How Gas Works on Arc

Every kind of transaction, whether it’s swiping a credit card, sending a wire, or converting currencies, comes with a cost for using the underlying infrastructure. These fees help cover the resources that make payments possible. Blockchains are no different: every action on a network requires a small transaction fee to keep things running. In an onchain setting, those fees are known as “gas.” On many mainstream blockchains, gas fees are quoted in the blockchain’s volatile native asset (e.g., ETH, SOL, etc.) and a transaction’s dollar cost depends on:

• How many gas units your transaction consumes: This is the fixed amount of computational effort your transaction requires, based on the specific operations it performs on the blockchain.
• The protocol’s base fee per unit: This is the network-set price for each unit of gas, which can fluctuate depending on the blockchain’s congestion level at any given time.
• The market price of the native token: This refers to the dollar value of the blockchain’s native gas token on the open market, which fluctuates constantly and directly affects the real-world cost of gas.

Of these factors, the token’s market price is typically the most significant source of uncertainty. Its value can swing sharply between the time a transaction is planned and when it actually goes through — creating at best an accounting headache, and at worst a level of volatility that makes blockchain impractical for many enterprises.

Gas fee volatility can significantly complicate accounting processes and business models, making it hard to set consistent pricing for customers. That’s why finance, payments, and enterprise teams often say: “We need predictable fees we can plan around,” and “Our treasury team can’t hold volatile crypto assets to pay gas fees.”

Arc is purpose-built to remove this blocker.

Arc’s design: USDC as native gas

One of Arc’s most visible and important innovations is that USDC is the network’s native gas token. Every transaction fee is paid in USDC, a dollar-pegged stablecoin, not a speculative asset. Because USDC is designed to maintain stable value, enterprises don’t have to worry about their blockchain operating costs rising and falling with crypto market swings.

As mentioned, users experience fluctuations in gas fees due to changing network conditions and changes in the gas token's market price. Together, these variables can make it nearly impossible to know the exact cost of a transaction in dollars ahead of time.

By eliminating token-price volatility from the equation, Arc makes predictable, dollar-denominated fees possible — reducing accounting complexity and operational friction.

How Arc keeps fees low and steady

Arc doesn’t stop at dollar denomination; it also stabilizes the level of fees. Arc’s fee market is inspired by Ethereum’s EIP-1559 but tuned for predictability:

• Fee smoothing: Instead of adjusting the base fee block-by-block, Arc updates it using an exponentially weighted moving average of block utilization that’s capped within tight bounds. This dampens short-term spikes so fees don’t whipsaw with brief demand bursts.
• Bounded base fee: Guardrails limit how quickly fees can move, further stabilizing costs over time.
• Throughput and finality: Sub-second deterministic finality (powered by the Malachite consensus engine) and high throughput provide abundant block space at high speed, reducing the chances of congestion — another driver of fees on other networks.

The net effect: fees trend low and remain predictable — whether you’re sending $1 or $1B.

Circle Paymaster and multi‑currency support

Future roadmap items include enhancements to Circle Paymaster that allow other regulated stablecoins (e.g., EURC) to be used as gas via paymaster routing (i.e., a user could pay transaction fees using EURC or another asset that’s automatically routed through the built-in stablecoin FX engine and converted into USDC behind the scenes), giving global businesses local currency optionality without breaking fee predictability.

Why business leaders should care

Think of Arc like an enterprise-grade network where gas is just another line item in USD. You wouldn’t accept a card processor whose fees unexpectedly jump 20% based on a speculative token price; and, for many important use cases, we don't think blockchains should work that way either. Arc removes that variable so you can plan, price, and scale with confidence. Here’s how low and predictable gas fees denominated in USDC can benefit your business:

Forecastable unit economics

Finance teams need to set aside extra capital to cover the risk that when they replenish their holdings of native gas tokens, their dollar values may have fluctuated significantly — meaning it could cost multiples of their expected spend to maintain the same level of coverage. Because Arc prices every transaction in USDC and employs a smoothed moving average, the fee you approve in an ops meeting should reflect the fee that hits your ledger, allowing budgets and forecasts to lock on a fixed dollar amount rather than a moving target. You can model per-transaction costs just like any other SaaS or payments rail input.

Cleaner accounting and compliance

The accounting knock‑on effects can be just as significant. Each time an enterprise pays gas in a volatile asset it may record a taxable disposition and could be required to calculate a mark‑to‑market adjustment. Arc’s USDC fees are designed to be treated like a USD operating expense, with no FX translation layer and no capital gains exposure. It also aligns with how finance teams already think about costs (i.e., in dollars), reducing internal friction between product, finance, and treasury.

No forced exposure to volatile assets

Treasury policy can also become simpler. Some corporate treasuries are barred from holding volatile crypto assets, forcing operational teams to work through brokers or swaps every time they need native gas tokens. With Arc, the only asset you need to keep on a balance sheet is USDC, a fiat‑backed stablecoin that’s designed to fit within most cash‑equivalent buckets, reducing policy friction and counterparty risk.

Better customer UX

Predictable gas fees unlock a smoother end‑user experience. Customers no longer have to acquire a separate token, watch price charts, or top up volatile balances before interacting with an application. Developers can even sponsor or abstract the fee entirely, debiting a few cents of USDC in the background so that the “blockchain part” of the in-app payment disappears and the product feels as easy as any web or mobile service.

What this unlocks for builders

Arc is an open, EVM-compatible Layer 1. That means teams can bring existing tooling to a familiar environment, now paired with predictable USDC gas. When every function call lands at a cost you can quote in dollars, gas stops being a market‑risk caveat and becomes a line item you can lock into a sprint budget. That’s a robust foundation for:

• Global payments and payouts: Payroll engines and marketplace escrow can offer reliable per‑transaction costs from Denver to Denmark, enabling flat‑fee pricing that stands up over time.
• Stablecoin FX and programmatic treasury: Automated rebalancing, arbitrage, and sweep operations can run 24/7 without pausing to re‑price gas or let gas volatility erode margins.
• Capital markets workflows: DvP/PvP trades, margin calls, and collateral moves can benefit from the combination of deterministic finality and budgetable fees, so finance teams can match blockchain transactions to their ledger entries in near-real time.

And because Arc integrates natively with the broader Circle platform (e.g., USDC¹, and EURC², USYC³, Mint⁴, CCTP, Gateway, Wallets, and more), businesses can coordinate value flows across both onchain and offchain systems in a single, enterprise-grade framework.

Build with us on Arc

Arc is purpose-built for stablecoin finance. Low, predictable, dollar-denominated fees aren’t a nice-to-have; they’re a prerequisite for enterprise-scale usage of blockchain and stablecoins.

Explore the Arc litepaper, and visit the Arc website to request private testnet access to benchmark your workloads with predictable, dollar‑based gas.