Circle's New Blockchain Is Built for More Than Stablecoins

Transcript

Regularization. I am with Nikil. He is the chief product and technology officer over at Circle. And coming out of Circle, we've got a pretty big announcement. Nikil, today is the day. Tell me about what day this is. Today's the day of our uh launch. We're launching ARC uh mainet. We've been working on it for years. We're very proud of the launch today. So, uh it's the first day of a very long journey for us. So, very excited to be here. >> Well, congratulations on mainet day. That's always a very special day. talk to me about what make arcs arc unique like what are the special properties what are the unique properties that arc is bringing to the table >> right I think like u I think it's useful to uh step back and like talk about circle a little bit like circle started

off as uh a stable coin issuer and um and built what is now the largest regulated stable coin um ARC is taking that idea of like building regulated financial infrastructure that bridges like what is traditional financial institutions and all this new innovation and takes that idea forward and brings it to the local brings it to an L1 layer. Uh so the core features of ARC are things that people may have heard about already like this is uh we have something called uh we have something called payment finality which allows for transactions to be truly final within uh once they're settled. uh settlement time

is half a second uh which allows for uh which allows for uh minimizing risk along with the payment finality and like allowing you to do like rapid transactions on the network. gas is in uh stable coins starting with uh USDC so you don't have to hold a native network token while for crypto users this may feel like a small feature for companies that are transacting uh that are holding treasuries that are transacting in RWAs this is a very significant hurdle to cross because uh they don't know how to account for things like uh like native native network tokens and so not only do they have to like hold uh inventory of native network tokens but they also don't know how to count those native native network tokens on on their books. So that's a

pretty big deal. Um we have other things that are launching that are like really unique for a blockchain that sort of speak to our full stack uh nature. We have ARC studio which allows you to uh sort of talk to an AI and deploy a custom contract uh which is how we think like all financial arrangements in the future will happen. Uh we have um we have our kits which allow you to build like custom apps on site on on top of arc. So we've not treated this as just a network launch but we've treated it as a full stack like hey you want to build a financial application today. How do you get started? What are all the primitives you need all the way down from like the network layer all the way uh to the top uh being the application layer. So

that's what's unique about us. I mean um and we're very excited to get it out. I do want to zoom in and expand that tech stack and talk about the different components. But if we were to collapse the tech stack and really summate everything, how would you meme meify arc chain? So, you know, Bitcoin is hard money. You know, Ethereum's northstar is like decentralization, permissionlessness. Uh Salana is NASDAQ on the blockchain. Uh what what's the meme for ARC? What is your guys' north star? How would you collapse everything you guys are doing into a simple idea?

>> I mean, we've called it economic OS. And when we say economic OS, we think about uh things that went like I mean, I grew up when phones came about and uh when phones came about like when Android came about at Google, I was there and there were six plus operating systems in the market at that time. So, it wasn't clear you needed another OS in the market. And what Google did uniquely was it said like we have a problem that we have to solve for chip makers. There's a problem that we have to solve for handset makers. We have to solve a problem for developers and we have to solve a problem for users. And if we solve all of those all of those problems together, we will have a very successful operating system when other operating systems in the past had taken like a sliver of the

market and solve the problems for that uh sliver of the market. So when we think about ARC and we think about building an economic OS, we're thinking about solving the full stack of problems. I want to solve application level problems. So like problems like sign this transaction or sign sign multiple transactions to something as simple as sending USDC from one wallet to the other should not be a thing that users have to deal with, right? Users should not have to think about things like gas. Like what is gas? It's a very complicated concept. Engineers understand it. Crypto users understand it. But like if you believe 5 billion users who are on phones today are going to be using this financial infrastructure then I don't think we can explain gas to them. We need to be able to explain local money to them. So we

have 16ish stable coins launching on uh ARC today and we want to make sure that like users are able to interact with like the blockchain infrastructure using the currencies that they fully understand. They don't have to use block they don't have to use bitcoin or ethereum or or any other chain for that for that matter. So I think it is like economic OS like it's less of a meme. I know it's a little more nerdy than uh what a meme could be. Uh maybe a meme will emerge that'll like uh sort of sum up what an economic OS could be. Uh but yeah, I mean like it's only day one. So I'm very hopeful like that the internet will deliver. Let's do just a little bit of the homework that we need to do to understand ARC. What are the the technical properties that like crypton

natives the the hardcore cryptonatives that want to like pop open the hood and compare ARC to our frame of reference which is like Ethereum for example. So uh ARC has a validator set. Uh there's some parts of the validator set that are permissioned. Maybe you can talk about just like the basics of the protocol and how that like diverges from what the standard is. >> Yeah. So the validator set is permission and we can get into why it is permission uh if you have to but the deployment of contracts is not permission like so anybody can come deploy you don't need a developer key from us you don't need like you don't need to sign up with circle uh so in in that way it is very much permissionless deployment uh we don't we don't control like what

