Circle 3D valuation framework: where is the bottom and where is the top

Author:Woo-xie

 

ICE, the New Haven's parent company, runs 11 trillion-dollar assets, BlackRock and Apoll, the three institutions' attitudes towards chain assets over the past decade, ranging from cold to wait-and-see to test water, have been engaged by investing in companies and never directly touching Token。

But recently, they made an exception。

They bought the ARC issued by Circe, preselling a total of $222 billion, valued at $3 billion, and if they're just looking at Circe, they're supposed to just take stock, choose ARC, and show that they saw something other than stock。

On the same day, Q1,2026 financial statements were issued by Circle, which jumped from 105 to 126 on the CRCL disc, then returned to 115, with a single-day amplitude of more than 20 per cent, which was later collected near 130. This fluctuation in companies with a market value of 30 billion suggests that the market is not thinking clearly: how does Circle value it?

It has been a long time since this item was written, and today I will be thinking about some important and critical issues。

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I. Two faces in the paper

The financial data are clear, but it gives two faces。

One face is growing

The figures are as follows:

Indicator Q1 2026 Changes over time USDC flows 7.7 billion + 28 per cent Quarterly transactions in the chain 21.5 trillion + 263 per cent USDC on Platform 13.7 billion + 350 per cent CPN annualized transactions 8.3 billion (5/7 approaching 10 billion) + 75 per cent Quarterly ring ratio Total income versus reserve income 694 million + 20 per cent adjusted EBITDA 155 million + 24 per cent

Three sets of figures are given separately。

1. Large trade in chains

THE USDC CHAIN HAS A QUARTERLY TURNOVER OF 21.5 TRILLION DOLLARS, AND THE USDC MOVE A SINGLE QUARTER OF THE CHAIN CLOSE TO THE US ANNUAL GDP。

Relative giant:

• Visa 2025 Total processing volume for the whole fiscal year was about 17 trillion, over 23 billion transactions, with an average single value of about $80
• SWIFT HANDLES ABOUT 1.5 TRILLION, ABOUT 11 BILLION NEWSPAPERS THROUGHOUT THE YEAR MAN

The amount of 21.5 trillion dollars in the single quarter exceeds the amount of Visa throughout the year, but this is not the same flow — the $17 trillion in Visa is a pile of 23 billion small consumption; the $21.5 trillion in USDC is mainly made up of large and low-frequency chain transfers, the flow of deFi agreements, re-pricing of traders, and the transfer of institutional funds, with an average value of tens to tens of millions of dollars. It's huge, but pen numbers and Visa are not in a world yet。

However, the magnitude of 21.5 trillion and the rate of increase of 263 per cent have been roughly calculated, with 77 billion in circulation being moved about 28 times in one quarter, meaning that it is the real trade currency in use in the chain rather than the number in the cold wallet。

2 CPN (MAOIST) GROWTH IS AN IMPORTANT VARIABLE

Of the 21.50 trillion-dollar chain traffic, Circe is barely getting the money. Because USDC is an open-door agreement, chain transfers are free, and Circe only earns interest on reserves, not on the transaction itself. CPN (Maoist) is a payment clearing network with a threshold of access, with financial institutions joining and making cross-border payments through CPN (CPN), which charges a base point fee for each transaction (covering compliance, routeing, clearing infrastructure costs)。

CURRENTLY, THE ANNUALIZED TRADE VOLUME OF CPN (CPN) IS JUST OVER 10 BILLION, WHICH IS LESS THAN 0.05 PER CENT OF THE TOTAL TRAFFIC IN THE CHAIN. THE GAP ITSELF IS SPATIAL, WITH A 75 PER CENT INCREASE IN THE CPN QUARTERLY CYCLE, AND A START-UP PAYMENT NETWORK THAT CAN OUTRUN THIS ACCELERATION, INDICATING THAT THE DEMAND SIDE IS REAL。

CPN, if it does, Circe will make money from USDC's use, and it'll keep it at a higher rate and have better economic quality。

Three, USDC on Platform

One of the categories in the figure is USDC on Platform, referred to as USDC, which was deposited on its own platform, and the rate of increase jumped from 5.7 per cent to 17.2 per cent, almost three times. And this item, which, like the CPN above, does not need to be split with Coinbase, is mainly a charge on reserve interest. The greater the revenues from Coinbase, the greater the valuation space for Circle。

The other face is bound

Look at the three sets of data, that's probably why the money came out and fell first:

