The race for control over crypto value capture is officially on. If you thought the Layer 1 competition was cooling down, think again. The latest entrants are some of the world’s largest fintech and stablecoin companies.
Last week, Stripe announced Tempo, an EVM-compatible blockchain designed for stablecoin payments and enterprise applications. Tempo aims to be a chain optimized for cross-border settlement that Stripe fully controls. This follows Stripe’s acquisitions of Bridge (stablecoin infrastructure) and Privy (crypto wallets), signaling its intent to own the full stack from payments to rails to wallets.
Hot on Stripe’s heels, Circle, the issuer of USDC, unveiled Arc, its own EVM-compatible L1 chain. Arc is designed entirely around stablecoins, with USDC as the gas token, optional privacy features, and a built-in foreign exchange engine. Circle’s validator set will be permissioned, further underscoring that this isn’t about decentralization—it’s about efficiency, compliance, and margin capture. Arc is expected to launch on mainnet in 2026, but Circle’s intent is already clear: it no longer wants to be a guest in someone else’s ecosystem. It wants to own the house. This might hurt Solana more than Ethereum, given Solana’s stablecoin base is heavily USDC (roughly 80% USDC / 20% USDT), while Ethereum’s is more USDT-heavy (roughly 37% USDC / 63% USDT).
Earlier this year, Tether and Bitfinex announced Plasma, their own blockchain initiative aimed at building settlement and financial infrastructure. While specifics are still TBD, the positioning echoes the same theme: why rely on external chains when you can control the rules, fees, and transaction flow yourself? For Tether, which already dominates stablecoin issuance, Plasma is a natural extension of its commercial empire—not just issuing the stablecoin, but also operating the underlying system. For Bitfinex, Plasma further solidifies the vertical integration between exchange, token issuance, and infrastructure.
As we’ve said recently, Layer 1 blockchains are nearly impossible to value. With that said, we’ve been explicit that these chains do have value—we just can’t determine how much. But nearly everyone has realized that infrastructure is the most profitable part of crypto. It’s no longer enough to be an application on someone else’s chain—the real appeal lies in owning the chain itself.
It’s worth remembering that none of this is new. Cosmos (ATOM) has been promoting “sovereign blockchains” since 2017, with the Cosmos SDK and Tendermint consensus engine. Their pitch is exactly what Stripe, Circle, and Tether are now chasing—instead of renting block space on Ethereum or other chains, build a blockchain tailored to your application. Cosmos enabled this through modularity, offering plug-and-play components (consensus, governance, staking) while allowing projects to customize fees, tokens, and execution environments.
Some of crypto’s earliest vertically integrated projects came from the Cosmos ecosystem. Binance Chain, dYdX’s new chain, Osmosis, and dozens of appchains were all built using the Cosmos SDK. These projects weren’t meant to be applications fighting for block space; they aimed to be sovereign ecosystems, capturing more value from users, sequencer fees, and governance. Cosmos’ vision was that every company would eventually have its own Layer 1—exactly the shift we’re now seeing with Stripe, Circle, and Coinbase.
In many ways, Cosmos was ahead of its time. The current wave of corporate L1s and appchains validates Cosmos’ thesis: customization and sovereignty are the endgame. The question is whether companies building Tempo, Arc, Plasma, and others can successfully bootstrap usage.
But not everyone is building their own chain. There are notable counterexamples. Coinbase, despite its strong vertical integration ambitions, deliberately built Base as an Ethereum Layer 2 rather than a new Layer 1. They believed aligning with Ethereum’s liquidity, developer ecosystem, and credibility was more important than starting from scratch. Similarly, Robinhood chose to build its new chain on Arbitrum Orbit to accelerate time to market. Both decisions reflect trade-offs—sacrificing some control and theoretical long-term value capture for faster deployment, credibility, and network effects.
That said, it’s worth noting that Coinbase’s goal is still to own the full vertical stack. For example, on Coinbase’s Q2 earnings call, Brian Armstrong explained how Coinbase is integrating decentralized exchanges (e.g., Aerodrome—AERO). Aerodrome will also be the DEX for Coinbase’s goal of tokenizing stocks and other assets. The old model for the Coinbase exchange only generated trading fees when trades occurred. The new model will allow Coinbase to earn three ways: CEX trading fees, sequencer fees from Base (which Coinbase fully owns), and a share of DEX fees (Coinbase Ventures is an investor in AERO).
Of course, the irony is that this cycle looks strikingly similar to Web 2.0. Just as Amazon and Apple built vertically integrated stacks to control distribution, hardware, software, and payments, crypto companies are now racing to build their own sovereign layers. Some will succeed, but most will underestimate the difficulty of bootstrapping real usage outside of their walled gardens.
Whether it’s Stripe with Tempo, Circle with Arc, or Coinbase with Base and Aerodrome, the common thread is clear—everyone wants to move up (or down) the tech stack to maximize profits. But history suggests that network effects are stubborn, and building in isolation is rarely better than building where the users already are. For every Tempo and Arc, there will be dozens of failures. The ultimate winners will be those who strike the right balance between control and ecosystem alignment.
