CoinDesk
Hyperliquid's new arrangement with Coinbase and Circle designates Circle's USDC as the official "Aligned Quote Asset" on the perpetual futures exchange, with Coinbase acting as treasury deployer for most USDC on the network. Under the structure, Hyperliquid captures as much as 90% of the reserve income generated by USDC deposits — yield that historically accrued to Circle and Coinbase. With roughly $5.1 billion in USDC sitting on the platform, Compass Point analysts Ed Engel and Mike Donovan estimate the deal could channel $135 million to $160 million in protocol revenue and buybacks, while removing $60 million to $80 million from Circle and Coinbase's annual EBITDA combined.
Why it matters
The deal restructures where stablecoin economics sit. Perps exchanges have historically monetised trading fees; Hyperliquid is now layering reserve yield on top, with Syncracy Capital's Ryan Watkins arguing the arrangement makes HYPE buybacks more resilient across cycles because deposits hold steadier than volume. At scale, Watkins sees $300 million to $500 million in additional annualized revenue if USDC balances expand. The harder read is contagion: Compass Point flags the risk that Polymarket, Jupiter and other DeFi protocols demand similar terms, eroding the moat Circle and Coinbase built around USDC distribution.
Market impact
HYPE has outperformed the broader market, up nearly 10% over the past week even as Bitcoin gave back May's gains and slipped below $77,000. Circle and Coinbase shares face the structural question of whether reserve income becomes a shared utility rather than a captive margin — a dynamic that Paul Howard at Wincent says may mark the start of stablecoin consolidation around USDC and USDT, with fewer issuers and fewer conversion layers capturing the economics.
Frequently asked questions
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What is Hyperliquid's USDC deal with Coinbase and Circle?
Hyperliquid designated Circle's USDC as its official "Aligned Quote Asset," with Coinbase as treasury deployer. Under the structure, Hyperliquid captures up to 90% of reserve income from USDC deposits on the platform — yield that previously accrued mainly to Circle and Coinbase.
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How much revenue could Hyperliquid earn from the USDC yield share?
Compass Point estimates the deal could channel $135 million to $160 million in protocol revenue and HYPE buybacks. Syncracy Capital's Ryan Watkins projects $300 million to $500 million in additional annualized revenue if USDC balances on the platform continue to grow.
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How much EBITDA could Circle and Coinbase lose from the deal?
Compass Point analysts Ed Engel and Mike Donovan estimate the arrangement removes roughly $60 million to $80 million in annual EBITDA from Circle and Coinbase combined, since they are sharing far more reserve income with Hyperliquid than under prior agreements.
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Could other DeFi protocols demand similar yield-sharing terms?
Yes — Compass Point flagged the risk that platforms such as Polymarket and Jupiter may press for comparable arrangements, which would erode the moat Circle and Coinbase built around USDC distribution and issuer margin economics.
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Why is HYPE outperforming the broader crypto market?
HYPE rose nearly 10% over the past week even as Bitcoin slipped below $77,000 and gave back May's gains. Analysts attribute the outperformance to the structural shift in Hyperliquid's revenue model — stablecoin yield on top of trading fees — which makes future buybacks more cycle-resilient.
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