Author: Zuo Ye Web3

On May 14, Native Markets announced that it would "sell" $USDH to the CC combination of Circle and Coinbase. After a brief period of operation in August, NM simply took the money and left.

The CC group not only needs to acquire $USDH, but also participate in $HYPE staking and share profits with the Hyperliquid ecosystem.

The Hyperliquid team twice achieved growth by acquiring assets without any investment. The first time, they only granted legitimacy to $USDH, with NM responsible for issuance, reserves, and compliance.

The second time, to attract liquidity with AQA (Standard Quoted Asset), CC took over $5 billion of existing business, and HL became the only DEX revenue sharing channel for $USDC .

Liquidity Game

Returning to the starting point of the $USDH auction, the reason why Native Markets emerged victorious now seems highly questionable.

All of this can only be understood by looking at the Hyperliquid team's thought process; NM is very likely just a tool.

It's quite strange that the quoted assets on Perp DEX are launched in sync with the liquidity and are deeply embedded in the underlying ecosystem.

It's very strange that Hyperliquid suddenly started an auction for $USDH while they were already bridging $USDC with Arb and pushing forward with the native deployment of HyperEVM. If it was really just for $HYPE staking and profit sharing, they could have negotiated with Circle.

In hindsight, especially considering the timeline of July 2025, Circle's agreement to share profits with Bybit may have been the starting point of all this history.

Prior to this, Circle had only had such cooperation agreements with Coinbase and Binance, especially Coinbase, which even took more than half of the profits from the issuance of $USDC.

It's important to understand that Coinbase's liquidity is far inferior to Binance's, making Circle's move essentially signing an " unequal treaty ." In fact, the CC duo did have a cooperation agreement in 2023.

Circle acquired ownership of $USDC, while Coinbase retained only a stake.
Coinbase receives all the interest earned on its own platform's $USDC, plus 50% of the remaining $USDC interest.
The contract is for a term of three years and will be automatically extended upon expiration unless one party proposes to modify the terms.

Understanding this clause reveals Coinbase's immense influence on Circle. In the early days (2019-2020), USDC relied on Coinbase to survive in the shadow of USDT, at the cost of "giving up part of its soul."

In 2023, Circle was preparing for its IPO. In order to part ways with Coinbase amicably, it had no choice but to resort to this measure. At least it ended Coinbase's exclusivity period, and USDC was finally able to move towards on-chain and payment.

<center>Image caption: USDC profit sharing provider</center><center>Image source: @zuoyeweb3</center>

Image caption: USDC profit sharing

Image source: @zuoyeweb3

At that time, USDT occupied the vast majority of the market share of on-chain transfers and exchange-quoted assets. USDC paid a high price to enter mature markets, such as paying Binance a one-time cooperation fee of $60 million in 2024.

Coinbase couldn't just take the money for nothing, as it lacked liquidity. To prevent Binance from taking USDC away, it facilitated the revenue-sharing agreement between USDC and Bybit.

The second largest offshore firm and the largest compliance firm are still the familiar story of six countries forming alliances to block the World First Institute.

To add to that, Paxos' USDG is also a collaboration with Kraken and OKX, and Ethena's USDe has signed a cooperation agreement with CEX VC.

Given this, Hyperliquid, which excels at active market making, announced the $USDH Ticker bidding in September 2025, cleverly using market pressure to force Circle and Coinbase to respond.

Even if NM wins the bid, it will not receive any liquidity support. USDC will still be the dominant asset on HyperCore.

But that's not important. The existence of USDH itself is a source of psychological pressure for the CC portfolio, and this pressure is increasing daily with the emergence of HIP-3.

Hyperliquid uses liquidity as a weapon, which can attract NM (Neutral Monetary) players when it's down and attract CC (Convertible Monetary) combinations when it's up.

Orthodox top-mid-top

After acquiring $USDH on NM, the Hyperliquid team used its "legitimacy" alone to exchange for $100 million in quoted assets and attracted USDe and other cryptocurrencies to stake $HYPE+ liquidity to deploy foreign stablecoins.