contracts you interact with control what chains you interact with like it is truly permissionless infrastructure it is a val it it is a permission validator set because for the kind of traffic that we're hoping to get in addition to like core internet crypto traffic or the new kind of traffic that we want to get. Those users want to know who the validators are. They cannot rely on unknown validators today. And we do believe like we are at the early stages of getting this institutional traffic onto onto the chain. And so that's why we have a permission validator set and like it makes it it makes getting that traffic easier. So uh going back to the questions of like what what else is like unique about the chain technically we have uh we announced that we're going to

be doing uh postquantum signatures uh it should launch uh in beta um uh very soon uh and that'll allow for uh postquantum signatures like you know essentially wallets can enforce like postquantum signatures. uh other things our privacy sector so like we've talked about privacy for a long time uh on on chains uh current privacy solutions are cluji uh and when I say cluji as in like average user who's using a wallet uh is either giving up self- custody or is taking on significant financial risk when they're like engaging in privacy um what we want to do is do something as simple as like you toggle a switch and you can take a transaction that was

going to be a public transaction and make it a private transaction so you can have a mix both public and private transactions using the same wallet interface. That's unique. Um there's other stuff under the hood that makes it possible for us to achieve the subsecond final finality. We have a new consensus layer. We've already talked about it. Uh we acquired this company uh to get the Malikite consensus layer. Um all of these things together sort of uh build uh what is sort of unique about ARC from a from a technical perspective. Uh there's going to be new innovation as well like we're going to be looking at other custom sectors for specific type of traffic whether it's agent traffic whether it's payments traffic uh so that we can have like fast transactions for

these new economic actors like agents that are emerging but that is still a work in progress. >> I see let's since you brought up privacy let's just dive into that part. You said that there are public transactions and private transactions feels pattern patterns wise similar to Zcash. You have shielded Zcash. You have unshielded Zcash, but is the privacy on ARC complete? Like does ARC and the validators are they able to kind of backdoor the privacy or is the privacy actually like as strong for example as something like Zcash where if it is private it is truly locked down and private? How would you qualify the level of privacy that you get on ARC?

>> I am not an expert on Zcash even though I use Ccash uh plenty. Uh I will say I will answer the specific question which is like validators are not going to be able to look at your transactions. That is not a thing that we want. Uh that defeats the purpose of having uh uh having privacy like I I don't like the whole notion the whole all private transactions essentially run through tees which is a trusted execution layer and and and nobody's able to look inside those image circle cannot look inside those transactions. So like when I say privacy, it is true privacy and uh financial transactions is just is just day one of like what we think like these these things can enable. I'm looking

forward to other kinds of applications like one one of my favorite applications is uh uh sort of medical applications. Uh I I'm sure everybody has this experience in their family where they have some medical data about that they're like talking to a GPT about and and um and there's some risk in that. It's not like risk-free in that like you will leak that the GPT might leak that uh uh information to whether itself or to others. And so one application I'm really looking forward to is uh is essentially being able to fire up like a custom BM that has uh a GPT and all of my like all of my health data being privately encrypted and and me being able to ask like questions in privacy

and at the end of it being able to destroy that BM and essentially get the answers I need and have all of the data encrypted and stored on chain. So that is not possible today and and so and instead what I have to do is like I sign up for stuff I don't fully understand. I give it information. I don't I have to just trust them as to what they're going to do with my information. So privacy is just the beginning. Privacy is a is a in my mind uh a property of like verifiable compute in many ways, right? like you're telling me that this transaction is going to be private and so but there are many things in verifiable compute that are yet here yet to come and um I think blockchains and like R can play a key role as we evolve sort of like this core

computing architecture that like we have come to rely on for the internet >> and just to just to uh make sure I understand the question the answer the trust assumption for privacy on ARC is via TEES that is how ARC achieves privacy that is the trust assumption >> we have an privacy sector like we talk about it in the white paper like essentially yeah >> right no one can look inside a TE except for the manufacturer manufacturers probably not doing that um is there a plan to evolve the privacy to something like like straight cryptography or are we satisfied with like the TE as the trust assumption >> for now I think we're satisfied with the TE as the trust assumption because we also have like performance constraints uh that we want to implement yeah and

that is one of the features of a known validator set like we know what the TE's are where they're running. >> Uh and that doesn't mean that you cannot engage in like private cryptographic transactions like that is a thing that we have uh postquantum signatures that we that like I said like we're going to go into beta with um those are private like those are you can engage in other kinds of cryptography on the platform like just for the purposes of like entering into a private send receive between you and I. Yes, we have a debased architecture.

