Hyperliquid Gradually Phasing Out USDH in Favor of USDC
Hyperliquid officially announced the gradual withdrawal of USDH from circulation, recommending users to exchange it for USDC immediately.
With Coinbase becoming the official USDC treasury deployer, the platform is shifting to USDC as its primary stablecoin and collateral, leading to the gradual phase-out of USDH; USDH can still be traded normally and remains fully supported, and users can exchange USDH for USDC or fiat currency for free via the USDH Dashboard on Native Markets.
This move drives liquidity concentration towards USDC, with large institutions and market makers accelerating the purchase of USDC and selling USDH, directing funds to the treasury managed by Coinbase; Native Markets and HIP deployers benefit from a smooth transition, while USDH holders face conversion pressure to avoid future liquidity decline.
Source: Public Information
ABAB AI Insight
Native Markets previously launched USDH as Hyperliquid's native stablecoin through the AQA framework, aiming for deep integration with the HyperCore engine and providing Treasury yield distribution. However, it failed to maintain dominance in the face of USDC's rapid growth on the network (with supply nearing $5 billion), and similar attempts have been adjusted due to competition from external stablecoins.
Coinbase acquired USDH brand assets and activated AQAv2, becoming the USDC treasury deployer, mobilizing reserve resources and collaborating with Circle's technology deployment to concentrate stablecoin liquidity within its ecosystem. This strategically locks in reserve yield sharing from Hyperliquid's trading volume and strengthens economic ties with the protocol.
This path is similar to how Circle and Coinbase previously consolidated USDC's position through CCTP and treasury deployment during multi-chain expansion. Hyperliquid is currently transitioning from a native experimental stablecoin to a mainstream compliant stablecoin, with large centralized participants regaining control over liquidity.
Essentially, this reflects a combination of regulatory changes and capital concentration: compliance pressures and institutional preferences drive platforms to prioritize regulated USDC, while giants like Coinbase achieve pricing power and control over funding paths through treasury deployment, further reconstructing the underlying stablecoin infrastructure for DeFi perpetual trading.
ABAB News · Cognitive Law
Native innovation without a liquidity moat is ultimately swallowed and restructured by compliant giants. The stablecoin battle = a struggle for reserve control, where the winner takes all trading volume and revenue. When decentralized platforms expand, centralized infrastructure often becomes the invisible winner.