Circle Arc 和 ETH

During the Circle earnings call, progress on its self-built mainnet Arc was mentioned. A fellow investor asked whether this would pose competition to ETH. Here's my take:

The essence of Arc is a "compliant enterprise intranet." Through its underlying KYC/AML mechanisms, it creates a clean "sterile room," enabling traditional financial capital to dare to enter. However, as a permissioned chain, Arc does not possess, in the short term, the vast and freely nested DeFi ecosystem and liquidity depth found on the Ethereum mainnet.

This means that no matter how USDC circulates on Arc, when these institutions seek higher yields (such as on-chain yield generation, complex derivative trading), the capital will ultimately spill over to the ETH mainnet, which has the deepest liquidity, via Circle's cross-chain transfer protocol. Because here lies the world's largest liquidity pool, co-built by giants including BlackRock, and the strongest decentralized consensus.

I think the relationship can be analogized to a hub and spokes:

Hub (Core Nexus): ETH Mainnet. It's like central banks of various countries; it doesn't handle ordinary people's coffee purchases, only final settlements between nations and between large institutions. It captures the highest security premium of the entire global financial network—because behind it are hundreds of thousands of independent validator nodes with the widest global distribution and an extremely high degree of decentralization. This is a moat that no single Wall Street institution can buy with money in the short term.

Spokes (Business Branches): Circle Arc, JPMorgan Onyx, and even Coinbase's Base chain. They are like major commercial banks and payment gateways. Citibank's clients might trade USDC on Arc, JPMorgan's clients trade on Onyx. When they need large cross-bank settlements or cross-ecosystem investments, funds complete final delivery on the Ethereum mainnet via cross-chain protocols.

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