coindesk.com
Hyperliquid's new deal with Coinbase (COIN) and Circle (CRCL) is shifting stablecoin profits away from issuers and toward crypto trading platforms, a move analysts said could create sustained buying pressure for the $HYPE token while squeezing margins at Circle.
The agreement, announced last Thursday, makes Circle's $USDC stablecoin the official "Aligned Quote Asset" (AQA) on Hyperliquid, the fast-growing perpetual futures exchange. Coinbase will become the treasury deployer for most $USDC on the network, while Circle handles minting, redemptions and cross-chain infrastructure.
While the exact details of the revenue share were not revealed, the AQA frame means that Hyperliquid will receive most — as much as 90% — of the reserve income generated by $USDC deposits on the platform — revenue that historically flowed mainly to stablecoin Circle and Coinbase.
"The more I think about this Coinbase partnership, the more I believe it is Hyperliquid’s biggest announcement all year," Syncracy Capital co-founder Ryan Watkins wrote on X.
Watkins argued the deal fundamentally changes Hyperliquid’s business model because the protocol now captures both trading fees and stablecoin yield.
"Yield sharing enables Hyperliquid’s revenue to scale more directly with deposits, rather than just trading volume," Watkins said. Because deposits tend to remain steadier during downturns than trading activity, the structure could make Hyperliquid’s token buybacks more resilient across market cycles, he added.
With over $5 billion on Hyperliquid currently, the deal could channel between some $135 million and $160 million in revenue for the protocol and buybacks from $USDC yield sharing, Watkins said.
If stablecoin balances on the exchange expand, he estimated the exchange could eventually generate $300 million to $500 million in additional annualized revenue from yield-sharing alone.
That prospect has made $HYPE on of the best-performing cryptocurrencies recently, up nearly 10% over the past week, defying the broader crypto market weakness.
Pressure on Circle, Coinbase
Compass Point analysts Ed Engel and Mike Donovan estimate the arrangement could remove roughly $60 million to $80 million in annual EBITDA from Circle and Coinbase combined because the firms are now sharing far more reserve income with Hyperliquid than under prior agreements.
At current interest rates, Hyperliquid’s roughly $5.1 billion $USDC supply generates about $180 million in annual gross profit for Coinbase and Circle combined, the analysts estimated.
The broader concern is that other DeFi protocols may now demand similar terms.
"We also see risk that other DeFi protocols demand yield sharing arrangements," Engel and Donovan wrote, pointing to platforms such as Polymarket and Jupiter.
Stablecoin consolidation
The agreement also formalized a strategy Hyperliquid began last year with its "Aligned Quote Asset" framework, which pushed stablecoin issuers to share reserve income with the protocol in exchange for preferred treatment.
Fast forwarding to the present, Hyperliquid now appears to have pushed incumbents into sharing economics directly instead of building a large standalone stablecoin ecosystem around Native Markets' USDH.
That could foreshadow the consolidation around larger stablecoins that already established distribution and market share, according to Paul Howard, senior director at trading firm Wincent.
"While the market will continue to expand, what we may be seeing today is the beginning of consolidation across the stablecoin landscape," Howard said.
"Fewer stablecoins and fewer conversion layers would streamline capital flows, improve liquidity efficiency, and further strengthen the dominance and growth of major stablecoins," he added.