• THE GAAP NET PROFIT IS ONLY 55 MILLION, AND THE COMPANIES THAT MANAGE THE 7.7 BILLION RESERVES MAKE ONLY 55 MILLION A QUARTER。
• The reserve rate of return was 3.5 per cent, down 66 basis points from the same period last year, with interest rates going down。
• Operating expenditure was $242 million, an increase of 76 per cent over the same period, mainly because the cost of post-market equity incentives had risen。

Reserve income remained at 94 per cent of total income, but the $694 million was lower than the previously agreed projection of $715 million. Overall, it is: less, more, less。
The market is divided into two groups:

It's just an interest machine. The popular phrase is “to buy it better than Coinbase”, where interest income is more than halved alive and contract changes are remote. The moral evaluation that Coinbase saved his life as a knight in white and, to a certain extent, took advantage of the robbery, that Cirecle signed the contract, was meaningless, and the commercial clause was signed, and the decision whether to change it later was in Coinbase。

THIS, ACCORDING TO ONE GROUP, IS A FINANCIAL INFRASTRUCTURE IN THE FUTURE CHAIN THAT DOES NOT HAVE TO LOOK AT THE INTEREST AND SHARE OF RESERVES AT ALL, DEPENDING ON THE CPN, THE ARC CHAIN, ETC., AND THE PROTOTYPE OF THE FINANCIAL OPERATING SYSTEM。
Thirty billion is overestimated if it is an interest machine; and in the case of a financial operating system, the current 30 billion is reasonable。

However, I believe that, in fact, Circe ' s valuations must be multi-dimensional, since several of his operations have clearly different valuation logic, and therefore a three-dimensional valuation method will be established for your information。

II. Circle ' s 3D Perspective

Capital markets price a company by nature by choosing a reference system for it, i.e. by reference to different business models。

(i) Interest business: reference bank

The USDC liquidity is its deposits, the short-end interest rate in the United States is its spread, and the distribution agreement is its cost of payment. Under this frame of reference, if banks are to be compared, they are usually given a margin of 8-15 times, sensitive to interest rates and competition. But Circe is actually much better than a bank, but it has a robust security margin than a bank, and the price is already low. The details will be extended later。

(II) PAYMENT SETTLEMENT: REFERENCE TO VISA, ETC

USDC is its liquidation asset, CPN is its liquidation network, and the rate is its revenue. This reference system, such as Visa and Mastercard, with a 24-30-fold forward-market margin (forward PE), benefits from a compound increase in global payments。

(III) ARC NETWORK: REFERENCE INFRASTRUCTURE

Arc is its executive level, ARC is a coordinated asset, USDC is gas currency. There is no standard valuation under this frame of reference, but only a general reference to the value of the Taifung network and the net effect premium at the time of early Visa ' s listing, and more so to options pricing. Officially, on 11 May, the White Paper was released, which contains many very important elements that we will address later。

These three dimensions correspond to different valuation systems and also play different roles, as one table understands, in our investment operations。

The value of the third dimension, the Arc network and the ARC tokens, the value of ecological options in the future

One down below。

III. First dimension: interest on reserves and drawback

The most well-known way to make money is that it's simple: the user holds USDC, behind which is the dollar reserve of real money and silver. Circe buys these dollars into United States short-term Treasury bonds and buy-back agreements, and eats the rate of return on the national debt. Q12026 This operation has generated $653 million in reserve income, which is annualized at approximately $2.6 billion。

The average liquidity of USDC was $75.2 billion, and the reserve return was reversed by 3.47 per cent. This is the "floor" of the Circle valuation, no matter how Arc and CPN evolve, as long as USDC is out there, the business is certain。

How much of this business should be given to PE and so on, but in short, it's low at bank and high at SasS. With specific reference to the following, it is easy to assess, vaguely correct and preferable to precise errors。

(i) Circle is not a bank or SaaS

Circle does not have a traditional bank licence (although it is applying for OCC National Trust Bank), does not take credit, does not take credit risk, does not have a long-term mismatch and does not need to meet the capital adequacy rate. Its assets are limited to United States Treasury bonds, repurchases and money market funds, and "credit risk" is almost zero。

This is much cleaner than banks。

In terms of whether or not it is a bank, I think the valuation thinking is simple: The worst is a bank-by-bank ratio, 10 times the PE. In practice, however, Crcl's business model is much better than that of the bank, even if it is “attraction”。

The bank is a hard business, lending its clients' money and risking loss of principal. For example, as bank president, you took the money from your client, loaned it to Xu's family stamp, loaned it to any car, it was a popular business, but soon you couldn't get it back. And it's not much, because you're risking a lot, and you're only making a little bit of a difference in interest。

