Hyperliquid has announced a major update to its stablecoin infrastructure by expanding support for USDC through the AQAv2 upgrade. The move includes Coinbase becoming the treasury deployer for USDC on Hyperliquid, while Circle will manage the technical deployment for cross-chain infrastructure. The update is aimed at improving liquidity, reducing fragmentation, and strengthening stablecoin utility across the network.
Coinbase and Circle Take Key Roles in AQAv2
According to the AQAv2 model, Coinbase is going to be the treasury deployer for USDC in Hyperliquid. The task of Coinbase as treasury deployer will be to facilitate reserve deployment and receive a significant share of reserve yield revenue. Circle, on the other hand, will be responsible for deploying the technical aspects of reserve management, including Cross-Chain Transfer Protocol (CCTP).
This is a big step forward for Hyperliquid, as it seeks to make USDC a leading aligned stablecoin in their network. Both Coinbase and Circle have pledged to stake their HYPE tokens to kick-start the AQAv2 platform. This collaboration clearly indicates an increasing trend among institutional players to get involved in decentralized trading.
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USDC Set to Become Core Quote Asset on Hyperliquid
In addition, as part of the network upgrade, the canonical outcome markets will start quoting USDC. Such a measure is likely to make markets more efficient and provide users with a more consistent trading experience. According to Hyperliquid, one of the key challenges that users and builders face on the platform is the fragmentation of liquidity.
The plan is to consolidate liquidity in USDC to facilitate trading within the network without using different stablecoins. This will also ensure efficient use of capital and better liquidity pools. It is worth noting that this initiative will bring Hyperliquid in line with other standards in the crypto market since USDC is among the popular stablecoins.
USDH Transition and AQAv2 Development
The AQAv2 iteration is founded on the learnings from USDH, which was the first stablecoin ever built to earn yield for a protocol and was implemented entirely via an on-chain process. Hyperliquid admitted that the technological breakthroughs brought about by Native Markets in USDH had played a big role in the creation of the AQAv2 system. While USDH may be phased out eventually, its legacy will remain.
The Native Markets company also reached an agreement on conditions that allow the USDH brand assets to be bought by Coinbase. Hyperliquid stated that, during the migration process, the USDH will continue being fully collateralized, meaning users can exchange their coins into USDC or any other fiat currency without having to pay any fees.
Hyper Foundation Announces Builder Support Grants
The Hyper Foundation will provide grants to builders and deployers associated with the USDH ecosystem to ensure smooth sailing during the migration process. This would include HIP-3 deployers, HIP-1 deployers, and projects that adopted USDH in their products or services. The purpose of these grants is to facilitate the adjustment of infrastructure and further development of Hyperliquid.
The foundation said the initiative is an indication of the company’s dedication to aiding developers who build in this ecosystem. The help will ensure that HYPE continues engaging with developers as it seeks to expedite the adoption of AQAv2. It also indicates the rising competition among blockchain networks to provide stablecoin architecture and settlement systems.
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