>> I want to learn about immutability. Say I am a user on the arc chain and I mess something up and I've lost a meaningful amount of USCC, $10,000, $100,000. Uh, and I'm actually also in this scenario able to prove to you that that USC is like actually gone, locked, frozen, burnt, whatever. Am I able to get my money back in any particular way? What's ARC's relationship with immutability? It is all immutable like it is not like uh it is it is like any other blockchain like uh unfortunately or fortunately like I think there's pros and cons uh to immutability. What you're describing is a con. Um

I'm not interested in rolling back the chain for >> okay >> for anything like unless there is like a >> rolling back the chain is not a property is not >> it's not a property of the chain right like it is not like it is it is a it is such a significant event uh to do that um uh I think users should be careful about like the USDC that they're using or for that matter any token contract that they're interacting with on ARC much like they would be careful about interacting those interacting with those token contracts elsewhere. Um, we don't have any special powers like essenti over here like change the course of the transactions.

>> There's like this this right of passage that all successful blockchains go through when they are sufficiently successful and it's the it's the Lazarus event. So, ARC wants to be successful. I want you guys to be successful. I want you guys to have billions and billions upon TVL. your success is going to attract Lazarus Group. Lazarus Group is pretty successful. They might get away with something uh and they might get away with something large. Um what what do you think about when you think about the potential future event of like the Lazarus group extracting a million plus dollars out of Arcane? Have you guys discussed this possibility?

What what comes to mind when I put these words in your brain? I mean look security is a key concern like we are focused um we are very focused on like making sure that uh the chain is secure we're running audits 24/7 um and uh >> I think I mean more in the app layer like say a for example gets implemented or some lending protocol gets implemented and they get exploited by Lazarus group and Lazarus group has tens of millions of dollars hundreds of millions of dollars of USDC I don't want to speculate on like the specific scenario and like you know I don't know what's going into like you know this uh this sort of security violation but I'll say what I'll say is like the simple

principle is it is an immutable chain it is public infrastructure there are 20 plus validators like it's an immutable chain where we are we're running public financial infrastructure and we want to do that in good faith right so like I don't know what the specific scenario is and I think there are a lot of such scenarios and there are a lot of different like input conditions that go into like the evaluation of the scenario. So like I I don't I don't want to speculate on like how we will handle it but at least the principle which like going into it is like look it's an immutable chain we want to make sure that it is it follows the properties of uh other immutable chains that are on the public internet and I think if you break that I think you break trust at a

level that like I think people will have a hard time like sort of like establishing that trust again. So but we want to be responsible actors in the market. We want to make sure that like our chains are secure, our apps are secure. We want to give like security services offering to like uh we want to make sure that like people who are deploying are like know know the chain sufficiently that they're not deploying like insecure apps on the chain. Let's talk about what activity is going to be early in the ARC ecosystem. So there are some of like the the usual suspects that we would see coming online with an EVM layer 1. I would expect to see a unis swap, an AMM come online, something like a so talk to me about what the usual suspects are and then also I want to

hear about the unusual suspects, the new partners, the new economic activity that hasn't been found elsewhere in the ecosystem that you are hoping to see come to ARC in its early days. So talk to me about the usual and also the unusual suspects. >> Yeah, I mean I think the usual suspects are like the borderline protocols are the AMMs. It's the all the exchanges that are like uh all the big crypto exchanges that are in the market. Um we have the unusual suspects are um I guess the large asset issuers like they are they have dipped their toes but I expect them to be more prolific uh on ARC than they have been elsewhere. Um stable FX which I've talked about which is like

our foray into making sure that uh blockchains work not just for US dollars but also work for other currencies around the world. Um and then there's a bunch of like agentic activity like we have like you know um we have a whole agent stack that we have uh uh issued today. Uh we are in the process of like issuing creating more like agent primitives that allow for agents to prove provenence, agents to prove uh uh what they have done in the past like essentially being able to prove history and and so I'm expecting more of that activity like you know and and it'll probably be around things that are like native to blockchain sports which is trading and such like I think a lot of these agents will do that. Uh I am

expecting a ton of like credit activity to happen. And the one of the things I'm excited about is agentic credit activity. Like you know you start up an agent, you get a little loan and then you go out and like make a little money and then you pay the loan back and and then you sort of spend this. I mean looping will take a whole new meaning uh once this like once these credit markets start functioning uh on ARC and elsewhere. Uh and so I think that will be new. Um uh what else? Um and there's all I mean look it's a it's a public chain. It is fully connected uh to all of the other 35 chains where USDC is. It has deep connectivity. It has the ability to bridge any asset to any chain. Uh and so u I'm expecting

