On May 14, Native Markets announced a planned sale of the $USDH stablecoin to a consortium comprising Circle and Coinbase, a transaction structured to conclude within August. This brief operational window allowed Native Markets to liquidate its position for cash while the Circle-Coinbase combination secured rights to participate in $HYPE staking and profit-sharing mechanisms within the Hyperliquid ecosystem. The Hyperliquid team orchestrated this sequence through two distinct strategic maneuvers: first, by granting legitimacy solely to $USDH with Native Markets managing issuance, reserves, and compliance; and second, by determining the attractiveness of the standard quote asset (AQA) to liquidity providers, effectively compelling the Circle-Coinbase alliance to assume control of a $5B existing business and establish Hyperliquid as the exclusive decentralized exchange profit-sharing channel for $USDC.

The victory of Native Markets in the initial $USDH auction appears anomalous when viewed through the lens of Hyperliquid's internal strategy, suggesting Native Markets served primarily as a tactical instrument. The necessity of synchronizing the perpetual DEX quote asset with deep ecosystem liquidity structures makes the sudden $USDH auction puzzling, particularly given the concurrent bridging and native deployment of $USDC on HyperEVM. If the objective was merely $HYPE staking and revenue sharing, direct negotiation with Circle would have been more efficient. Data compiled by Woofun AI indicates that the timeline traces back to July 2025, when Circle agreed to share profits with Bybit, a move that likely triggered the subsequent chain of events. Prior to this, Circle maintained similar agreements only with Coinbase and Binance, with Coinbase capturing over 50% of $USDC issuance profits despite possessing significantly lower liquidity than Binance.

This dynamic reflects an unequal treaty signed by Circle, rooted in a 2023 cooperation agreement where Circle obtained ownership of $USDC while Coinbase retained partial equity and all interest from platform-held $USDC plus 50% of remaining interest. This three-year contract, set to auto-renew, underscores Coinbase's historical leverage over Circle, which relied on Coinbase's infrastructure to survive against USDT dominance between 2019 and 2020. Circle's 2023 IPO preparations necessitated ending Coinbase's exclusivity to pursue on-chain and payment tracks, leading to a $60M one-time payment to Binance in 2024 to secure market entry. Coinbase, facing liquidity constraints, facilitated the USDC-Bybit profit-sharing agreement to prevent Binance from monopolizing USDC, echoing a familiar narrative of secondary exchanges uniting against the market leader.

In this context, Hyperliquid's announcement of the $USDH ticker bidding in September 2025 functioned as a calculated pressure tactic to elicit a response from the Circle-Coinbase combination. Even if Native Markets successfully bid, it received no liquidity support, as $USDC remained the absolute mainstream quote asset on HyperCore. Woofun AI notes that the existence of $USDH exerted psychological pressure on the Circle-Coinbase alliance, intensifying with the outbreak of HIP-3. Hyperliquid treated liquidity as a weapon, retreating to attract Native Markets while advancing to draw in the Circle-Coinbase combination, effectively betting between liquidity fragmentation and preferential terms from the stablecoin issuers.

Following Native Markets' successful bid, Hyperliquid utilized "legitimacy" to exchange for $100M in quote assets, attracting external stablecoins for $HYPE staking and liquidity deployment. The Circle-Coinbase conditions were explicit: staking 500,000 $HYPE each and sharing over 90% of $USDC interest with the Hyperliquid ecosystem, a significant increase from the 50% $HYPE quota repurchase during the Native Markets era. This high threshold reflects Coinbase's influence, as Circle lacks unilateral authority to decide such fees. The alliance bets on scale effects to counter the trend of USDT spreading on-chain, a strategy mirrored by Tether's $100M credit line to Drift on April 16, which required switching the quote asset to USDT.

The willingness of the Native Markets team to participate in this performance stems from aligned interests with the $HYPE token rather than $USDH. Key figures like Max Fiege, a former Liquity stablecoin developer and strategic advisor to Hyperion since June 2025, and co-founder Anish Agnihotri, a representative of early $HYPE investors like Paradigm, reveal deep ties to the Hyperliquid ecosystem. Market makers such as CMI Trading confirmed Native Markets as an "insider" before the auction. Consequently, the $USDH operation concluded as scheduled, with Native Markets exiting profitably. Woofun AI analysis suggests that Circle's profit-sharing mechanism translates to an annualized new buying volume of $150M for $HYPE, making the acquisition of Native Markets beneficial for all parties except self-built quote assets.

The emergence of AQAv2 marks the end of $USDH's historical mission and seals the fate of other quote assets like $USDe, relegating them to supporting roles. $USDC becomes the only "default quote asset" in the @HyperliquidX ecosystem, while others lack liquidity and legitimacy. In this strategic ebb and flow, the Hyperliquid team secured profit sharing and staking, Native Markets profited and exited, and the Circle-Coinbase combination countered $USDT. The business landscape remains unforgiving, where entities like USDe risk being marginalized after serving as tools or runners-up in the relentless pursuit of market dominance.