This is a game for the faint of heart. Everyone knows that $USDC, as the quoting asset, is crucial for maintaining overall liquidity, but Hyperliquid is betting on the "fragmentation" of liquidity and the attractiveness of CC combination offers.

The terms of the CC combination are undeniably honest. In addition to staking 500,000 $HYPE tokens each on Circle and Coinbase, they also promised to distribute more than 90% of the USDC interest to the Hyperliquid ecosystem. In the NM era, they only repurchased 50% of the $HYPE quota.

This also highlights the importance of Coinbase. Circle itself has no right to decide such a high entry fee, but CC is betting on the scale effect, especially to block the trend of USDT spreading to the blockchain.

On April 16, as part of Drift's self-rescue plan, Tether, the issuer of $USDT, provided it with a $100 million credit line to restore liquidity, on the condition that Drift switch to USDT as its pricing asset.

This is not surprising. Although USDT suppresses USDC in the CEX and payment fields, it has never given up the opportunity to enter the on-chain DeFi field.

Besides the excellent chemistry between Hyperliquid and CC, the NM team is also quite intriguing. Why would they agree to act and cooperate with this performance?

The most likely answer is that their interests are aligned with the $HYPE token, not so much with $USDH, and ultimately, a good show unfolded.

<center>Image caption: August Speedrun $USDH</center><center>Image source: @zuoyeweb3</center>

Image caption: August Speedrun $USDH

Image source: @zuoyeweb3

If you look at the founders' resumes and main business of the NM team, you will make a very interesting discovery: they seem to have little to do with Native Markets, but a lot to do with the various stakeholders surrounding $HYPE.

Although MC Lader is the CEO, Max Fiege is more often regarded as the core figure. The reason is not complicated. He not only worked on the stablecoin Liquity, but also had close ties with Hyperion, the company behind $HYPE DAT. Coincidentally, he served as a strategic advisor to Hyperion from June 2025, and only then did he launch Native Markets to auction $USDH.

Another co-founder, Anish Agnihotri, not only has deep ties with Paradigm, an early investor in $HYPE, but he is also one of Paradigm's youngest researchers. You could say he represents VC.

Although the Hyperliquid team did not vote in the $USDH auction, market makers such as CMI Trading expressed their support for the NM team in advance, confirming that NM is indeed an "insider" in the Hyperliquid ecosystem.

Thus, $USDH operated and ended as scheduled. It could even be interpreted that the acquisition of NM was more beneficial to them because Circle would repurchase $HYPE with its share of the profits, which would amount to $150 million in new purchases annually.

Driven by the market itself, the Hyperliquid ecosystem nominated NM to win the bidding. However, it should be noted that the legitimacy of USDH still comes from the official Hyperliquid organization, and the decision-making power for AQA (Standard Quoted Asset) also rests with the official Hyperliquid organization.

The launch of AQAv2 not only marks the end of $USDH's historical mission, but also signifies that the fate of QA (quoted assets) such as $USDe, which have been largely ignored, is sealed, relegated to a supporting role in this game.

USDC will become the only "default quote asset" in the entire Hyperliquid ecosystem. Other quote assets may exist, but they will lack liquidity and legitimacy.

Between the withdrawal and release, the Hyperliquid team received profit sharing and staking, the NM team profited and exited, and the CC combination blocked $USDT, resulting in a world where only self-built pricing assets were injured.

Conclusion

Active market making has always been a core principle of Hyperliquid.

However, the ability to navigate these challenges with ease, going with the flow at each market juncture and achieving maximum results with minimal effort, is something every Founder should learn from frame by frame.

Furthermore, the business world is like a battlefield. If you're not careful, you can end up like USDe, first as a runner-up, then as a tool, and finally as a marginalized person.

Coinbase will launch spot trading for Zama (ZAMA).

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