memecoin activity to like you know what I call like you know culture apps. Um they like memes are not like some part of the internet like frowns on memes. Uh I think memes essentially create culture like culture used to begin elsewhere but now culture begins on the internet and so I expect a ton of that activity as well and like we welcome all kinds of activity like you know the internet is not just for uh sending emails or doing uh video calls or or like doing banking information and the internet doesn't split up the traffic saying like well this part of the internet is just for banking and this part of the internet is just for playing games. We want to make sure that everything is possible. As new layer ones have come online, we've seen layer 1 teams really make like venture style bets on a specific type of

activity, a specific type of app. Uh like if you guys want, you can go toe-to-toe with Ethereum on borrow and lending inside of a or you know uh AMM swaps inside of Uniswap. I don't know if that's where you guys are going to be the most successful. It's kind of like table stakes to have it, but I don't know if ARC is ever going to beat Ethereum on, you know, Ethereum's slow defi near monopoly. So, what are some of the venture style bets? I think you mentioned agents a bunch of times, but what are what are going to be the activities on ARC that you guys are betting on that bring 1 billion transactions to ARC like soon? So, what are the the new activities that you guys are are betting on? I think like yeah

first I'd say like you know Ethereum is the granddaddy of everybody right like so like we are not here like I I think if all we did was we took activity from Ethereum and moved it to ARC we didn't really grow the market like you know doesn't really help our business because we are the largest uh USDC has a uh the biggest chain for USD USDC is Ethereum and so like one of one of our interest in like getting our out is to make sure that like USDC like gets benefit from mark and if all we're doing is moving you like deployment of USDC from Ethereum to dep to arc like it's not we didn't and we don't grow the market that's not really exciting to us. Um so that's one. Um second I'd say is like yeah I do think like the agentic

activity is going to pick up like agents should become like independent economic actors. Today all the agents are sort of private like I can't share my agent with you very easily like I I share a skills.mmd file. you run it through your agent VM and you're able to sort of like fire up the same agent and even then you're not getting the same guarantees I had. I do think like these agents will become economic actors. They will sort of present themselves on the internet. They will have to prove that they have done a certain amount of activity. The question is like how are you going to come to rely on the proofs that the agents are presenting? I think they have to be cryptographic proofs. So we will be a home for these agents where they can actually record their activity, provide proofs around around the

activity. Uh what agents do in the next 3 or 4 years will be no different than like what websites did like 20 years ago. Like 20 25 years ago websites were HTTP. They were not secure. You could go and like you know you could have all kinds of attacks, man-in-the-middle attacks like and you you wouldn't even know if you're talking to the website that you think you're talking to. Like all of that gets all of that got solved by like new protocol layers like new actors coming and giving certificates to websites and like and making sure that you were actually your browser was truly talking to the website that you were you thought you were talking to. I think agents will have a higher bar. It's not just that you're talking to the agent that you think you're talking to, but the agent actually has the work history

has like has the economic output that they claim that they have actually done. So how are you going to verify all of that? All of that should move to Arc. And if you make um payments really easy, especially for nested agents, if I'm an agent and I have a policy and I want to fire off another thousand agents and I want to give those thousand agents a wallet and a policy and some money and those thousand agents can essentially like transact with each other and not and for the fire of other agents. We keep sort of like reasoning about it reasoning about this in terms of like how nested the activity gets and how connected the activity gets. The only real way to do it is to do it using stable coins and is to make sure that um and to do it in a place where you're

carrying minimal risk when these agents are transacting with each other. That's why payment finality matters, right? That's why subsecond finality matters. That's why credit markets for these agents matter. So all of that traffic is new and novel and like we are going to be using everything in our stack to essentially enable all of that traffic. So it's not just about um it's not just about like hey can your agent get a you know can you get can your agent get a method of payment and can they go transact somewhere on the internet using x42 or some other protocol. It is much more than that. It is like hey what are all the things that agents need so that they can truly become full economic actors and like much like you have a social security number you have a work history you have like an ability to

prove all of that. How does an agent get all of that? that infrastructure doesn't exist and I'm hoping uh this is not just on ARC this is truly distributed on the internet right like we want everybody to be able to access this infrastructure and we want this infrastructure to be in the open that's what that is sort of like a core thesis for us when it comes to like aentic the agentic platform that we're launching on Arc I've been trading crypto for almost a decade and I've used so many different wallets exchanges aggregators different frontends over the years and I'm always kind of looking for the same thing just one interface with deep liquidity across a bunch of chains and assets where I can access all the markets like pers, earn yield, trade confidentially, and still control all my own funds. And I've never really found