Circle is a steady interest earned on the principal at almost full risk。

However, this pattern of Circe cannot be priced according to the SaaS model, which is known as subscription services, and is often given high pricing because of its viscosity, sustainability, certainty and right to offer. In contrast, the rate of return on the Circe reserve is not priced by it, but by the Fed; and a large proportion of the USDC ' s "users" are not direct clients of Circe - they use USDC indirectly through Coinbase, DeFi agreements, third-party wallets, Base chains, etc。

Circle owns USDC this network, but does not always have a final customer relationship。

Not like SaaS, but not worse than SaaS? Seeing the wisdom. But from my own point of view, Circle's business model is the best business model ever: This is the first time that a private person is entitled to part of the "bond tax"。

A monkey came under the tree and walked straight, turning it from monkey to human。

(ii) Competition barriers to currency stabilization

With such a fat reserve, can the competitor take it off by returning interest? In the case of ordinary financial products, the logic holds. But the stabilization currency is not a common financial product。

YOU TURN TO USDC, WHICH IS USUALLY WILLING TO RECEIVE IT - BECAUSE OF WALLET SUPPORT, EXCHANGE SUPPORT, CHAIN AGREEMENT SUPPORT, LIQUIDITY, EASE OF EXCHANGE, TRUST. BUT IF YOU GIVE THE OTHER SIDE A NEW STABILITY CURRENCY, THE OTHER SIDE MUST FIRST CONFIRM WHETHER THE WALLET IS NOT SUPPORTED, WHERE IT CAN BE CHANGED, WHETHER IT WILL BREAK THE ANCHOR, OR WHETHER IT HAS LIQUIDITY。

THESE FRICTIONS ARE USDC'S MOAT。

THE CORE COMPETITIVENESS OF THE STABILIZER IS NOT "WHO'S INTEREST IS HIGH," BUT "WHEN A MONEY GOES FROM A TO B, B WILL IT BE ACCEPTED WITHOUT FRICTION AND WILL IT BE EASILY USED EVERYWHERE." SECURITY, CONVERTIBILITY, MOBILITY, WALLETS AND EXCHANGE SUPPORT, BUSINESS ACCEPTANCE, REGULATORY COMPLIANCE, CHAIN INTEGRATION, ALL OF WHICH EVENTUALLY BECOME MOATS。

I've written one before, why is Paypal so many users, so many subsidies, and it's not gonna make it to the Circle, or 3 billion dollars? Because the users on the platform saw you pay interest, but he moved away without interest, and he didn't have to care what was behind when he paid. In addition, there were USD1s that were pulled up by subsidies and eventually stopped at the market value of 4 billion。

The new stabilizer will not escape the same fate with subsidies: subsidies will stop and growth will be zero. The window of time left to new challengers will become narrower。

(iii) Inevitable interest rate reductions

Q1 THE RESERVE RATE OF RETURN WAS 3.5 PER CENT, DOWN 66 BASIS POINTS FROM 4.16 PER CENT IN THE SAME PERIOD LAST YEAR. THE REASON IS NO SURPRISE: US SHORT-TERM INTEREST RATES HAVE FOLLOWED THE FED DOWN FOR THE LAST 12 MONTHS。

Interest declined and the same USDC volume of revenue fell, which is certain. But there's another variable: the bigger the USDC, the more money the Circe handles; the higher the interest rate, the more money the unit earns. The two are the real profit。

IN THE FINANCIAL STATEMENTS, USDC FLOWS INCREASED BY 39 PER CENT OVER THE SAME PERIOD, SO RESERVE INCOME CONTINUED TO INCREASE BY 17 PER CENT. ALTHOUGH THE INCREASE WAS FLATTENED BY INTEREST RATES, IF THE INCREASE IN USDC WAS MAINTAINED, THE RATE REDUCTION WAS MEASURABLE AND MANAGEABLE。

So, it's not "the central bank of dollars in the chain" because he earns part of the "bond tax" and the central bank doesn't eat at short-end interest rates in the United States。
Circle is more like a good sailboat: it runs fast when it's windy, but it wasn't invented by the captain。

(iv) Coinbase

1st and 3rd floor

With a total income of $694 million for the first quarter, the net retention rate (Net Reserve Margin) was only 38 per cent, with a large portion of Coinbase ' s share and other costs. Circle, this "eating interest" money machine, for every dollar of interest, only 3 cents 8 is on its own。

