Circle Invests in Hyperliquid and Launches Native USDC Integration

TLDR

• Circle invests in Hyperliquid’s HYPE token and launches native USDC on the protocol’s HyperEVM network
• The move follows Hyperliquid selecting Native Markets to issue its own stablecoin USDH after a competitive bidding process
• Circle is considering becoming a validator on Hyperliquid and has integrated its Cross-Chain Transfer Protocol v2
• USDC currently represents nearly $6 billion in reserves on Hyperliquid, making it the dominant stablecoin on the platform
• Hyperliquid processes about $150 billion in monthly trading volume as the largest onchain derivatives platform

Stablecoin issuer Circle has made its first investment in Hyperliquid’s native HYPE token while launching native USDC support on the derivatives trading platform. The move marks a strategic expansion for Circle into one of the largest decentralized finance protocols.

Circle announced on Tuesday that it now directly holds HYPE tokens as a stakeholder in the ecosystem. The company is also considering becoming a validator for the Hyperliquid protocol.

The integration began with USDC rolling out on Hyperliquid’s Ethereum-compatible HyperEVM network. Circle plans to expand support to HyperCore in the coming weeks.

Circle CEO Jeremy Allaire said this launch delivers on roadmap plans announced in July. The company had previously outlined intentions to expand into the Hyperliquid ecosystem.

USDC currently dominates stablecoin usage on Hyperliquid with nearly $6 billion in reserves held by the platform. This makes USDC the primary dollar-backed stablecoin used on the protocol.

Native Markets Wins Stablecoin Competition

Circle’s move comes after Hyperliquid concluded a competitive process to select a partner for its native stablecoin. The protocol announced in September a competition drawing bids from major firms including Paxos, Frax, Sky, Agora, Ethena, OpenEden, BitGo and Native Markets.

Validators ultimately chose Native Markets to issue Hyperliquid’s upcoming native stablecoin called USDH. Native Markets is a startup co-founded by an early Hyperliquid contributor.

USDH will launch through a staged rollout on HyperEVM starting with small-scale testing. The protocol will then open a USDH/USDC spot trading pair.

Hyperliquid confirmed that USDC and other stablecoins will continue operating as quote assets if they meet certain requirements. These include staking 200,000 HYPE tokens worth about $10 million and maintaining robust dollar peg mechanisms.

Cross-Chain Integration and Validator Considerations

Circle has integrated its upgraded Cross-Chain Transfer Protocol version 2 into Hyperliquid. This integration lowers barriers for HyperEVM users to transfer USDC across over a dozen supported networks.

The protocol support enables financial technology companies, on-ramp and off-ramp providers, and other services to integrate with Hyperliquid more easily. Circle has developed comprehensive programs to work with developers on both HIP-3 and HyperEVM.

Circle is evaluating the possibility of becoming a Hyperliquid validator. Validators are HYPE holders who stake tokens to secure the blockchain, validate transactions, and participate in governance decisions.

The top 21 validators by stake amount make up the active validator set responsible for proposing and confirming network blocks. Current top validators include Galaxy Digital, Flowdex, and the Hyper Foundation.

About 430 million HYPE tokens are currently staked across the network. HYPE trades around $53.81 with a market capitalization of $14.6 billion according to current data.

Market Performance and Trading Volume

Hyperliquid has emerged as the largest onchain derivatives platform by trading volume. The protocol processes approximately $150 billion in monthly transaction volumes out of nearly $200 billion total across all onchain platforms.

In July, Hyperliquid reached $330 billion in total trading volume nearly one year after launching its layer-1 network. The platform specializes in decentralized finance derivatives trading.

Circle went public in June through a New York Stock Exchange listing that raised $1.1 billion. The company sold 34 million shares and saw its stock close over 200% higher on the first trading day.

USDC operates on approximately two dozen networks including Ethereum, Solana, Polygon, Arbitrum, and others. There is over $73 billion worth of USDC currently in circulation across all supported networks.

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