Coinbase stuffed USDC into Hyperliquid. Who made the deal

Author:David Christopher

Other Organiser

Tether rules currency, but Coinbase just implanted USDC into Hyperliquid. Fighting for stable money distribution channels is intensifying。

Hyperliquid is currently the most heavily contested position in encryption. Last week, 21 Shares and Bitwise's HYPE spot ETF were listed on the United States Exchange, followed by Grayscale and VanEck。

In the midst of this institutional boom, there is a long-standing competition for interests, in which all parties want to share a piece of the profits of the exchange。

Last fall, Hyperliquid launched a public tender for an original stable currency called USDH, which was designed to reclaim revenues lost to Coinbase and Circle。

AT THAT TIME, USDC, WHICH WAS ABOUT $5.6 BILLION, WAS STORED ON THE TRANS-CHAIN BRIDGE OF THE EXCHANGE, GENERATING INTEREST OF ABOUT $200 MILLION A YEAR, ALL OF WHICH WENT TO ITS CENTRAL COMPETITORS, AND THE PLATFORM FOR REAL DEMAND GENERATION WAS NOT PAID A PENNY。

Eventually, Native Markets won community votes in competitions with companies like Paxos and Ethena, with USDH officially online。

Bankless: USDH bid for Hyperliquid

Last week, however, Native Markets sold USDH to Coinbase, agreeing to phase out the original stable currency and re-establish USDC as the main offer asset on the exchange。

In exchange, 90 per cent of the revenue will flow back to Hyperliquid, although the specific revenue capture mechanism remains unclear. The deal was widely regarded as a victory for Hyperliquid, while Coinbase and Circle were losers. This interpretation is understandable but inaccurate。

Hyperliquid’s benefits from this deal are clear: a significantly higher share of income, about twice as much as during the USDH period; increased fire at the regulatory level through alliances with the most vocal powers in the encryption industry in Washington; and a return to the advantage of the user’s experience of a trusted stable currency。

After all, the exchange was originally built around USDC, and USDC has dominated the HIP-3 market that has won countless headlines for Hyperliquid in the last six months or so。

Coinbase and Circle are seen as an image enhancement and a strategy to align with one of the most encrypted and successful projects in the last cycle。

BUT IF THE REAL MARKET POSITIONING OF THE USDC IS SEEN TOGETHER WITH THE GROWTH TRAJECTORY OF A LASTING CONTRACT, THE SECOND BENEFICIARY EMERGES。

Coinbase and Circle are gaining access to large-scale USDC distribution channels, which is probably the most important part of the whole deal。

My reading: Coinbase and Circle acquired defense against USDT and new growth points, essentially against the quoted assets of currency。

Hyperliquid has received regulatory support and considerable revenue, although the exact amount remains unclear, but certainly higher than before。

HOW'S THE USDC MAIN FIELD

Since the adoption of the GENIUS Act, USDC has shown strong momentum. The regulatory environment created by Circle for the framework was prepared ahead of schedule, with USDC based in the United States and highly focused on compliance. This position has been translated into actual transaction volumes。

Allium data show that USDC transactions reached $355 billion in May 2026, surpassing USDT for the first time in recent months, suggesting that the GENIUS Act was adopted in July of last year, with a clear acceleration of growth。

WHAT HAS NOT CHANGED IS THE OVERALL STRUCTURE. IN APRIL 2025, IMMEDIATELY BEFORE THE GENIUS ACT, USDT HELD 67 PER CENT OF THE STABLE CURRENCY MARKET, WHILE USDC ACCOUNTED FOR 27.6 PER CENT。

ONE YEAR LATER, THE USDT SHARE WAS 67.3 PER CENT AND USDC 28.1 PER CENT. THE VARIATION WAS ONLY HALF A PERCENTAGE POINT. ALTHOUGH THE VOLUME OF USDC TRANSACTIONS IS INCREASING AT AN ACCELERATED RATE, ITS SUPPLY SHARE REMAINS STAGNANT。

The Artemis report last October states that America is the strongest market for USDC. In combination with growth after the GENIUS Act, the US has been the largest growth engine for USDC。

However, this is precisely where new rounds of competition are concentrated. Stripe came in by buying companies like Tempo. The major financial institutions are also introducing a local stabilization currency that meets the GENIUS criteria. USDC's main site is being eroded。

ONCE COMPETITION ON THE MAINLAND OF THE UNITED STATES HAS INTENSIFIED, USDC HAS FEW RESERVES OVERSEAS. IN OTHER REGIONS, USDT DOMINATES AS A DEFAULT DOLLAR, IS WIDELY USED FOR SAVINGS, INVESTMENT AND TRADE, AND IS STILL ACTIVELY EXPANDING。

Over the past year, several new public chains have come online specifically to expand the distribution channels of USDT, and Tether has launched USAT to launch an attack on USDC within the framework of US regulatory compliance with GENIUS。

