Circle’s Arc Blockchain and Native Token Initiative
Circle, the stablecoin issuer behind USDC, is rolling out a native token for its Arc layer-1 blockchain testnet. This enterprise-focused Ethereum Virtual Machine network aims to boost participation and growth. Initially, they considered stablecoin gas fees but shifted to decentralized governance with global validators. Anyway, the Arc testnet launched in October with Goldman Sachs, BlackRock, Visa, and over 100 companies involved, showing rising institutional crypto interest and a move to application-specific blockchains for tailored uses.
Circle’s Q3 2025 results reveal strong growth:
- Revenue hit $740 million, up 66% year-over-year
- Net income reached $214 million, a 202% increase
- Distribution and transaction costs rose 74% to $448 million
- Operating costs increased 70% to $211 million due to workforce expansion
- EBITDA grew 78% to $166 million, indicating financial health
These figures highlight the company’s stability amid blockchain developments.
Appchain Comparisons and Expert Views
Appchains like Arc, Hyperliquid, and Injective tackle scalability and fee issues of general networks. Critics say they fragment liquidity and risk centralization. Andre Cronje, co-founder of Sonic Labs, stated: “Appchains also grossly underestimate the cost of infrastructure and compliance: explorers, custody, exchanges, oracles, bridges, toolkits, integrated development environments, on/off ramps, native issuance and integration, and regulatory compliance.” On that note, Marc Boiron, CEO of Polygon Labs, argued that robust interoperability between blockchain networks is already solving these problems.
Circle’s move fits broader onchain revenue trends, projected at $19.8 billion in 2025. This shift from speculation to user-driven activity is key for market stability. Institutional adoption in areas like tokenized real-world assets, valued over $35 billion by late 2025, supports sustainable growth and traditional finance integration.
Onchain Revenue Growth and Crypto Market Maturation
Onchain revenue, from user-paid fees on blockchains, is set to hit $19.8 billion in 2025 per a 1kx report. This marks a change from speculative actions to real economic activity. Fees cover transactions, trades, swaps, registrations, gaming, and subscriptions. They have grown over tenfold since 2020 at a 60% compound annual growth rate, though not exceeding the 2021 peak of $24.1 billion.
In H1 2025, onchain fees hit a record $9.7 billion, showing fast adoption. The authors see fees as the top indicator of repeatable utility, distinguishing durable networks from experiments. Lasse Clausen, Christopher Heymann, Robert Koschig, Clare He, and Johannes Säuberlich stated: “We view fees paid as the best indicator, reflecting repeatable utility that users and firms are willing to pay for.” This aligns with DeFi, consumer apps, and new sectors where fee growth signals network effects.
Some critics tie fee growth to market hype, but the steady rise over years suggests a structural shift. The 60% CAGR since 2020 beats volatile metrics in other crypto areas, like blockchain gaming with only $293 million in VC funding through Q3 2025. User willingness to pay reduces reliance on speculation.
The onchain fee increase points to crypto becoming a legitimate, revenue-generating asset class. This maturation aids market stability and guides strategies toward proven utility over speculation, as seen in tokenized RWAs and institutional adoption for a resilient ecosystem.
Tokenized Real-World Assets and Institutional Integration
Tokenized real-world assets (RWAs) are gaining momentum, with onchain value excluding stablecoins surging over $35 billion by late 2025 per RWA.xyz data. This more than doubles in a year. Tokenization turns physical or financial assets into digital tokens on blockchains, enabling easier transfer, fractional ownership, and better liquidity. Fees from these assets grow even faster, showing rising user activity.
Major Wall Street firms like JPMorgan, BlackRock, and BNY Mellon invest heavily in asset tokenization. For instance, JPMorgan tokenized a private equity fund on its Kinexys blockchain, and BNY Mellon partnered with Securitize for onchain collateralized loan obligations. The 1kx Report stated: “The total value of tokenized assets onchain has more than doubled over the past year, with fees generated by those assets growing even faster — a sign of increasing user activity and market adoption.” These efforts show traditional finance using blockchain for efficiency and access, with tokenized asset fees adding to onchain revenue.
Views differ on institutional adoption pace; some cite regulatory and tech hurdles, while others point to rapid fee growth as proof of acceleration. The surge in tokenized RWA value and fees suggests barriers are falling, driven by cost savings and new revenues in areas like DePINs.
