I spent the past few days in Washington with @hyperliquidpc meeting with policymakers during the historic advancement of the Clarity Act. We discussed Hyperliquid, the benefits that it offers to American consumers, and the regulatory path to bring onchain derivatives markets into the United States.
Some conversations were technical with an impressive baseline understanding of Hyperliquid. Discussions included how onchain trading is a financial innovation that has clear global user demand. Other conversations focused more on a first principles introduction to defi and the promise of onchain markets. It was encouraging to see bipartisan support for thoughtful regulation of crypto. I look forward to continuing discussions in DC and working hard to make American access to Hyperliquid a reality.
Everyone is arguing about $USDH dying. They're missing the point entirely. What happened today is the single most important business move in Hyperliquid's history.
Let me explain. Revenue, liquidity, politics, lobby, and what it means for the USDH vote debate.
Coinbase is now the official treasury deployer of $USDC on Hyperliquid under AQAv2. Circle handles the technical side (CCTP, cross-chain infra). Both are staking hyperliquid:native. Native Markets agreed to sell the USDH brand assets to Coinbase.
$USDH is sunsetting. But the mechanics it pioneered are not. They just got applied to a $4.7B asset instead of a $100M one.
Let's break down why this is a win on every single front.
LIQUIDITY
The biggest complaint from traders and builders for months: fragmentation. $USDH had the alignment but not the liquidity. $USDC had the liquidity but not the alignment. You had to choose.
That choice is gone. One stablecoin. One orderbook per pair. No split liquidity. No confusion for HIP-3 deployers picking a quote asset. No friction for new users bridging in.
$4.7B in USDC on Hyperliquid, 2x year over year. That is the base generating yield now, not $100M.
REVENUE
Under AQAv2, the treasury deployer shares 90% of the reserve yield revenue with the protocol. Run the numbers on the current $USDC supply:
$4.7B at 3.8% interest rate, 90% shared with the Assistance Fund = $160M+ per year flowing directly into HYPE buybacks. That is $440K per day. Every day.
For context, USDH at peak supply was generating a fraction of this on $100M. The AQA model worked. It just needed to be applied at the right scale.
POLITICS AND LOBBYING
This is the angle most people are sleeping on. Coinbase is the largest publicly traded crypto company in the US. They spent over $100M on crypto lobbying and political action in the last cycle. They are the single most powerful voice for crypto regulation in Washington.
The CLARITY Act markup is happening today. Coinbase has been one of its strongest advocates. Having them financially aligned with Hyperliquid, staking HYPE, operating as treasury deployer, is not just a liquidity play. It is a regulatory shield.
Every conversation about "is Hyperliquid a US regulatory risk" just got a lot harder to make when Coinbase is literally staked into the network.
Circle staking 500K HYPE and moving toward becoming a validator. Jeremy Allaire posting "Hyperliquid." That is institutional endorsement at the highest level.
THE USDH QUESTION
"Was USDH a failure?" "Was the vote theater?" "Did Native Markets just flip an asset?"
No. USDH was a weapon. It was a credible threat that proved a protocol can demand yield sharing from stablecoin issuers. Before USDH, Hyperliquid had $5B+ in USDC generating $150-200M/year for Circle and Coinbase. The protocol saw none of it.
USDH launched. The AQA model proved that yield can be redirected onchain, transparently, back to the protocol. It only reached $100M in supply but that was never the point. The point was forcing incumbents to the table.
Basit said it best: the entire lifecycle of USDH from launch to sunset should be studied. Coinbase didn't come to Hyperliquid out of goodwill. They came because USDH proved they would lose the venue if they didn't align.
"But Paxos offered better economics during the vote." Maybe on paper. But 95-100% of a stablecoin that might have also struggled to reach $100M in supply is still less revenue than 90% of $4.7B. The vote was never about picking the best yield split on a small asset. It was about creating the leverage to capture yield on the dominant one.
WHAT THIS MEANS FOR BUILDERS
USDC becomes the canonical quote asset for HIP-4 outcome markets. No more guessing which stablecoin to build around. Hyper Foundation is issuing grants to HIP-3 and HIP-1 deployers who integrated USDH to cover migration costs. Feeless conversions from USDH to USDC during the transition.
For HIP-3 deployers running equity perps, commodity perps, outcome markets: one liquidity pool, one collateral asset, deeper books.
SECOND ORDER EFFECTS
Coinbase operating perps through Hyperliquid via builder codes? Not confirmed, but now structurally possible. Their existing perp product is weak. Hyperliquid's infrastructure is the best in crypto. The incentive alignment is there.
Tether now has a clear path to compete. AQAv2 is an open spec. Any stablecoin issuer can stake 500K HYPE and share yield to become an aligned quote asset. Competition is good.
AQAv2 becomes a blueprint for every other chain. Hyperliquid just proved that a protocol can force the largest stablecoin issuers in crypto to share revenue at the protocol level. No one has done this before.
Hyperliquid.
If you wanted to know what kind of man Jeff is, get this: on January 2024, he declined a $100M funding round at $1B val, choosing to continue to fund Hyperliquid with his personal money in order to keep the protocol pure.
An amazing article by @domcooke:
https://t.co/hv3pj8tw5i
“The rate is charged from undelegated staking balance”
Staked $HYPE % is about to go up simply because anyone wanting order priority needs to stake.
If you don’t understand what that does for $HYPE price I have an old tweet for you
Hyperliquid.
I can think of all the reasons why I should downplay this, but I also can't think of a more significant real world example that validates Bitcoin's use case.
Less thinking about the size of potential BTC flows, and more what it signals moving forward.
Possibly an early sign that Bitcoin is destined to become the neutral settlement layer in a new multipolar world where trust is in short supply.
Maybe it's a watershed moment in history.
How can you not be bullish if team ships this much in just three months?
Literally anyone can buy $HYPE with cash now, and its right after the S&P 500 news.
Im taking advantage of any dip thats given.
Hype is going to flip every top 10 asset outside of $BTC within a year. Mark my words 🫡
It’s kind of insane that the pipe dreams we had as an industry when Synthetix first came out are finally being realized with Hyperliquid and @tradexyz.
$250m+ in OI on oil futures on a weekend.
Crypto delivered on its promises. Thank you @chameleon_jeff and @sershokunin.
It’s kind of insane that the pipe dreams we had as an industry when Synthetix first came out are finally being realized with Hyperliquid and @tradexyz.
$250m+ in OI on oil futures on a weekend.
Crypto delivered on its promises. Thank you @chameleon_jeff and @sershokunin.
ETFs bought 16k+ BTC in 3 days while everyone was panic-scrolling war headlines…
After gold’s record 7 month green streak…
And BTC is just coiling around $70k.
I've seen this setup before…
Price bleeds while retail loses focus and smart money loads the boat.