Hyperliquid Turns USDC Reserve Yield into HYPE Buybacks and Burns

The Hyperliquid protocol has begun to turn its USDC reserve yield into HYPE buybacks and burns. Starting August 26, Hyperliquid accrued revenue from its USDC reserves through a mechanism called AQAv2. This mechanism assigns two roles to the stablecoin's reserve managers: Coinbase as treasury deployer and Circle as technical deployer for Hyperliquid's USDC reserves.

Each of these staked 500,000 HYPE to back their role. The reserve balances are split in a fixed 9:1 ratio between the two addresses, managed automatically on-chain. Hyperliquid validators approved the mechanism with 69.08% support, above the required 66.67% threshold.

Roughly 90% of the reserve revenue earned is shared with Hyperliquid and sent to its Assistance Fund, which uses it to buy HYPE on the open market and burn every token, permanently removing it from circulation.