Hyperliquid's USDC Deal Could Redirect Stablecoin Yield Toward HYPE

May 19 — BlockBeats reports that a new USDC arrangement involving Hyperliquid, Coinbase and Circle is poised to reroute stablecoin economics, shifting a larger share of reserve yield away from issuers and toward crypto venues. Analysts say the structure could create sustained buy-side support for Hyperliquid's HYPE token while pressuring profit pools at Circle and Coinbase. Announced last Thursday, the agreement names Circle's USDC as an official "aligned quote asset" on Hyperliquid. Coinbase will act as the primary custodian for most USDC on the network, while Circle remains responsible for minting, redemption and cross-chain infrastructure. Revenue-sharing terms were not formally disclosed. Analysts said the framework implies Hyperliquid could collect the bulk of the reserve yield generated by USDC held on its platform—up to 90%—income that historically flowed mainly to Circle and Coinbase. Ryan Watkins, co-founder of Syncracy Capital, called the Coinbase partnership Hyperliquid's most significant announcement of the year. He argued the deal reshapes Hyperliquid's model by allowing the protocol to capture both trading fees and stablecoin yield, with revenue scaling more directly with deposit balances rather than only with trading volumes. Watkins added that deposits tend to be steadier than trading activity in downturns, which could make token buybacks more durable across market cycles. Hyperliquid currently has more than $5 billion in USDC deposits. Watkins estimates the agreement could translate into roughly $135 million to $160 million in USDC revenue-sharing income for the protocol and token buybacks. If stablecoin balances keep growing, he projects revenue sharing alone could eventually contribute an additional $300 million to $500 million in annualized revenue. The outlook has helped propel HYPE into the ranks of recent top performers, up nearly 10% over the past week, bucking broader weakness across crypto markets. Compass Point analysts Ed Engel and Mike Donovan estimate the arrangement could cut Circle and Coinbase's combined annual EBITDA by about $60 million to $80 million. They calculate that Hyperliquid's current USDC supply of around $5.1 billion could otherwise generate roughly $180 million in annual gross profit for Coinbase and Circle combined. The analysts also warned that other protocols, including Polymarket and Jupiter, may seek similar terms.