In one of the most consequential infrastructure shifts in decentralized finance this year, high-performance perpetuals exchange Extended officially migrated its settlement engine from Starknet to Circle’s new Arc blockchain on October 22, 2026. While the move delivers lightning-fast trade settlement and fee payments in digital dollars, it also triggered immediate trade closures for users holding unsupported tokens like Tether, illustrating the growing divide between corporate-backed financial rails and permissionless crypto markets.
By Priya Sharma | October 22, 2026
The Hook: Extended Abandons Starknet for Circle’s Financial Chain
If you have ever traded crypto derivatives, you know that speed and certainty mean everything. In traditional crypto investing, you buy a digital coin like Bitcoin (trading today at 81,225 USD) or Ethereum (holding around 2,380 USD) and hold it in your personal account, waiting for its value to grow. In perpetual futures trading, investors do not hold the underlying physical coins. Instead, they trade flexible agreements that let them speculate on whether prices will rise or fall around the clock, without an expiration date.
Decentralized perpetual exchanges — commonly known as perp DEXs — allow investors to trade these contracts directly from self-custody digital wallets, keeping custody of their funds rather than handing cash over to centralized intermediaries. For months, Extended — the trading platform originally known as X10 and led by former Revolut crypto operations head Ruslan Fakhrutdinov — relied on Starknet, an Ethereum express lane (Layer 2) that bundles thousands of transactions together using mathematical proofs to lower user fees.
However, on October 22, 2026, at 9:00 AM ET (13:00 UTC), Extended officially severed its settlement ties with Starknet and shifted its primary settlement operations to Arc, a dedicated financial blockchain launched by stablecoin issuer Circle on September 16, 2026. For everyday investors, this migration provides a clear window into how decentralized finance is quietly restructuring itself to attract major institutional players — and why keeping track of where your collateral lives is essential to protecting your hard-earned funds.
On-Chain Evidence: Inside the Mechanics of the Arc Settlement Shift
To understand why a major trading platform would pack up and move its entire foundation, it helps to examine what a settlement layer actually does. Think of a settlement network as a digital back office: it is the permanent ledger where trades clear, account balances update, and margin deposits remain locked away while positions stay open.
When Extended operated on Starknet, trades cleared across rollup architecture connected back to the broader Ethereum ecosystem. By moving to Circle’s Arc network, Extended transitions directly onto an institutional Layer 1 blockchain engineered specifically for commercial capital markets. According to platform documentation, this migration brings four critical architectural changes to everyday trading:
- Sub-Second Trade Settlement — Arc provides deterministic sub-second transaction finality, meaning trade executions, margin adjustments, and liquidations finalize nearly instantaneously rather than waiting through variable rollup proof generation cycles.
- Digital Dollar Gas Fees — Instead of requiring retail traders to hold volatile utility tokens like Ethereum or STRK just to pay network tolls (gas fees), all transaction fees on Arc are paid directly in USD Coin (USDC).
- Automated 1:1 Asset Conversions — Because Arc operates as a tailored financial ecosystem, Extended established 1:1 fee-free conversions for collateral, allowing users to swap Ethereum for wETH and Tether (USDT) for native USDC.
- Circle Wrapped Bitcoin (cirBTC) Integration — To replace standard wrapped Bitcoin (wBTC), Extended integrated Circle’s Bitcoin-backed token, cirBTC, ensuring collateral remains backed 1:1 by audited reserves.
To incentivize traders to make the switch smoothly, Extended offered a 0.50% premium credit on all balances converted into Circle-backed assets, deposited directly into accounts within eight hours following the migration launch. For active traders managing high leverage, eliminating native gas token volatility while pocketing a small deposit premium represented an attractive upgrade.
The Core Conflict: Forced Liquidations, Conflicting Deadlines, and Tether Exclusion
Yet behind the technical promises of sub-second settlement lies a sharper reality: the migration created immediate operational headaches and forced liquidations for unprepared retail traders. The primary conflict stems from Circle’s deliberate ecosystem architecture. Unlike permissionless public blockchains that permit any token standard to circulate freely, Arc does not natively support Tether (USDT) — the crypto market’s largest stablecoin — or conventional wrapped Bitcoin (wBTC).
As reported by decentralized finance news outlet The Defiant, Extended instructed traders holding more than 1 USD worth of USDT or wBTC in any trading sub-account to either withdraw those assets to an external wallet or authorize an automated 1:1 conversion prior to the migration launch. For traders who failed to monitor notifications or act before the deadline, the penalty was decisive: Extended automatically closed their open positions at the prevailing mark price.
