, multi-million lawsuits and bankruptcy if the project does not take off or the presale buyers are left holding the bag with no listing.
And here is the question from plain commercial logic, without the lawyers’ fairy tales about “untouchable accounts”: why were these two worlds dumped into one corporate pot at all? Why should a person or a company that simply keeps its working dollars in USDC have to think about the fate of Circle’s token venture, guess at the terms of a closed presale and hope that if this gambit collapses, the enraged ARC investors will not come through the courts to bankrupt the issuer and carve up its assets in the general bankruptcy estate?
On the crypto market a stablecoin has always played the role of the combat medic in a field hospital: while volatility shells are bursting all around and speculative coins are burning, you run to him in the quiet tent with the red cross, just to wait out the fight and keep your money intact. With Arc, that combat medic suddenly tore off the white coat, slung the flamethrower of his own tokensale on his back and charged into the attack to make quarterly revenue. It may be a spectacular sight — only getting treated by a doctor like that is getting scarier and scarier.