The ARC token whitepaper, summarized without the price talk

Circle has published an ARC token whitepaper describing the token as the network's "native coordination asset" — governing fee parameters, funding a future shift from proof-of-authority to proof-of-stake, and routing protocol fees through burn and staking-reward mechanics. The document specifies a 10 billion token genesis supply (60% ecosystem, 25% Circle, 15% long-term reserve), an initial annual inflation rate of roughly 2–3% intended to decay toward "inflation neutrality," and explicit legal disclaimer language stating ARC "does not represent any equity, debt, dividend right, revenue share...or other claim on Circle." This guide covers what the document says the token *does* — not what it is worth. The ARC presale completed in May 2026; that is stated here as a dated fact and nothing more.

What ARC is, in the whitepaper's own framing

The whitepaper opens from a structural premise rather than a financial one: "ARC exists because a global economic operating system cannot be coordinated by a single entity." It positions ARC as serving five functions — economic alignment through staking, platform utility (fee discounts and access), fee capture and distribution, governance, and an expanding role as the ecosystem builds new layers on top of Arc. Read plainly, that's a coordination and incentive-alignment token attached to a specific chain's operation, not a description of a tradeable financial instrument — and the document itself insists on that framing explicitly, which is covered further down.

Governance: what starts with Circle, and what's meant to shift

Governance authority in the whitepaper is split, deliberately and explicitly, into what token holders control today versus what Circle retains for now. Token holders are described as voting on economic parameters — fees, inflation, and burn logic specifically. Circle, by contrast, retains protocol-rule and feature decisions, network stewardship and incident response, and control over validator membership, at least at the outset. The document frames this as a starting point rather than a fixed architecture: "Authority expands with readiness. Decisions that start with Circle are expected to shift toward token holder governance." No date or milestone is attached to that expansion — it's stated as a direction, not a schedule.

Staking and the shift from proof-of-authority to proof-of-stake

Arc's validator set today is permissioned proof-of-authority — a fixed, named set of institutions producing blocks (see Built on Arc's guide to Arc's permissioned validator model for what is and isn't published about that set). The ARC whitepaper describes staking as the mechanism meant to layer economic security on top of that identity-based layer over time: token holders stake ARC "retaining custody while allocating economic weight that influences network health and reward distribution," without handing custody to validators. Staking rewards are described as coming from two sources — inflation-funded issuance, and fee revenue that gets converted to ARC at the protocol level before distribution. Validators keep a commission for operating; the remainder passes through proportionally to the stakers backing them. The whitepaper frames the eventual model as a combination of two layers: permissioned validators for identity and accountability, and ARC staking for economic security — staking is what's meant to determine "each validator's weight in proposer selection, reward flow, and what they stand to lose from underperformance." Note the tense throughout: this is described as the intended design for a transition, not a live mechanic — Arc's validator set remains proof-of-authority as of 2 Sep 2026, per Circle's own documentation.

Supply mechanics, as described

The whitepaper states a genesis supply of 10 billion ARC, split three ways: 60% to an ecosystem allocation (covering token sales, developer grants and growth programs), 25% to Circle (for protocol development, staking, governance and ecosystem administration), and 15% to a long-term reserve. The document explicitly declines to give exact unlock and release schedules, stating only that "exact unlock and release schedules will be announced in the coming months" as of the document's writing.

On issuance, the whitepaper describes a decaying-inflation model meant to bootstrap early validator security: an initial annual issuance rate "expected to begin at approximately 2–3%," distributed to validators and stakers as compensation, with a programmatic decline over time. The long-run target is what the document calls "inflation neutrality" — a state where fee-driven burn fully offsets new issuance — but it's explicit that this isn't a scheduled outcome: "This transition is not guaranteed by a fixed timeline. It depends on the pace of real network growth."

Fee routing and burn

Every protocol fee on Arc — regardless of what asset it was paid in, including USDC — is described as being converted to ARC at the protocol level before distribution. That converted ARC then splits between two destinations: compensation for validators and stakers, and a permanent burn. The whitepaper lists base transaction fees, priority fees, and anticipated MEV-auction revenue from sealed-bid block-construction auctions as the fee categories feeding this mechanism. The practical effect described is that ARC's supply dynamics are tied to two opposing forces — issuance funding early security, and usage-driven burn reducing supply — with the balance between them explicitly left to depend on how much real activity the network generates, not fixed in advance.

The long-term reserve

The 15% long-term reserve allocation is described in general-purpose terms: a buffer "for long-term resilience, strategic flexibility, and economic stabilization," available to be deployed to "address market dislocations, fund critical infrastructure, or support the network's stability." The whitepaper does not detail a separate governance process for how or when that reserve gets deployed, beyond describing its existence and purpose.

What the document explicitly disclaims

Circle attaches direct, unambiguous legal disclaimer language to the whitepaper, and it's worth quoting rather than paraphrasing, since it defines what the token is not: "ARC does not represent any equity, debt, dividend right, revenue share, liquidation right, ownership interest, or other claim on Circle or any other person." The document also states that "the economic benefits associated with holding or staking ARC arise solely from the participant's interaction with the Arc network, and are not dependent upon efforts of Circle or any third party," and that it "does not constitute an offer to sell, or the solicitation of an offer to buy, any token." It further notes that "neither Arc network nor ARC has been reviewed or approved by the New York State Department of Financial Services." Built on Arc is not offering a legal opinion on what that language means for ARC's regulatory classification — that determination requires qualified counsel — but the language itself is a direct, sourced part of what Circle has published, and worth reporting plainly rather than summarizing away.

The presale, stated as a dated fact

The ARC presale completed in May 2026. Built on Arc reports that as a dated fact, drawn from Circle's own public materials, and nothing more — this guide does not discuss presale pricing, amounts raised, participation, or any resulting valuation, consistent with Built on Arc's editorial policy against price, value and market-cap framing for any token, including ARC.

Sources: - ARC token whitepaper (PDF) - Arc.io: ARC token whitepaper landing page - Arc documentation: validator model

*Built on Arc is an independent directory. Arc is a Circle product; we are not affiliated with, endorsed by, or operated by Circle.*