Defi-perps shares of Hyperliquid increase by 79%; Launch of Circle's Arc L1; Paxos granted approval by OCC
In the ever-evolving world of cryptocurrency, two significant developments are shaping the future of the industry. Circle, the issuer of USDC, is set to release Arc, a new blockchain Layer-1 compatible with the Ethereum Virtual Machine (EVM), aiming to position Circle to dominate a larger portion of the payment stack. Meanwhile, the U.S. Office of the Comptroller of the Currency has conditionally approved Paxos to operate as a national trust bank, potentially paving the way for more integration between crypto and traditional banking systems.
The payment stack, which includes mint/burn, compliance, settlement, and developer UX, is a crucial aspect of the cryptocurrency ecosystem. Fulfilling these conditions would create one of the most obvious bridges between crypto infrastructure and U.S. banking legislation, marking a significant milestone in the industry's progress towards mainstream adoption. If Paxos meets these conditions, it would be one of the most significant developments in bridging crypto infrastructure and U.S. banking.
On the DeFi front, the growth in Hyperliquid's share is due to a monthly increase of about a third in decentralized perpetual exchange (perps) volume. This upward trend in DeFi volume is a continuation from late 2024, with more flow shifting from centralized venues to decentralized exchanges (DEXs). As of the first half of 2025, Hyperliquid dominated the decentralized perps sector with a significant market share, though the exact comparison to specific competitors like Jupiter, Drift, GMX, and dYdX is not detailed in the available data.
Hyperliliquid recorded a historic volume high in July 2025, reaching approximately $319 billion to $320 billion, marking a 47% month-on-month growth. This performance indicates strong demand for Hyperliquid's services, particularly in perpetual futures. While specific market share predictions for competitors are not provided, the growth of Hyperliquid suggests it is a significant player in the DeFi derivatives market, retaining a top position among decentralized exchanges.
The EVM compatibility of Arc is intended to enable legacy Ethereum-based applications and tooling to migrate rapidly, potentially redirecting activity onto Arc-native applications. If Arc achieves lower latency finality and is more cost-efficient, it could further accelerate this shift. The release of Arc may fast-track USDC velocity, on-chain settlements, and institutional rails, offering a more streamlined and efficient platform for users and businesses.
Circle's Q2 2025 revenue and reserve-income growth was 53% year to year, providing balance-sheet cushioning for the push. With these developments, the future of the cryptocurrency industry seems to be moving towards a more integrated and interconnected ecosystem, bridging the gap between traditional finance and decentralized finance.
- Circle's Arc, a blockchain Layer-1 compatible with the Ethereum Virtual Machine (EVM), aims to create a more integrated ecosystem by enabling the migration of legacy Ethereum-based applications and tooling.
- Arc's potential lower latency finality and cost-efficiency could further accelerate the shift of activity towards Arc-native applications, increasing USDC velocity, on-chain settlements, and institutional rails.
- In the DeFi sector, Hyperliquid's growth in decentralized perpetual exchange (perps) volume indicates a strong demand for its services, particularly in perpetual futures, marking it as a significant player in the DeFi derivatives market.
- The future of the cryptocurrency industry appears to be moving towards a more integrated and interconnected ecosystem, with developments such as Circle's Arc and Paxos' potential integration with U.S. banking, bridging the gap between traditional finance and decentralized finance.
- With Circle's Q2 2025 revenue and reserve-income growth, the company is well-positioned to dominate a larger portion of the payment stack and contend with other crypto alternatives in the finance landscape.
