Hyperliquid Shifts Stablecoin Strategy Back Toward USDC

Just eight months after winning the rights to issue USDH as the preferred stablecoin on Hyperliquid, Native Markets has sold itself to Coinbase.

What's the Scoop?

• Full Circle: Native Markets – the company which won rights to issue USDH as Hyperliquid's preferred stablecoin just eight months ago – is sunsetting its stablecoin and selling itself to Coinbase. According to a Native Markets X post, Coinbase will become, " the official treasury deployer of USDC as an Aligned Quote Asset." USDH holders can to redeem for USDC during a migration period before the stablecoin is finally phased out. Under the new arrangement, 90% of reserve revenue generated by USDC on Hyperliquid — excluding "costs" — is expected to flow back into the ecosystem, a move projected to boost protocol revenues by roughly 22% to 26%. Circle separately announced that it "is becoming the technical deployer of USDC as an Aligned Quote Asset" and that USDC will become the primary collateral across all Hyperliquid markets. Additionally, Circle plans to stake 500k HYPE tokens as it moves toward validator status on the network.
• Ample Criticism: While Hyperliquid stands to gain a revenue boost from the arrangement, critics argue the deal leaves core concerns around USDC’s “rugability” unresolved. Additionally, before Native Markets’ USDH was selected as Hyperliquid’s preferred stablecoin, multiple issuers were competing for this role on more favorable economic terms. It appears somewhat cloak-and-dagger that a formerly valueless company was able to leverage a favorable HYPE governance decision to sell itself to Coinbase through an opaque transaction just eight months later, a dynamic that carries concerning hallmarks of insider dealings which may have failed to uphold the best interests of retail investors in HYPE (who might have sought better terms and alternative providers had they known the end result of their governance decision) and COIN/CRCL (who have committed to paying a currently unknown amount of money to partake in a suspicious transaction).