Why doesn't Hyperliquid simply waive spot handling fees when USDC scales up to Solana? Yesterday we discussed that finding the next HYPE should not only involve copying points, airdrops, and issuing coins, but also depend on whether the user is willing to stay after the reward ends Today, take this issue one step further forward At present, the supply scale of USDC on Hyperliquid L1 is comparable to Solana At the same time, @ ThinkingUSD raised a more direct question: since spot trading is not growing fast enough, why don't Hyperliquid and Unit reduce spot trading fees to zero and become the cheapest place for on chain spot trading? Putting these two things together may be more meaningful than looking at them separately The supply of USDC is equivalent, but it does not mean that the number of users, applications, and activity of the two ecosystems are already equivalent But for Hyperliquid, in addition to supporting transactions, these funds may also provide another source of buying for HYPE through reserve income arrangements User transactions result in transaction fees for the agreement; USDC that complies with relevant arrangements may remain on the platform, and corresponding reserves may also contribute to income According to on chain data, the balance of USDC in the national treasury used for billing on October 14th was approximately $5.849 billion, with an effective annual rate of approximately 3.31%, corresponding to a daily provision of approximately $530100 According to the AQAv2 rule, the relevant returns are accumulated in a 30 day interval and then sent to the Assistance Fund 8 days after the interval ends This means that Hyperliquid's revenue no longer depends solely on how many transactions users make, but also on how long the funds that meet the revenue arrangement can stay here Looking at the same 30 day window again, the differences are more intuitive The reserve income is approximately 15.1 million US dollars, accounting for approximately 18.6% of the agreement revenue; The spot agreement revenue is about 2.1 million US dollars, accounting for about 2.6%. The reserve income is already about 7 times the spot agreement revenue of the same period This does not mean that reserve income can completely replace transaction fees, but it does provide a computable basis for discussion for @ ThinkingUSD's suggestion If spot transaction fees are no longer the only source of income, can the platform reduce transaction fees, attract more users and assets, and then generate income through fund accumulation, perpetual contracts, and other services? The current basic order rate for regular spot accounts is 0.070%, and the pending order rate is 0.040%. The actual cost may also be affected by factors such as transaction level and discounts Is this idea cost-effective? You can first calculate a static account Assuming abandoning the current monthly spot agreement revenue of approximately $2.1 million, the average daily shortfall is about $70000 Based on today's effective annual rate of approximately 3.31%, an additional qualifying billing balance of approximately $770 million is required to be replenished through the addition of reserve income This is just a simplified calculation of the protocol layer, without taking into account the benefits of the deployer, other costs, and other business income that may arise from the addition of new users But it makes the problem more specific: after the fee reduction, can an additional $770 million of eligible USDC continue to stay on Hyperliquid? Note that it is an additional amount of funds and an existing reserve income, which cannot be directly used to prove the cost-effectiveness of reducing fees, because without reducing fees, the platform can still obtain these revenues If users only increase their trading frequency for free without bringing more capital accumulation, zero fees themselves will not generate new spot transaction fees. The platform may receive a more attractive trading volume figure, but lose some of the revenue originally used for repurchases On the other hand, if lower fees can attract users who continue to use them, bring deeper inventory, more assets, and longer-term fund retention, then the reduced spot fees may become the cost of acquiring users and funds This is also why I think we can discuss reducing fees, but we cannot directly conclude that 'zero rate is definitely correct' Traders stay by relying on the product, and fees are only a part of the trading cost. Spreads, slippage, trading depth, and capital inflow and outflow costs are equally important Zero transaction fees do not equal zero transaction costs, nor do they automatically bring better liquidity; The cross chain network cost of Unit is not the same as the transaction cost of the order book Therefore, I tend to view fee reduction as a product experiment that needs to be validated. We can start with phased fee reductions in some mainstream spot markets, observe whether users stay, whether funds increase, whether market positions improve, and whether new revenue can cover the costs of giving up The reserve income is not always fixed. If the interest rate decreases or the USDC balance decreases, this income will also shrink Hyperliquid now has an additional option, but has not yet received a check for 'free growth' as a result The USDC's scale equaling Solana is a milestone in the accumulation of funds; The next product issue is whether these funds can help Hyperliquid make transactions cheaper and better To retain spot transaction fees for the current HYPE repurchase? Or should we give up a portion of our income and strive for more users and funds, ultimately forming a greater ability to repurchase? I believe the market will naturally make a choice HYPE Hyperliquid USDC DeFi