Author: Grandpa Zuo Web3
On May 14, Native Markets announced that it would "sell" $USDH to the Circle and Coinbase CC combination, leaving after a brief operation in August, NM directly took the money and left.
The CC combination not only aims to acquire $USDH but also wants to participate in $HYPE staking, as well as share profits with the Hyperliquid ecosystem.
The Hyperliquid team has adeptly pulled the wool over twice, first by granting $USDH legitimacy, with NM responsible for issuance, reserves, and compliance.
The second time, for liquidity determination, the AQA (Asset Quotient Asset) attracted, CC came in to take over the $5 billion stock business, HL became the only profit-sharing channel for $USDC DEX.
Liquidity within Liquidity
Returning to the $USDH auction starting point, why did Native Markets achieve victory, which now appears to be full of doubts.
All of this can only be found in the thinking of the Hyperliquid team; NM is likely just a tool.
It is quite strange that the quoted assets of Perp DEX need to be synchronized with liquidity, and it will be deeply embedded in the entire ecosystem's foundation.
The Hyperliquid officials, while already bridging $USDC and promoting the native deployment process of HyperEVM, suddenly carried out the $USDH auction, which is very puzzling; if it was really just for $HYPE staking and profit-sharing, they could have easily negotiated with Circle.
In retrospect, especially at the time node in July 2025, Circle's agreement to share profits with Bybit might be the starting point of all history.
Before this, Circle had only entered into such cooperation agreements with Coinbase and Binance, particularly since Coinbase had even taken more than half of the $USDC issuance profits.
It should be noted that Coinbase's liquidity is far less than Binance's, Circle's move was undoubtedly signing an "unequal treaty"; in fact, in 2023, the CC combination did have a cooperation agreement:
Circle gaining ownership of $USDC, while Coinbase retaining only a portion of the equity;
Coinbase gaining all interest on its platform's $USDC plus 50% of the remaining $USDC interest.
The contract is for a three-year term, automatically extending unless one party proposes to modify the terms.
Understanding this clause reveals Coinbase's significant influence over Circle; in the early days (2019-2020), USDC relied on Coinbase to survive under the shadow of USDT, paying the price of "giving up part of its soul."
In 2023, Circle was preparing for an IPO and had to resort to this move to amicably split with Coinbase; at least it ended Coinbase's exclusivity period, allowing USDC to truly enter the blockchain and payment track.
Image description: USDC profit-sharing party
Image source: @zuoyeweb3
At that time, USDT occupied a significant portion of the on-chain transfer and exchange quoted asset market share; USDC paid a hefty price to enter the mature market, such as a one-time payment of $60 million to Binance in partnership fees in 2024.
Coinbase also couldn't take money for free, lacking liquidity itself, and to prevent USDC from being taken away by Binance, it facilitated the profit-sharing agreement between USDC and Bybit.
The second largest offshore exchange and the largest compliant exchange continues the familiar story of six nations uniting to counter the world's leading exchange.
Just to add, Paxos' USDG also partnered with Kraken and OKX, and Ethena's USDe also signed cooperation agreements with CEX VCs.
Given this, Hyperliquid, expert in proactive market making, announced the $USDH Ticker bidding in September 2025, cleverly leveraging market pressure to prompt responses from Circle and Coinbase.
Even if NM successfully bids, it still did not receive any liquidity support, as USDC still occupies an absolute mainstream position in the HyperCore core quoted assets.
But this is not important; the existence of USDH itself poses spiritual pressure on the CC combination, and with the explosion of HIP-3, this pressure increases daily.
Hyperliquid uses liquidity as a weapon to attract NM into the game and vice versa, using NM to attract the CC combination into the game.
Legitimacy at Its Peak
After NM won the $USDH, the die was cast, and the Hyperliquid team used "legitimacy" to exchange for $100 million in quoted assets, while attracting external stablecoins to deploy $HYPE+ liquidity staking, like USDe.
This is a game for cowards; everyone knows that $USDC as a quoted asset is crucial for maintaining overall liquidity, but Hyperliquid is betting between "fragmented" liquidity and the attractiveness of the CC combination.
Looking at the conditions set by the CC combination, they cannot be called insincere; besides staking 500,000 $HYPE each for Circle and Coinbase, they also promised to allocate over 90% of the USDC interest to the Hyperliquid ecosystem, while NM only had a 50% buyback quota for $HYPE.
This also reflects Coinbase's importance; Circle itself does not have the authority to decide such a high threshold fee, but CC is betting on scale effects, especially countering USDT's trend of spreading onto the blockchain.
On April 16, in Drift's self-rescue plan, the issuer of $USDT, Tether, provided a $100 million credit line to restore liquidity, but the condition was that Drift shift to USDT as a quoted asset.
This is not surprising; although USDT suppresses USDC in CEX and payment fields, it has never given up the chance to march into on-chain DeFi.
In the tacit understanding between Hyperliquid and the CC combination, the NM team's role is also intriguing; why would they be willing to act as actors, cooperating in this performance?
The most likely answer is that their interests are aligned with the $HYPE token and are not as tightly bound to $USDH, ultimately putting on a great show.
Image description: August expedited $USDH
Image source: @zuoyeweb3
Observing the founding team's resumes and main businesses of NM, you will find a very magical discovery; they seem to have little connection with Native Markets, but have strong ties with the various stakeholders surrounding $HYPE.
Although MC Lader is the CEO, Max Fiege is more often seen as the core figure; the reason is straightforward: he has not only genuinely worked on stablecoin Liquity but also has close relations with the $HYPE DAT company Hyperion. Interestingly, he started serving as a strategic advisor to Hyperion from June 2025 and then initiated Native Markets to auction $USDH.
Looking at another co-founder, Anish Agnihotri, not only does he have deep ties with the early investors of $HYPE, Paradigm, but he is also one of Paradigm's youngest researchers, which can be understood as a representative of VC.
Although the Hyperliquid team did not vote in the $USDH auction, market makers such as CMI Trading expressed support for the NM team in advance, confirming that NM is indeed "insiders" of the Hyperliquid ecosystem.
Thus, $USDH ran as planned and ended as planned, and it can even be understood that NM being acquired benefited them more because Circle’s profit-sharing buyback of $HYPE translates to an additional annual volume of $150 million.
Driven by the market, the Hyperliquid ecosystem nominated NM to win the bidding race, but it should be noted that the legitimacy of USDH still comes from Hyperliquid officials, and the authority to decide on the AQA (Asset Quotient Asset) also lies with Hyperliquid officials.
AQAv2 was thus born, marking not only the end of $USDH's historical mission but also the fate of other QA (quoted assets) like $USDe, which has already been doomed to become a supporting role in this round of the game.
USDC will become the only "default quoted asset" in the entire Hyperliquid ecosystem; other quoted assets may exist but lack liquidity and legitimacy.
In this give and take, the Hyperliquid team gained profit-sharing and staking, the NM team profited from exiting, and the CC combination aimed to counter USDT, leading to a world where only self-built quoted assets suffered.
Conclusion
Proactive market making has always been Hyperliquid's core character.
But being able to navigate smoothly, leveraging every market node, using minimal energy to achieve maximum effect is a skill each Founder should study frame by frame.
Moreover, the marketplace is like a battlefield; if not careful, one can end up like USDe, first treated as a pacer, later as a tool, and ultimately becoming an outsider.
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