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following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most. So, let's do it together. Go subscribe to this podcast. Search the DeFi Report wherever you get your podcast, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you. Now, >> can you tap me and the listeners into >> what the current state of play is in the world of agentic commerce because uh I'm waiting for the world of agentic commerce to kind of come to me. I'm not really pursuing it. I'm not deep in

those weeds, but I do know that agentic commerce is a very big buzzword >> and people love to talk about it. I haven't yet experienced it. So, what gives you and Ark the confidence that there is something there actually real worth pursuing rather than like a bunch of buzzwords that get people excited on podcasts? So, like tap us into what's going on in that neck of the woods. What's real? Okay, let's talk about like agents as actors like essentially and then let's talk about agent e-commerce as well, right? Like so agents as actors, agents are trading um they're trading like people are firing up agents. uh everybody has an idea like a specific idea like specific alpha that like they'd like to go after and they are firing up a pool of agents that are

being used right now to do the trading activity right we see it on chain we see the traffic patterns on chain um agents are doing it what you don't see enough of is like your agent taking your credit card and making a purchase for you that I think is what you mean by like agentic commerce not being there I do think in the last week or two we have seen a bunch of new agents come out that are starting to use like they're essentially uh taking your credit card storing it in a vault using uh like creating one-time o essentially and policy to go and spend that uh spend that money somewhere. Uh that is just I want to say those agents themselves are only a month old. They are not like very well distributed in

the world right now. When those agents become much more distributed like uh you will see like those agents not just transacting using credit card rails but also transacting using stable coin rails and at that point they'd be buying uh they'd be buying things that you use like in the real physical world or the meat world as as we like to call it like they would be using it to buy like you know uh whether it's a plane ticket or whether it is like uh whether it is um something you want to like you know piece of clothing that you're looking looking to I I I don't think the interface for that has existed so far. I don't know if you've kept up to these agents like in the last month, but like I now I have my credit card enabled with an agent and my first agentic purchase

is actually a funny one. Uh my cat needed flea medicine. I went to the I went I went to uh uh the vet. I got the prescription and I had my agent go and buy it from Chewy. And I was like, I don't want to deal with this. Can you please just make sure that this lands at my house? And it did. And so that is an example of agentic commerce commerce transactions that you really don't want to engage with uh yourself. But on the other side on the blockchain side we still have like agents essentially like trading like I mean the agents are like uh agents will be getting credit very soon like they will be taking they will be sort of managing risk very soon like at more scale than they are able to do right now. Do you think um so there's

already commerce on the internet? We have like web two commerce. Y >> how much of aentic commerce will simply consume normal web 2 commerce or is it more that there is net new commerce that will be discovered built built for the first time with aentic commerce or is it a little bit of both? Look, if it's goods and services like you're buying uh like goods is like what we just described is like goods goods commerce, right? like you're going out there trying to buy a widget and you want to make sure that the agent does a good job of buying the widget and like deals with the complexity of it. services commerce is very different like I think services commerce is agents as essentially doing humanlike work and and and sort of

presenting that they can do full end toend humanlike work that I think is totally new and that is either you can argue is like replacement of the like you know human labor or is additive to human labor or sort of fills in the gap where human labor has not been able to fill in the gap because it's just too expensive for a human to do it or the task is not big enough for an a human to go create a company to do like $2 tasks like that like an agent will take on. I think that's the opportunity which is to say like hey I can either go do all of these things myself by using my own agent virtual machine and then building my own agents to do all of that or I can go hire a bunch of agents on the internet who can go do these things for

me. We're not there yet. I think we're closer to the goods goods commerce right now because I I see that as like superbly imminent. Like I think like I I just I just gave you an example of something of commerce that I didn't want to engage with uh that I was able to like you utilize an agent to do that. But like when somebody's able to come in and say like hey look I have an we have an agent marketplace you can we can see listings in there where people are able to say things like can you translate this text for me and then agent will come back and say like yeah I'll do it you can pay me over explorer 2 and it's going to cost you 30 cents. That's an example of something that is I don't think a human setting up that company

today to go translate like you know a paragraph of text and like you know is going through the entire economic negotiation of like hey are you going to pay me and like making sure that like the payment happens and making sure that the work comes out and the work and making sure that the work is of high quality. So those peacemeal work that currently that humans either cannot do or are like not incented to do will get outsourced in my mind from like your private sort of like workspace or your private life onto the public internet and there these agents will become specialists in what they are able to like do whether it's like an agent that can maybe there's an agent that all it does is like figures out like how to

order cat food or like how figures out how to do like you know pet medication or anything like that and and that agent is going to be far superior to anything I can build and so and much like there was this specialization on websites that happened I want to say 20 25 years ago and like it's about like you know in the 2002 tools that it started um I think the same thing will happen with agents I think the current agents are like overly simple uh they are like uh we also currently assume that all agents have access to all data uh none of those things are going to be true in the future right? Like I think there's going to be a desire for people to sort of like preserve their data. There's a desire there's going to be a desire for people to sort of want to isolate their