Specifically, Coinbase's score is three layers in order:

One is the issuer's retention. Circe first collects a base point based on USDC traffic, which is retained as issuer. The rates disclosed in the equity book ranged from low two-digit to high-digit base points (approximately 0.05 to 0.15 per cent), decreasing as circulation increased. At the current level of $77 billion in circulation, the amount is estimated at tens of millions of dollars in volume. Not much, but it's Circle's money before all splits begin。

Two is the split of the platform. The section on the Coinbase platform belongs to Coinbase; the section on the Circle Mint, Gateway, Wallets belongs to Circe。

Third is the residual distribution. In a third-party scenario, COINbase also receives 50% of the reserves generated by DeFi, other exchanges, third-party wallets。

Overall, this is a significant and sustained expenditure. Signed in August 2023, with an initial period of three years, due in August 2026. If both parties had complied with their obligations and had not agreed on amendments, the contract would be automatically renewed for three years. There have been recent statements from Coinbaes that the contract is permanent and unterminable. In fact, in legal terms, it's either Coinbase's obligation not to reach agreement in the future, or it's the legal dimension that gives Circe the advantage of revisiting it. In short, this part is now in the position of “no change for the time being”, and the next half-year is an urgent window: The renegotiation period will come, and then the way the Clear Bill lands will determine how and what to talk about。

It's not necessarily a bad thing

And it's in return, Coinbase, not just the blood-sucking side, but the most important distribution network of the USDC, bringing mobility, user access, trading scenes, Base ecology, institutional touch and brand endorsement to USDC。

Without Coinbase's channel, USDC can't do 77 billion from zero. Coinbase eats USDC economy, but also helps USDC do scale。

Small partners who have just learned about the stock market may find the withdrawal too disgusting and psychologically unacceptable, but in practice the business is big and basically cannot rely on “food alone”. This is common in business models: in the well-known cases of Visa and Master, each income earns only about 10 per cent, while the rest are removed by banks, for example, by 85 per cent, and then by various POS machines and networks。

As a result, Visa and Master were drawn much harder than Circle, but without prejudice to their becoming a multi-billion-dollar business。

EACH OF US DOWNLOADS FROM A MOBILE PHONE STORE, OR THE FULL COST OF THE APP, IS DRAWN FROM APPLES AND GOOGLE TO 15-30 PER CENT, AS IN CHINA, WHERE APPLES USED TO SMOKE 30 PER CENT OF MOST APS, DOWN TO 25 PER CENT IN 2026. IT DOESN'T AFFECT THE APP GIANT TREE。

III. Growth outside extraction

For Circe, instead of discussing when less money can be spent on partners, focus on: Can Coinbase grow significantly outside its division

There are already small points on the data. The USDC on Platform is rising, and the daily weighted average has risen from 5.7 per cent to 17.2 per cent over the same period last year, which means that the part that Circe left behind is growing faster. Q1 Retention rate up 1.5 percentage points and ring-up 1.3 percentage points on the same date is also reflected。

Others in the current income structure, CPN, Managed Payments, Agent Wallets, Agent Marketplace, Arc feel Capture, will all be a source-free source for Circle。

(v) Regulation may instead protect Circle

At present, both of the relevant bills are of long-term protection and benefit to Circe。

1. The Genius Act has landed。Officially signed in July 2025, the first federal framework for the payment of stable currency in the United States. Section 4(a)(11) expressly prohibits: the issuer of a stable currency may not pay to the holder of a stable currency any form of interest or gain (whether in the form of cash, token or other value) if such payment is based on the possession, use or retention of the stable currency itself. The Act entered into force on 18 January 2027。

The problem now is that everyone is making a disguising interest, for example, by working with Corinbase to get Coinbase to do it; the same logic is used by the USD1 in certain distributions。

So the second bill would have to ban this disguise。

The Clarity Act is still under negotiation。It is a broader digital asset market structure bill, and the central legacy to be addressed is that the Genius Act does not explicitly prohibit the payment of interest-type incentives to holders by "associated parties or third parties"。

ON MARCH 24, CRCL DROPPED BY 20 PER CENT ON A SINGLE DAY, MEANING THAT THE MARKET INTERPRETED THE EARLY DRAFT OF THE CLARITY BILL AS AN ATTEMPT TO EXTEND THE PROHIBITION COMPLETELY TO RELATED PARTIES AND THIRD PARTIES. BUT LOOKING AT THE EVOLUTION OF THE BILL, THE RESULT MAY BE MUCH MORE MODERATE THAN THE INITIAL PANIC, AND IT HAS RECENTLY BEEN PUBLISHED。