While Extended waived trading fees on these forced closures and returned residual balances to users’ primary login wallets, forced closures can severely penalize active strategies. In volatile markets, having a trade forcibly unwound robs an investor of the opportunity to let a position recover, locking in temporary paper drawdowns as permanent capital losses.
Making matters worse, reporting from The Defiant highlighted that Extended circulated conflicting deadline notices across its official documentation, social media channels, and community groups. Some graphics indicated cutoff times expiring earlier in the week, creating widespread confusion among international traders racing against the clock to determine whether their open margin accounts were safe from sudden closure.
Market Implications: The Great Layer 2 Settlement Realignment
Extended’s departure from Starknet signals a much larger structural shift taking place across decentralized finance. For years, the prevailing consensus in the crypto space suggested that general-purpose Ethereum Layer 2 networks would capture the overwhelming majority of retail and institutional trading volume. The assumption was simple: low fees and Ethereum security would naturally beat any competing framework.
However, specialized corporate networks like Circle’s Arc — backed by heavyweight institutional validators including Visa and BlackRock — are challenging that assumption. By designing a network around native digital dollars and institutional compliance, Arc is actively enticing high-volume trading venues away from community-driven rollups.
For Starknet, losing a high-profile perpetuals exchange comes at an awkward moment. StarkWare and the Starknet community have spent recent weeks debating a governance proposal to transition Starknet into an independent Layer 1 network focused on long-term quantum resistance. Losing a prominent application venue like Extended highlights the fierce competitive pressure facing Layer 2 protocols as trading platforms prioritize immediate stablecoin liquidity and corporate backing over decentralized ideology.
More broadly, the migration reflects a growing philosophical divide in crypto finance. On one side stands permissionless DeFi, where anyone can trade any asset standard without gatekeepers. On the other side stands institutional DeFi, where regulated stablecoin issuers like Circle construct high-speed, controlled environments that deliberately exclude competing assets like Tether in favor of audited, compliant infrastructure.
The Verdict: What Everyday Traders Must Do Right Now
If you hold funds or maintain active margin positions on Extended, you cannot afford to take a wait-and-see approach. Take these direct actions today to protect your portfolio:
- Inspect Every Sub-Account Immediately — Connect your wallet to the exchange interface and check whether any open positions were forcibly unwound due to unsupported USDT or wBTC collateral. If positions were closed, verify that your remaining capital was properly credited to your primary login account.
- Confirm Your Converted Balances — If you authorized the automated conversion, verify that your assets transferred 1:1 into USDC, cirBTC, or wETH, and confirm that your 0.50% premium credit arrived in your account within the eight-hour window.
- Rebalance Your Collateral Habits — Recognize that trading on institutional networks carries different tradeoffs than trading on permissionless rollups. While paying gas tolls in USDC eliminates the need to buy volatile network tokens, holding Circle-wrapped assets ties your capital closely to regulated custodians.
Decentralized finance is accelerating toward greater speed, deeper liquidity, and institutional integration. But as Extended’s migration to Arc demonstrates, technological upgrades often come with strict operational boundaries. Keeping a close eye on where your collateral settles and understanding network rules remains your best defense in a rapidly evolving market.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
forced closure of USDT positions with basically no grace period is wild. you go to sleep holding perps and wake up closed out because Extended picked Circle
article says gas is payable in digital dollars too, no more ETH for fees. kinda neat, kinda dystopian lol
pretty sure the faq said 72 hours to unwind, but yeah if you were offline you were toast. zero excuse for not auto migrating positions to usdc
72 hours is still a grace period on paper only, notifications went to email inboxes nobody reads on a friday. auto convert to usdc was the obvious fix
waking up to forced closure on your USDT margin because Extended moved settlement to Arc is wild. faster finality means nothing if your collateral gets evicted overnight
^ this. Fakhrutdinov came straight from Revolut, of course he picks the corporate rails over permissionless ones. the surprise would have been him staying
Starknet spent years optimizing proof batching and still lost Extended to a chain that launched five weeks ago. Brutal signal for the entire L2 segment.
L2s did not lose on tech here, they lost on access. Circle can walk into a bank meeting, StarkWare cannot. Arc with USDC settlement is basically a sales pitch to institutions
nailed it. starkware kept pitching zk purity to institutions that just wanted a counterparty they could sue. arc wins because a compliance team can circle a name on a slide
Five weeks versus five years of Cairo dev work, and the deal still went to whoever brought the bank relationships to the table. Tech was never the bottleneck here
and the pitch worked. five weeks of chain uptime beat five years of dev docs no banker ever opened
The settlement speed gain is real. But fees in digital dollars means you are effectively on corporate rails now. Starknet exit says a lot about where DeFi is heading.
fees payable in usdc and settlement run by circle. arc is a bank product wearing a chain costume, and the institutions lining up for it apparently love the fit