data and make sure that they're only sharing data uh that is necessary. Uh so and all of those things will lead to like specialized economic actors existing on the internet and like and and then like transactions happening between them with humans and then or like three-way transactions like a lot of times when I get a ping at work I'm not sure like if I'm getting that ping from an agent or I'm getting it from a human. So in this world of agentic commerce and agents with money, agents with private keys, what parts of this stack is Arc and Circle really taking ownership over in terms of like building and innovating and refining versus what other parts are like blockers for you guys that you guys need other parties, other uh you know startups, other tech

companies to build to really complete this whole holistic agentic. What part what part of the agentic stack do you guys touch and then what other parts of the agentic stack are you guys needing to like partner with and collaborate with? >> Yeah, the the part of the agentic stack that we touch is like basically bottom up, right? Like we are not an application level agent. We're not going to build an agent that says like hey here's a I don't want to say never say never but like you know an example that is like really adjacent to us that is that's not something that we're going to be building immediately. is like go figure out like what like stocks to buy to go invest in right like all of these assets that are issued on ARC. uh if you come in and you say like hey this is my

portfolio this is my this is my sort of like investment horizon I am pretty sure there are better agents uh out there than like what cirin can build or like is building uh or plans to build that will get built and so like I'm not interested in going and building that agent what I am interested in building is like all the primitives that are needed to discover that agent all the primitives that are needed to like prove that this agent comes from a good economic actor uh who's not going to steal my data and like is is is going to try to hack me using whether it's like directly or through social engineering or something else. Um right uh and and I will I want to be able to sort of prove to the user that this agent has an excellent work history like they are

like you know they have sort of done this for 10,000 other users and they have had excellent results. All of those primitives we want to build, right? That means that now the agents can live on ARC, they can transact on ARC and as they build history on ARC, they are able to like essentially prove to users that they're good economic actors. Uh and they're able to prove to other agents as well. Like it's not just users who will care about this. If I have an agent and I tell them to go hire another agent, they have good incentives to make sure that that agent that they're hiring is a good agent uh is has all of these like uh properties. So towards that we are building an agent marketplace. We're going we are building an agent reputation system. We are building ways for agents to pay each other very small

amounts of money like almost a millionth of a dollar u using uh circle nanop payments. Uh we're making it so that agents can get credit uh and like make sure that like if you are uh able to prove that you are able to run a book and that is a profitable book like how should you get credit like you know and and when you start up like you have no money. uh how are we supposed to onran as an agent into into the money. So like all of those problems at the at the lower level we will solve or we we're hoping to solve over the next like year or two and the problems on on top of that are like the applications themselves which I think others will build and I don't think those applications are just financial applications this could be any number of

applications travel commerce education like all of these the underpinning for all of these activities is value exchange and that value exchange that needs to happen needs to be trustworthy and that value exchange needs to be final and that value exchange needs to be fast. All of that are can enable. Yeah. >> I want to turn to the world of tokenized stocks because that's also a phenomenon that is happening in the crypto industry right now. Uh are you guys going after trying to compete with things like the NASDAQ or the New York Stock Exchange in the sense that you know those two things are dollar denominated with ARC? We have a dollar denominated blockchain.

Blockchains are asset transaction ledgers. Uh are you guys trying to go and be competitive in the world of liquidity and trading volume for tokenized stocks or are you more passive on that front? We want those applications to use us, right? Like we are not the exchange. We are not the um we are the infrastructure on which you can build an exchange. We are the infrastructure for settlement. Um we um so like I mean I think like that's that's fairly obvious. I think there's no like you know there's no secret there. we're not competing in the exchange market. We want these actors to use our uh to do settlement uh and to enter into um complex like you know financial transa have those financial

transactions be expressed as smart contracts and have those be on ARC. Uh that's our hope and and so like do we want more of these real world asset issuers on ARC? Absolutely. we're going after them and we're like we're trying to solve for problems they may have which whether it is like uh core chain features that they have or whether it's liquidity issues that they are trying to solve for uh maybe it's like USDC on-off ramp issues that they are concerned about maybe sometimes these on-off ramp issues are combined with geographical issues being like hey I have an on-off ramp issue in in the EU or in Japan as I'm trying to do this specific trade how does that work um but like I do think like there will be there There's two versions of this. One is like, hey, I'm doing an activity

already. Can I do it on chain? Because I can then unlock 24/7 activity with all the same actors with no new actors participating because now we have this 24/7 uh infrastructure. And then there is the piece which is well I have like all this new demand that I can bring to uh which I can bring to this asset because I can open up access to this asset all over the board. And USDC has both properties, right? Like you can if you're in the US you have access to bank accounts but if you have USDC you can settle with each other 24/7 but because you have USDC you can now actually give act people people who are in emerging markets people in the EU people in South America access to USDC. I think the same thing will be true for stocks, right?