Another parallel line of supervision is also on the way. GENIUS Act only prohibits the issuer from paying interest directly to the currency holder, but OCC issued the proposed rules in February to go further: If the issuer distributes the proceeds of the reserve to the related party, then the related party transfers it to the currency holder in the name of an "incentive", OCC presumes that you broke the law and you prove yourself innocent. This is exactly what Coinbase is doing, but since this rule is still in the proposed stage, the final rule is expected to be in place by mid-2026, while GENIUS Act as a whole will come into effect by January 2027. If you land, Coinbase's reward will have to be adjusted。

However, Clarity Act legislation and OCC rules have different effects, and now the issue of interest payments is also being discussed by Clarity Act, so Clarity Act has been defined and OCC has done so directly。

It is interesting to note that, previously, Circe and Coinbase had different attitudes towards the bill:

• Circle's CEO and policy head publicly praised OCC's rules. Because if Coinbase can no longer transfer the split to the user, the percentage paid by Circle to Coinbase may have negotiating space in the future, and Coinbase’s largest offer to attract users to hold USDC has been weakened。
• Coinbase publicly objected, submitting an objection to OCC that such a rule would harm consumers。

3. Impact on the operations of the Circle Reserve

The result, though not yet available, is that the direction can be introduced in the first place: passive holding can be reduced in the way interest is earned, in either way and in the space。
I personally assume that this road will not be blocked as banks wish. Before, I wrote three words about the essence of the United States dollar:

The stabilization currency is the second-growth curve of the dollar, the dollar debt。

For the first time in history, a top-class business model could share some of the seigniorage taxes。

The United States Government is the biggest driver of the compliance and stabilization currency。

From these three lines, I have greater confidence that the decree will not reverse the system. In addition, it is worth mentioning that the two bills have been promoted jointly by a very small number of the two parties in the United States, even in the future。

The growth of a stable currency is in essence consistent with maximizing the benefits of the dollar。

However, no matter how much the decree landes, it is a bit harsh or looser. It is good to maintain the moat in the Circle, and if it is tougher, the rivals will not be able to take their share by smashing money (although, for the time being, it is undisturbed) and the competition will return to something more difficult to replicate – security, compliance, exchange networks, wallet coverage, business access, chain integration, liquidity depth。

In addition, for the time being, the two Acts are, in fact, a possibility for USDT to reverse the fundamentals because of the compliance advantages and construction of the Circle, all of which are Tether's shortboards。

Second dimension: new hope in three new operations

Reserve income is "money from interest rates", it's money from the government, it's money to split. So, other income is the money that Circle earns from its own products and platform capacity, and it doesn't need to be distributed。

Q12026 OTHER INCOME OF 42 MILLION DOUBLED FROM 21 MILLION IN THE SAME PERIOD LAST YEAR. THE COMPANY FY2026 DIRECTED TO EARN 1.5-170 MILLION A YEAR AT AN ANNUAL RATE OF ALMOST 100 PER CENT. IT'S NOT MUCH, IT'S ONLY 6% OF TOTAL INCOME, BUT IT'S MUCH MORE IMPORTANT THAN IT IS TODAY。

(i) High ceiling for “other income”

There are three other earnings in the book:

• Transaction services (processing of stable currency payments, payments to vendors/suppliers/end users, book management, ancillary digital asset transactions)
• Integrated services (implementing services that connect stable currency to the public chain)
• OTHER SERVICES (USYC ADMINISTRATION-RELATED COSTS, STABILIZATION RANSOMS, CROSS-CHAIN TRANSFER FEES, DEVELOPERS SERVICES, ETC.)。

All three are revenues generated by Circe's own products and platform capabilities, which need not be divided, but only its own costs, such as compliance. It differs significantly from reserve income:

One is not dependent on interest rates. Reserve income is closely related to the high and low interest rates, while the growth of other income is almost entirely product- and client-driven and business can grow even in the interest-rate cycle, providing a counter-cyclical quality of profit to Circe。

Two is higher than the ceiling. The reserve is a business for interest, and although it is currently the backbone of income, there is a ceiling for higher interest rates, while payments for networks, business services, AI agency payments are the result of open ceiling markets, with Visa ' s market value of about $59 billion, which is the result of the combined interest effect of payment networks。

The third is close to the service fee. This part is similar to SaaS-type income, which is more pure, more sustainable and more ceiling。

