Hyperliquid Taps Coinbase, Circle to Rework Revenue Model, Bolster HYPE Buybacks

Hyperliquid is reworking its stablecoin revenue model around its trading platform through new partnerships with Coinbase and Circle.

CoinDesk reported on May 18 that Hyperliquid last week designated Circle's USDC as the official reference stablecoin on its platform, known as the Aligned Quote Asset, or AQA. Under the arrangement, Coinbase will manage most USDC reserves on Hyperliquid, while Circle will oversee issuance, redemption and cross-chain infrastructure.

Market participants say the deal's core significance lies in how stablecoin reserve income will be split. Interest income from USDC deposits had largely gone to Circle and Coinbase. Now, as much as 90% could go to Hyperliquid.

"This Coinbase partnership may be Hyperliquid's biggest announcement of the year," Ryan Watkins, co-founder of Syncracy Capital, told CoinDesk. Hyperliquid now stands to collect not only trading fees, but also interest income from stablecoins, he said.

He added that deposits are typically less volatile than trading volume, which could give HYPE token buybacks a steadier source of funding even in a bear market.

USDC holdings on Hyperliquid currently total about $5 billion. Based on that figure, Watkins said the platform could generate an additional $135 million to $160 million in annual revenue. If deposits keep growing, that could climb to $300 million to $500 million a year. Market participants say those expectations have helped fuel recent strength in the Hyperliquid token. The token has gained about 10% over the past week, outperforming in a weaker market.

The agreement could also weigh on profitability at Circle and Coinbase. Compass Point estimates the deal may cut annual EBITDA at the two companies by about $60 million to $80 million. Investors are also focused on whether other decentralized finance, or DeFi, platforms such as Polymarket and Jupiter seek similar revenue-sharing arrangements.