Coinbase and Circle have the momentum to continue their expansion and face a short window to block distribution positions before full competition escalates. The area of trade, especially the renewal of contracts, is the best breakthrough。

Bankless: Tether introduces USA stabilization currency under US supervision

It's the main arena

As in the case of the stabilization currency, the contract is one of the fastest growing tracks in the encryption field, maintaining a double or even triple growth rate。

THEY ARE STRUCTURALLY TIED TO THE DEPTH OF THE STABLE CURRENCY, WHICH IS PRIMARILY A QUOTED ASSET FOR THE CONSTRUCTION OF A MARKET FOR A LASTING CONTRACT. THE USDT HAS TAKEN ITS MAIN PLACE HERE AS THE LEADING QUOTED ASSET IN MOST MARKETS ON THE WORLD'S LARGEST PERMANENT CONTRACT EXCHANGE。

ANY PERSON TRADING IN THE LARGEST MARKET FOR MONEY IS USING USDT, WHICH CONSOLIDATES THE SUPPLY OF USDT IN THE EXCHANGE AND PULLS UP ACCESS AND CHAIN ACTIVITIES AROUND IT。

Although Hyperliquid deals far less than the dollar, it is the largest permanent contract exchange in the chain, accounting for 30 per cent of the market share of the chain and controlling 46 per cent of open contracts. This position remains solid even when competitors strike repeatedly。

It is not a central platform, but it does not lose at all. As at 30 April, the volume of transactions was approximately 50 per cent of Bybit, 30 per cent of OKX and 79 per cent of Coinbase International Station. It only adds up to 13% of the coin, but that number keeps moving up。

While still at an early stage, Hyperliquid’s dominance in the realm of chain-resisting contracts and its ability to compete and sometimes outpace the volume of transactions on centralized exchanges gives it global leverage to counterbalance the currency’s presence in non-United States regions。

This opens the way for Coinbase and Circle to compete with Tether, turning Hyperliquid into a structured distribution channel for USDC。

Coinbase knows his way

However, this raises the question: Why not establish this distribution channel directly by expanding the product of a permanent contract with the family

Because Coinbase is subject to a regulatory framework, the number of customers and the market available are limited. Coinbase currently covers about 100 countries, slightly more than half of 180 countries。

Thanks to a more relaxed environment, Hyperliquid can reach more areas and have advantages for both currency and coinbase, which Coinbase cannot replicate。

So, Coinbase and Circle let Hyperliquid take on the task of global expansion, while USDC took a ride。

The deal captured the upper line of space through the growth of USDC supply and the ensuing revenues, while protecting Coinbase from an unwinnable jurisdictional battle. The cake is not big, but it's not enough for them。

Tether is trying the same strategy

Tether is also implementing similar strategies, although on a much smaller scale. After the Drift Hole attack in April, Tether committed up to $147.5 million for recovery。

This transaction sets USDT as a settlement asset for Drift, creates a USDT pool supported by Tether for the designated marketer and finances a transaction incentive layer。

In other words, Tether used the Drift crisis to flip the base currency of the last main sustainable contract of Solana DEX。

Before this deal, USDC was more than twice as stable on Solana as USDT, and that pattern was common throughout the chain. The two sides in the Stabilisation War saw the same thing: the lasting contract is the key battlefield for the Stabilisation Currency。

Overall, in order to take advantage of the momentum created by the GENIUS Act, Coinbase and Circle need broader distribution channels, and Hyperliquid transactions may be key。

IT ALLOWED USDC TO INFILTRATE INTO THE CORE POSITIONS TRADED IN THE CHAIN, TO SET UP THE FASTEST-GROWING TRACK IN THE ENCRYPTION FIELD AND TO HAVE CONDITIONS ON A SCALE OF CONFRONTATION WITH USDT, CURRENCY AND MONEY。

This could also be a bet on the liberalization of domestic regulatory borders. The Chairman of the CTC, Selig, has made it clear that he hopes that the contract will be renewed in the United States, and that the passage of the CLARITY Act may ensure this。

THIS WEEK'S REPORT STATES THAT THE SEC IS PREPARING TO CREATE AN "INNOVATION EXEMPTION" UNDER ITS "ENCRYPTED PROJECT" INITIATIVE, WHICH WOULD ALLOW ENCRYPTED ORIGINAL PLATFORMS TO PROVIDE A CHAIN OF MONETIZATION OF UNITED STATES STOCKS UNDER MORE RELAXED REGISTRATION REQUIREMENTS。

Combine seems to be setting up ahead of schedule to allow Hyperliquid to enter the US market with the USDC already embedded in it。

Bankless: The deal of a lasting contract is a moment of light

All this is just speculation, but it is highly compatible with the way Wall Street and institutional investors see Hyperliquid: They see it as an entry point into the forthcoming new pattern of permanent contracts. It's probably the best thing an asset can do。