For such high-growth services, the P/E valuation is generally not used, and the peddles, apples, and lots of pE are available, depending on how much the company earns, how much a year, and how much the market value, there is an approximate number to pull. However, in this section, Circe can be calculated using market rates, i.e. PS, as FY2026 guidance of 1.5-170 million, or, if 10-20 times the market rate, the equivalent of about 15-34 billion。

It is currently small, but it is a seed for a logical change in valuation。

(II) CPN: LARGE TRANSACTION VOLUME, NOT EQUAL TO LARGE REVENUE

CPN is the Circle Payments Network, a global payment network of companies. Its narrative is challenging SWIFT to do 24x7 in dollar clearing。

Q1 Data: The annualized trade volume is 8.3 billion (based on the last 30 days of the year in March), with quarterly ring growth of 17 per cent. On May 7th, it was close to 10 billion, and the Quarterly Rings increased by 75 per cent. The number of financial institutions on the Internet is 136, with a 36 per cent increase in the quarterly ring. In April, the Managed Payments was launched to package the infrastructure package to traditional banks and payment service providers。

83 billion sounds not small. The payment network, however, does not depend solely on the amount of the transaction. Business payments, cross-border settlements, and institutional financial flows are usually large in monetary terms, while the rates may be low. The payment network really depends on the volume of the transaction x rate = revenue。

Annualized trade volume 5 basis point income 10 basis point income 20 basis point income 8.33 billion (current) 4.2 million 8.3 million 16.6 billion 500 billion 25 million 50 million 110 billion 150 billion 120 billion 250 billion 5 billion 1 trillion 50 billion

AT 5-20 BASIS RATES, THIS IS A COMMON RANGE OF PAYMENT NETWORKS, WITH HIGH CROSS-BORDER PAYMENTS AND LOW CLEARINGS ON THE NET CHAIN, WITH REVENUES FROM THE CURRENT ANNUALIZED TRADE VOLUME OF THE CPN RANGING FROM 4 TO 17 MILLION。

ON ITS CURRENT SCALE, CPN IS NOT THE MAIN PROFIT-MAKER。

But it is a key validation indicator for the platformization of Circle. If CPN (CPN) achieves an annualized turnover of hundreds of billions of dollars over a three-year period, the rate of 10 basis points corresponds to 100 million income; if it is on a trillion-dollar scale, it corresponds to 500-20 billion income. And that's when CPN can really change the Circle valuation structure. Of course, it's too early to see what the rate is。

ON MAY 7TH, AT AN ANNUALIZED RATE OF NEARLY 10 BILLION AND A QUARTERLY RATE OF 75%, CPN HAS A HIGH PROBABILITY OF SPENDING A YEAR TO 20-30 BILLION. BY THEN, THE MARKET WOULD HAVE REASON TO REDEFINE IT FROM A NARRATIVE PROJECT TO AN EARLY REALIZATION PAYMENT NETWORK。

(III) AI PROXY: WAITING FOR AN "AI ECONOMIC ACTIVITY" ENTRANCE

Another undervalued publication for Q1 is the AI Agent Stack。

It contains command line tools (Circle CLI), proxy wallets, proxy market (Agent Marketplace) and micropayments. The minimum transaction value for micropayment support is 0.0001, or one million dollars。

THE EXISTENCE OF THIS AMOUNT OF PAYMENT INDICATES THAT IT IS NOT FOR HUMAN USE, BUT FOR AI AGENTS. AI AGENTS CALL EACH OTHER API, BUY EACH OTHER'S SERVICES, SETTLE EACH OTHER'S ACCOUNTS, AND IF THIS REALLY BECOMES THE MAINSTREAM FOR THE NEXT DECADE, THEN "MACHINE-TO-MECHANISM STABLE CURRENCY PAYMENTS" WILL BE A COMPLETELY NEW MARKET. THE STABILIZATION CURRENCY IS NATURAL FOR THIS SCENARIO: CHAIN, LOW RATE, PROGRAMMABLE, 24X7, CROSS-BORDER。

AI has no quantifiable income contribution and is a purely option. But it's compatible with Arc, Arc is the settlement layer, and AI's proxy stack is the application layer entrance. When the two are together, the logic is complete。

V. D: Arc and ARC - to grow a stable currency operating system

THE ARC FORWARDING OF $222 MILLION IN COINS, VALUED AT $3 BILLION (FDV), IS ANOTHER MATTER PUBLISHED IN THE NEWSPAPER ON THE SAME DAY OF MAY 11TH, AND I THINK MY OWN AMOUNT OF INFORMATION IS NO LESS THAN THE FINANCIAL ITSELF。