Like I think in the US people will will probably move on chain because they can like trade faster and have manage their liquidity better, manage risk better and internationally I think we will have like new demand coming in. Um because like people who want to raise money as like AI becomes more uh proliferated around the world there should be more companies in the world. If there are more companies in the world because you can actually hire go hire these economic actors around the world then these companies will have like stronger need for like capital formation and these capital formation like will they will want to issue like you know some sort of token or some stock to essentially do that capital formation. So uh and on the other the on the users on the other side will want to get access to the best

tokens or the best stock around the world to make sure that they're getting the you know the best outcome for the capital that they're investing. So like this this whole world is about to blow up in terms of what access users have and then what access even the companies have in terms of like the investors that they can reach out to. >> What about the world of on-ramps onto ARC? >> Yeah, I think Circle and ARC are is uniquely positioned here in that Circle has some of the best banking relationships if not the best banking relationships in the entire crypto industry domestically inside the United States.

What what about building like kind of like a a firstparty on-ramp system into the ARC blockchain and then also even extending that into non US jurisdictions where we can get like non US dollar stable coins with direct banking relationships right onto ARC because the on on-ramp problem has never truly been solved at a large scale in crypto and really as if you want to distill down what circle is, it's like the best on-ramp ever. Like that is what USDC is is like the best highest biggest conduit between bank dollars and circle dollars.

What about building out like the richest best set of on-ramps? Is that something on your guys' radar? >> Yeah, I mean like from an institutional on-ramp perspective uh we have you're right like we are the best onoff RAMs for the whole ecosystem. I was just looking at something the other day and uh we counted like almost uh um more than $900 billion of like off-ramping that we have done over the span of USDC. So like and that that means that that many people had sort of like USDC that on-ramped into USDC and that's almost a trillion dollars of like USDC that has on onoff ramp over the of this over the life lifespan of USDC. Um so yes we do have good institutional grade on-off

ramps. Uh users currently get access to these on-off ramps using primarily through exchanges. I think uh everybody understands that uh we are working on more retail uh u retail focused on-off ramps. Uh they will be part of like they are part of the arc uh arc launch. uh there's more coming in terms of uh making sure that um uh users in other markets can also get access to these on-off ramps and then from a liquidity perspective like I think if you're getting trying to onoff ramp into on-ramp into a local stable coin the question is like how does that liquidity work and there we have a ton of experience in provisioning liquidity

around the world uh we understand the cost structure of uh of provisioning that liquidity Uh we also we talked a little bit about stable FX which is our ability to sort of swap uh these local currencies into uh USDC or some other stable coin. We're working with market makers who can on the maker side who can like go make these markets. We're also working with takers uh to make sure that like and these takers essentially represent uh represent end users. So these are large financial markets. is I think everybody knows the size of FX markets like it's in the trillions traded every day uh and and the dollar is like pretty dominant in terms of like uh as a quoting asset.

So we're just on day one of like trying to figure all of figure out all of that, right? And a lot of these things are not exchanges. These are private pools that operate uh for like these on-off ramps like uh and so we are connecting into all of these private pools and making sure that these private pools have access to liquidity that is ARC native and then we have like a core protocol on ARC that allows for people to sort of like go and access these liquidity pools. So it's not just about the issuance. It's not just making sure that like you know ARC has finality. It's also like going and finding these liquidity pools and then connecting into those liquidity pools and making sure that those folks also have access to things like Circle Mint which is a product from Circle which allows people

to come in and get access to USDC and get onoff ramps into USDC. So that that's where the full stack argument matters which is to say like yes is it just is is it like another L1 or is it like is is does it have applications on top of it and absolutely it has applications on top of it which is to say the applications are are the stable coins the marketplaces to uh trade those stable coins and the pools of like liquidity that will make it possible for those marketplaces to exist and and the additional circle products that are needed to actually enable those pools of the pools of capital to be successful and like be profitable. All of that needs to fall into place and all of that needs to be compliant and all of that

needs to be like you know be okay with the regulators and all of that. So that's circle's value as it gets into this game right after agentic commerce I feel like for for FX is like the next biggest golden goose that you guys at Circle is really just right next to. Yeah, I don't know if Circle has intent to go into like adjacent economies. I know that there's the euro. Circle already has like a euro product, but really I think the picture gets completed when basically all of the fiat currencies are tokenized in a high fidelity way all in one place. I don't know if Circle is trying to go and do the role of Circle in every single

