Community Trust ScoreVerified
Hyperliquid struck a deal with Circle and Coinbase. It’s a move that puts real pressure on USDC’s earnings — and the full fallout is still pretty murky.
The three companies have aligned on a partnership that, at its core, creates a strange tension between cooperation and competition. Circle and Coinbase are both deeply tied to USDC’s success. Circle issues the stablecoin. Coinbase earns revenue from it through a long-standing revenue-sharing arrangement. So when Hyperliquid — a fast-growing decentralized exchange — pulls them both into a new collaboration, the natural question is: who actually benefits here, and who’s quietly losing ground? The source didn’t specify exact financial terms, and no dollar figures were attached to the deal. But the competitive shape of it is clear enough to raise serious questions about where USDC’s margins go from here.
The Prisoner’s Dilemma Nobody Wants to Talk About
The deal’s been compared to a prisoner’s dilemma. It’s a decent analogy. In game theory, the classic prisoner’s dilemma describes a situation where two parties acting in their own self-interest end up worse off than if they’d just cooperated cleanly from the start. Here, Circle and Coinbase are basically in that spot. They’re working with Hyperliquid, which gives Hyperliquid new capabilities and market reach. But that same collaboration could chip away at the revenue streams Circle and Coinbase depend on from USDC itself.
It’s not a clean win for anyone.
Hyperliquid gets the bigger platform. Circle and Coinbase get a partner with serious market presence — but they’re also handing that partner tools that could eventually compete with their own USDC-linked business. The balance between those two outcomes is what makes this deal genuinely complicated, and probably why the exact terms haven’t been spelled out publicly.
Stablecoins aren’t a simple product. The economics behind USDC, specifically, are built on yield. Circle takes in dollars, parks them in short-term Treasuries and money market instruments, and keeps the interest. Coinbase gets a cut of that. It’s been a lucrative model, especially as interest rates stayed elevated. Any shift in how USDC circulates — or who controls its distribution and utility — touches that revenue directly. Hyperliquid’s involvement seems to push on exactly that pressure point.
What Hyperliquid’s Position Actually Means for the Market
Hyperliquid isn’t a small player anymore. The decentralized exchange has built a real user base and significant trading volume, and its leverage in any partnership negotiation reflects that. By aligning with Circle and Coinbase, Hyperliquid can deepen USDC’s presence on its platform — that part’s probably good for Circle’s circulation numbers. But Hyperliquid also gains influence over how USDC gets used, and that’s where things get complicated for the other two.
Circle needs USDC everywhere. More platforms, more transactions, more float. So on the surface, a Hyperliquid deal looks attractive. But if Hyperliquid’s growing power means it can negotiate favorable terms — or eventually push toward a competing stablecoin arrangement — Circle’s position weakens even as its supply numbers look healthy. That’s the trap.
Coinbase’s situation is similar. It’s a shareholder in Circle and a distribution partner for USDC. Anything that disrupts the revenue-sharing model is a problem. And Coinbase can’t exactly walk away from a deal that also has real upsides for its own exchange business. So it stays in, navigates the tension, and hopes the math works out.
Hard to know if it will.
The stablecoin market has gotten more crowded and more competitive over the past few years. Tether still dominates by market cap. PayPal launched its own stablecoin. Dozens of smaller projects have tried to carve out niches. In that environment, USDC has stayed relevant partly because of its institutional backing and regulatory cleanliness — but the revenue model behind it isn’t immune to disruption, and deals like this one are exactly the kind of thing that can quietly shift the economics without anyone making a dramatic announcement.
Where This Leaves Circle, Coinbase, and Hyperliquid
Right now, the situation is still unfolding. No one’s said publicly how the revenue splits work, or whether Hyperliquid gets preferential terms on USDC usage. Circle hasn’t laid out how it plans to protect its yield-based earnings. Coinbase hasn’t said much either. The specifics are unclear, and that’s kind of the point — these are the details that will determine whether this deal helps or hurts the parties most exposed to USDC’s profitability.
What’s not unclear is that the competitive pressure is real.
Hyperliquid’s move to bring Circle and Coinbase into its orbit is smart positioning. It gains credibility, liquidity depth, and a stablecoin partner with genuine institutional weight. Whether Circle and Coinbase come out ahead depends on terms nobody’s made public yet.
And that’s probably not an accident. When the economics are this sensitive, you don’t advertise the fine print.
The prisoner’s dilemma framing keeps coming back because it fits. Each party has reasons to cooperate. Each party has reasons to protect itself. And the outcome — for USDC’s revenue model especially — won’t be obvious until the partnership actually plays out in the market.
Circle’s USDC currently ranks as one of the largest stablecoins by circulating supply.
Hub: USDC price, news, and analysis
Frequently Asked Questions
What did Hyperliquid agree to with Circle and Coinbase?
Hyperliquid entered a partnership with Circle and Coinbase to explore new business models, a deal that puts competitive pressure on USDC’s existing revenue streams.
Why is the deal compared to a prisoner’s dilemma?
Because Circle and Coinbase both depend on USDC’s earnings, yet their collaboration with Hyperliquid could undermine those same revenue flows — a classic case of self-interest working against collective outcome.
