Hyperliquid's AQAv2 Unleashes $140M+ USDC Yield for HYPE Buybacks

Hyperliquid, a decentralized exchange (DEX), has implemented a new framework called AQAv2, which redirects nearly 90% of the yield generated by USDC reserves back to the protocol for HYPE buybacks. The upgrade builds on a deal with Circle and Coinbase, where USDC became Hyperliquid's primary reserve asset in May.

The first payment from this new arrangement is due on October 3, which could generate between $135 million and $160 million annually, in addition to the existing trading-fee buybacks worth around $771 million. This would make Hyperliquid's buyback engine one of the most aggressive in the market, with a pace that exceeds Ethereum or BNB Chain.

Circle has committed to staking 500,000 HYPE tokens as it works towards becoming a network validator, tying its incentives directly to HYPE's performance. However, analysts have raised concerns about the structural impact on Circle and Coinbase's margins, even as it boosts Hyperliquid's token.