USDC Supply Explodes by 200%... HYPE Price Surges 12% on Coinbase-Hyperliquid Partnership

▲ Circle, USDC, Stablecoin, USD/ChatGPT generated image ©

Coinbase, the largest virtual asset exchange in the U.S., has taken a bold step to strengthen its stablecoin dominance by becoming the official USDC treasury distributor for the decentralized exchange Hyperliquid.

According to investment media FXStreet on May 14 (local time), Coinbase announced that it has become the official institution to distribute USDC as an 'Aligned Quoted Asset (AQA)' on the Hyperliquid platform. This decision will concentrate the primary quoted asset within Hyperliquid's 24-hour on-chain capital market to USDC, thereby simplifying transactions, improving price efficiency, and significantly reducing cumbersome stablecoin conversion procedures within the ecosystem. Brian Armstrong, CEO of Coinbase, emphasized on his social media that "USDC is becoming the standard in the virtual asset market," and that this collaboration will accelerate ecosystem growth and the expansion of capital movement.

As part of this partnership, USDH, the existing Hyperliquid-based stablecoin, will be phased out. Native Markets, the developer of USDH, has agreed to grant Coinbase the right to purchase USDH brand assets, and the Hyperliquid exchange will gradually transition to a USDC-centric liquidity system. The existing USDH market will operate normally during the migration period, and users can redeem USDH for USDC or fiat currency without fees via the Native Markets dashboard.

Technological advancements will also accompany this. Coinbase and Circle have pledged to stake HYPE, Hyperliquid's native token, to support the activation of the upgraded AQAv2 model. Notably, Coinbase, acting as the treasury distributor, plans to share the majority of the revenue generated from USDC deposits with Hyperliquid. This revenue-sharing structure is expected to be utilized as a financial resource for overall network development, including increasing protocol revenue, HYPE buybacks, and ecosystem grants.

The growth of USDC within Hyperliquid is already unparalleled. Over the past year, the USDC supply on the platform reached approximately $5 billion, showing an astonishing growth rate of 200% year-over-year. The Hyper Foundation is accelerating the transition to a USDC-based order book, including providing separate grants to developers integrating existing USDH products, to smoothly support this migration.

In conclusion, the honeymoon relationship between Coinbase and Hyperliquid is expected to set a precedent for how stablecoin liquidity directly translates into protocol revenue and network growth. Immediately after this announcement, the HYPE price surged by 12% in 24 hours, reaching the $44 mark, drawing immediate market applause. Experts predict that Coinbase's involvement will elevate Hyperliquid beyond a simple DEX to an institutional-grade on-chain financial infrastructure.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*