Tokenized RWAs expand onchain revenue, reflecting blockchain’s push into traditional sectors. This boosts crypto legitimacy and creates synergies with DeFi, leading to stable revenue sources, as in Circle’s Arc blockchain and the institutional shift to utility-driven activities.
Technological Innovations in Blockchain Infrastructure
Tech advances in blockchain infrastructure, like layer-2 solutions, oracle networks, and application-specific chains, improve scalability, efficiency, and security for institutions. Circle’s Arc blockchain, an enterprise-focused EVM network, aims for decentralized governance and better interoperability. Protocols like Threshold Network’s tBTC upgrades ease Bitcoin integration into DeFi with gasless minting and direct support.
Evidence includes zero-knowledge proofs for privacy in platforms like Coins.me, which allows gas-free swaps on Base using Uniswap V3 and sponsored costs. Similarly, Chainlink’s DataLink service, used in FTSE Russell’s partnership for onchain stock indexes, provides reliable data for tokenized assets, handling over $25 trillion in transactions. These innovations address high fees and scalability, seen in onchain revenue growth and appchain adoption.
Traditional blockchains face low speed and centralization risks, but new infrastructures offer fixes; for example, Threshold Network’s 51-of-100 threshold signer model ensures decentralized security for tBTC, cutting counterparty risks. However, critics like Andre Cronje warn of high infrastructure and compliance costs for appchains, while proponents like Marc Boiron say interoperability advances are reducing concerns.
Tech innovations drive market maturation by enabling efficient, secure blockchain deployments. This supports the utility-driven shift, evidenced by the $19.8 billion onchain revenue projection for 2025, and aligns with institutional trends like tokenized RWAs and DeFi strategies for a resilient crypto ecosystem.
Regulatory and Security Implications for Crypto Growth
Regulatory changes and security upgrades are vital for sustaining onchain revenue growth and institutional adoption, as better frameworks and protections build user trust and compliance. Global efforts like the OECD’s Crypto-Asset Reporting Framework set for 2026 standardize data sharing, while rules like Europe’s MiCA offer full oversight, cutting uncertainty for digital assets.
Regulatory clarity spurs adoption; in the UK, the Financial Conduct Authority’s eased rules let BlackRock’s Bitcoin ETP launch on the London Stock Exchange, drawing big institutional capital. Security improvements, like the 37% drop in crypto hack losses in Q3 2025 and the global phishing defense network by major wallets, reduce risks and encourage fee-generating activities. Andrew Duca, founder of Awaken Tax, stated: “HMRC’s growing use of exchange data and international reporting agreements means that investors who haven’t received a letter shouldn’t assume they’re in the clear.” This stresses compliance’s role in trust-building.
Some argue strict rules could hinder innovation and lower onchain activity, but others believe clarity boosts long-term growth. The onchain fee rise amid better regulation and security suggests benefits outweigh costs, as seen in increased tokenized RWA adoption under clearer laws.
Regulatory and security improvements are key to maturation shown by onchain revenue growth. By tackling risks and uncertainties, they enable a stable ecosystem for utility-driven transactions, fitting broader institutional integration and supporting a positive outlook for crypto as a legitimate asset class.
Future Outlook and Strategic Considerations for Crypto Markets
Crypto markets’ future hinges on continued adoption, tech advances, and regulatory alignment, with onchain revenue expected to grow and institutional integration to deepen. Expansion of tokenized RWAs, blockchain infrastructure upgrades, and clearer regulations will drive sustainable growth, as in Circle’s Arc blockchain and the utility-driven shift.
Institutional involvement, like partnerships with Goldman Sachs and BlackRock, will be crucial. Growth in corporate digital asset treasuries, with about $800 billion moved to Bitcoin and crypto stocks, shows a maturing market focused on long-term value. Lasse Clausen, Christopher Heymann, Robert Koschig, Clare He, and Johannes Säuberlich stated: “As protocols mature and regulation improves, the ability to generate and distribute consistent fee revenue will separate durable networks from early-stage experiments.” This highlights utility’s importance for sustained growth.
Optimistic views see onchain revenue speeding up with mass adoption, while cautious outlooks fear economic downturns or regulatory issues slowing progress. The 60% CAGR for onchain fees since 2020 gives a strong base, but external factors like geopolitical events or security breaches could add volatility, as in past corrections.
The crypto market outlook is bullish, backed by structural moves to utility and institutional integration. By focusing on innovation in fee-generating protocols and learning from cross-sector wins, the industry can solidify maturity, leading to predictable, sustainable revenues that help users and investors, fostering a resilient global financial ecosystem.
