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Arc’s architecture is composed of two core components: the Consensus layer and the Execution layer. Together, they provide deterministic finality, stable transaction fees, programmable privacy, and financial primitives purpose-built for stablecoin-native applications.

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Consensus layer

Arc runs on Malachite, a high-performance implementation of the Tendermint Byzantine Fault Tolerant (BFT) protocol. Malachite ensures:
  • Deterministic finality: Blocks finalize in less than one second.
  • Irreversibility: Transactions cannot be reorganized or rolled back once committed.
  • Resilience: Validators commit blocks under a Proof-of-Authority model.
The Consensus layer orders and finalizes transactions securely, providing institutional-grade guarantees for reliability and performance.

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Execution layer

Arc’s Execution layer is built on Reth, a Rust implementation of the Ethereum execution layer. It maintains the blockchain ledger and state, and extends it with components optimized for stablecoin finance:
  • Ledger and State: Stores accounts, balances, smart contracts, and transaction history.
  • Fee Manager: Stabilizes and smooths fees using USDC as the unit of account.
  • Privacy Module: Provides confidential transfers and selective disclosure via view keys.
  • Stablecoin Services: Powers multi-currency payments, FX conversions, and programmatic settlement across supported stablecoins.
By combining these components, the Execution layer provides a familiar EVM-compatible environment with stablecoin-native extensions built in.

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System architecture diagram

The diagram below shows Arc’s architecture at a high level. The Consensus layer determines the order of transactions and finalizes blocks. The Execution layer applies those transactions to the ledger and processes them through its internal modules.

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Developer benefits

By understanding Arc’s system architecture, you can:
  • Trust that your transactions finalize instantly and irreversibly.
  • Build on a familiar EVM-compatible stack (Reth) with stablecoin-native extensions.
  • Leverage built-in financial components like Fee Manager, Privacy, FX, and paying in other stablecoins without needing external workarounds.