Circle defines Arc as "Economic OS on the Internet". It sounds abstract, but if you open the stack, the logic is clear:

• USDC IS A MONETARY LAYER
• CPN IS THE PAYMENT NETWORK
• Arc is the settlement and enforcement level
• ARC IS A GOVERNANCE AND COORDINATION ASSET
• AI PROXY TOOLBOX IS AN AI APPLICATION PORTAL FOR ECONOMIC ACTIVITY

If USDC is a dollar on the chain, then Arc is the highway that keeps the dollar running on these chains. USDC is money, Arc is the road, ARC is the coordination mechanism for this road。

Arc, what do you want to do

Arc is an EVM compatible Layer 1 chain. Several of its core design options point to a goal: to turn stable currency into a default base for institutional finance。

THE LOCATION OF THE CHAIN IS VERY DIFFERENT FROM THE CURRENT L1。

• The Ether Workshop is a priority for de-centreization and is institutionally friendly
• Solana is a performance priority supported by institutional services。
• Arc is an institutional priority, a compliance priority, a stabilization priority, and decentrization is a progressive goal。

On this chain, USDC, as a primary gas (procedure) currency, means that the agency's customers do not need to hold ETH or SOL, which is a volatile currency, to pay fees; subsecond-level terminality, which means that the speed of transaction confirmation is sufficient to support real-time settlement; optional privacy design, which means meeting the financial institution's requirements for confidentiality of transaction details; and a back-quant signature programme, which means that even when quantum calculations are mature, they do not destabilize the bottom level of security。

Arc ' s economic mechanism: in stable currency, but the agreed costs will eventually be converted to ARC at the level of the agreement, with part of the converted ARC allocated to certifying and pledgeors (network characteristics, requiring pledge to guarantee decentrization) and the other part destroyed to offset procedural inflation. This mechanism of "use conversion partial destruction" is similar to EIP-1559 in the Ethers, which means that the more network activity, the greater the deflationary pressure of ARC。

The open testing network came online in October 2025 and as of May 5, more than 244 million transactions were processed. More than 100 institutions have been involved, including BlackRock, Visa, Goldman Sachs, State Street, Deutsche Bank, AWS and Anthropic。

The main network, Beta, is expected in the second half of 2026。

THE LUXURIOUS LIST OF ARCS

List of investors: a16z crypto (leading 75 million), Apollo, BlackRock, ARK Invest, Bullish, General Catalest, Haun Ventures, Intercontinental Exchange (NYSE parent company), IDG Capital, Janus Henderson, Marshall Wallace, SBI Group, Standard Chartered Ventures。

In this long list, ICE is the New York House parent company, BlackRock runs 11 trillion assets, and Apollo is the top global alternative asset management company, a large-scale traditional management giant, a global exchange operator, Asian capital, and in the same round of pre-sale public-chain coins, an unprecedented configuration in the industry。

If these institutions were to look after the company, it would be enough for them to buy the CRCL shares in the secondary market, choosing ARC to show that what they saw was the value of the Arc network itself。

3. Value to the Circle shareholders

ARC TOTAL 10 BILLION. THE DISTRIBUTION STRUCTURE IS:

• Circe holds 25% (2.5 billion)
• Eco-participants 60% (6 billion)
• Long-term reserves 15% (1.5 billion)

In full amortized valuation of 3 billion, Circle holds a portion of the nominal value of 750 million. Here's what we need to know:

First, value does not equal cash. ARC tokens currently do not have open trading markets, the main network is not online and pre-sale investors are locked for at least one year (after the PoS transition), which may be extended to four years. Circe owns 2.5 billion unlocked paths similar. This nominal value will not be converted to short-term profits - and it is reasonable to estimate that this part of the hold-up of Circle will not be sold, presumably participating in network governance and obtaining network revenue, including through pledge。

Secondly, value is distributed among many. The ARC White Paper disclaimer states that ARC does not represent anyone ' s equity, claim, red power, income-sharing, liquidation rights, ownership rights or any claim to the income, profits or assets of the Circle. This sentence is extremely important for the CRCL shareholders. Legally, there is no direct claim between the value of the ARC tokens and the interests of the CRCL shareholders. If the Arc network is large, the value is allocated to the CRCL shareholders (the 25 per cent held through Circle), the ARC token holders, certifyers, pledge holders, eco developers, early investors, and the CRCL shareholders are only one of the beneficiaries。