jurisdiction that has like a well-used fiat currency, but that seems very close to what Circle is already doing and also very valuable. How is Circle and ARC thinking about that? >> I agree. It's very valuable. I think it is it is how uh how things should work. Uh um they don't work like that today. Uh like so here a few things are happening. one is uh Genius goes into effect in January, right? Like so once Genius goes into effect uh we have a regulatory framework that is like over uh which is being uh overseen by the feds. What does that mean for other countries? The other countries are waiting for like the US laws to be final so they can finalize how they will do

stable coin laws in their country. Uh right and so this is true for vast majority of the world. So one once genius happens we expect the regulatory frameworks across the world to evolve uh to support more local stable coins. Second I don't think it is feasible for us to go operate um uh stable coins in like you know over over 190 countries around the world like that's that's the number of countries in the world. Uh we have like stable coins in the two large markets. We have the U USDC and we have uh the EU. Um, and for now we're going to when it comes to issuance like circle issuing the stable coins, I think we're going to stay with that. We're going to

go partner with other stable coins because these these local actors u, they they know the regulators well. They understand local law well. They understand local user needs well. Uh, they have good relationships in the market when it comes to like money traders and they understand like how to how to like make the economics work. Um, we're going to we're going to keep working with them. our our value ad is going to be uh the connecting like these pools of liquidity and making sure that we are we are running like stable FX which is part of arc so that like users can come in and they they can just go query these pools of liquidity for like the best rates that they can get and they can get the liquidity they want. So it is u currently in the market there's

primarily AMM based solutions for like uh for the for these things and you don't get a lot of liquidity over there. So like uh we have AMM based solutions on ARC as well but like an RFQ based system which allows for like this liquidity to be there and to make sure that like the transaction is successful as in like you don't like put up your dollars and not get like the local stable coin or the other way around right making sure that that whole protocol works >> in a permissionless way is what we're trying to focus on. Nikil, so today is launch day. What are you guys focused on in the very short term, so the end of this week, next week as well. What What are your near nearest term priorities that you guys have to get Arc up and running and successful? I mean, look, it

is uh we're going to probably go to the war room and hang out there and make sure that like things are working correctly. Uh it's a little bit of a relief because we've been working on it. I think Circle has wanted to wanted to invest in the space for a long time. We have been working on this L1 project for I think close to 18 months at this point. Um u so I think we might we might take an hour or two to just like have a beer and like take a break uh and then get back to it which is to say that like we want to make sure that like you know we are serving our users like I I'm expecting >> uh users to come in and and and and start transacting on ARC and we want to make sure that like you know

transactions are working uh privacy is working uh stable FX is working like the institutional RWAs have the liquidity they have like that like we've promised a lot in terms of like how much functionality is going going to be available on arc on day one. So just making sure that all of that functionality is immediately available and is working as users expect and it's working not just for us it is working for developers it's working for users over the next three months we have a very rich road map in terms of like new privacy features uh we have like new agent features coming out uh we probably add more validators to the set as like things mature on our side uh and so and then eventually we're planning for our proof ofstake launch as well so we want to make sure that we are ready for that

as well so like those are the things that we're going to be working on. Yeah. >> Quick question. Does Jeremy have any pets? >> Do you know >> as animals? >> Yeah. Like does he have a dog or a cat? >> He's never mentioned it to me. I've known him for 5 years now. So um >> Okay. >> Why do you ask? >> No pets. Okay. Well, cuz usually the name of a founder's pet is a pretty hot uh memecoin target. And so, you know, I know you guys are trying to do >> I'm sure you can >> are doing like a gigantic commerce and all that kind of stuff, but the first thing that's going to happen on ARC is memecoins. And so, if Jeremy's got a pet, I want to know its name, but maybe I'll have to dig around in a in a

different location for that. >> I'm very sure if you can you can tweet at him or like you can DM him and he'll get back and and >> Jeremy is pretty open and Jeremy is pretty active on Twitter. So, like or X, sorry. And and so um and Jeremy loves the internet like I mean like Jeremy's an old internet founder like he's sort of created two internet companies before this. >> So I think like while Jeremy presents well in a suit which I love he's truly at heart like a a person of the internet like you know and so >> I think he's looking forward to all of it is is like my take on it. He's sort of he's >> he is so excited about this. he he has been uh wanting this wanting to work on this for some time and like it has taken

a certain sort of like you know certain path like we went public last year uh so it has taken a somewhat like you know circuitous path to get here but like I think he's very excited to be here and I'm sure like he'll probably reveal the name of his pet himself he might like >> yeah this has been great thanks for coming on the show >> thanks David >> bankation guys know the deal crypto is risky but not risky enough. The institutions have landed, so we're going even further west. This is the frontier. It's not for everyone, but we are glad you're with us on the bank's journey.

Thanks a lot.