THUS, THIS PART OF THE ARC NETWORK VALUATION, TAKING INTO ACCOUNT THE SLIGHT DISCOUNTS ON THE TWO ABOVE POINTS, AND TAKING INTO ACCOUNT FUTURE CONTRIBUTIONS TO THE NETWORK, COULD INCLUDE IT AS AN ASSET THAT WOULD NOT BE REALIZED DIRECTLY, DEPENDING IN PART ON THE SHORT-TERM MARKET VALUE ACHIEVED AS A RESULT OF SHORT-TERM NETWORK ENGAGEMENTS AND, MORE IMPORTANTLY, THE VALUE CAPTURED IN THE CONTEXT OF REAL NETWORK DEVELOPMENT。

THE MARKET HAS A MUCH HIGHER ESTIMATE OF THE CEILING FOR INFRASTRUCTURE PROVIDERS SUCH AS ARC THAN THE “INTEREST-EATING” BUSINESS。

Today, 30 billion is gambling

NOW WE CAN MAKE A SIMPLE SOTP (DIVISION PLUS TOTAL VALUATION METHOD) VALUATION IN THREE DIMENSIONS。

BASED ON CURRENT ANNUALIZED CALIBER (Q1 DATA X 4):

First-dimensional reserve operations. Valuation formula: Annualized reserve income x retention rate after distribution x after-tax factor x reasonable market gain。

Annualized reserve income 26.12 million. Based on the net retention rate of 38 per cent of the reserve, after distribution, with a retention rate of 993 million, net of taxes and administrative costs, etc., is expected to be around 600 million, at a rate of 10-15 times the market rate, with a corresponding estimate of 6-9 billion。

The valuation floor for this business is thick, but the ceiling is limited - because it is sensitive to interest rates and to distribution agreements。

OTHER INCOME IN THE SECOND DIMENSION. THE MEDIAN FY26 VALUE OF THE GUIDE IS 160 MILLION, CORRESPONDING TO 16-32 BILLION AT 10-20 TIMES THE MARKET RATE (COMMON RANGE FOR EARLY HIGH-GROWTH PLATFORM OPERATIONS)。

THE CURRENT ANNUALIZED TRADE VOLUME OF CPN (CPN), WHICH STOOD CLOSE TO $10 BILLION IN MAY, HAS NOT YET REACHED A SCALE THAT CAN CONTRIBUTE SUBSTANTIAL PROFITS, BUT DOES NOT INCLUDE THIS COMPONENT FOR THE TIME BEING, AS A POINT OF ADDED VALUE IN THE CALCULATION。

Third dimension Arc network with ARC tokens. Circe holds 25% ARC with a nominal value of 750 million. There are differences in the valuations of each individual in this section, some who feel that they cannot sell and that there are few in the chain, some who would have thought that when it's real, it's more than the current value。

THE THREE-DIMENSIONAL GENERAL, WHICH IS ABOUT 10-15 BILLION IN THE CURRENT ANNUALIZED CALIBER, LOOKS LOW, BUT BE CAREFUL TO LOOK FOR SOME SORT OF CLEAR MARGIN OF SECURITY WITHOUT THINKING ABOUT DREAMS, ABOUT FOMO, ABOUT NARRATIVES, ABOUT CHIPS, AND SO ON。

THE CURRENT MARKET VALUE OF CRCL IS AROUND $30 BILLION, WITH THE DIFFERENCE BEING THE MARKET PRICE FOR GROWTH-ORIENTED GROWTH UP TO 3-5 YEARS OLD, ASSUMING A COMPOUND GROWTH OF ABOUT 27 PER CENT, USDC SIZE OF 200 BILLION, A STEADY INTEREST RATE OF 3 PER CENT AND OTHER INCOME OF 35 PER CENT, AMONG OTHERS, AND THEN PRICING AT A SLIGHTLY HIGHER PE。

However, I've always thought that holding the calculator can only be used for cheapness, and that investment is by no means calculated with the calculator, but ultimately depends on business patterns。

The business model is right, it's cheaper, it's not too much to look at; the business model is wrong, you're the cheapest and the missing。

Dingping bought apples and then fell by 50 per cent, which did not affect his ability to make a living, or his understanding of “the apple business model”。

In a recent talk about Wang Shik, Te Park asked: What do you think is the greatest gain

He said, "My greatest gain is that I asked him, what is most important for the company, and he said business models. I'm impressed because we look at the company. I say what you're looking at first, he says business models. If business models are wrong, I won't go down. He's got a filter. He's talking about right people and right prices. I don't even say the right price。