On May 14, Native Markets announced the sale of USDH to the Circle and Coinbase consortium, marking the conclusion of a brief operational window that began in August. This transaction required the CC group to not only acquire USDH but also integrate into the HYPE collateral scheme, committing to share profits with the Hyperliquid ecosystem. The Hyperliquid team successfully extracted value from two distinct maneuvers: first by granting USDH legitimacy while delegating issuance and compliance to Native Markets, and second by introducing the Standard Quoted Asset (AQA) mechanism to attract liquidity. Consequently, the CC group assumed responsibility for an existing 5 billion business volume, establishing Hyperliquid as the sole DEX channel for USDC-related profit distribution. Data compiled by Woofun AI indicates that the initial USDH auction victory by Native Markets was likely a calculated maneuver rather than a genuine market outcome, serving as a tactical tool within the broader Hyperliquid strategy.

The timing of the USDH auction appears anomalous given that USDC already possessed an Arbitrum bridge and HyperEVM native deployment was underway. If the objective were merely participation in the HYPE collateral scheme, direct negotiation with Circle would have sufficed.

However, the timeline points to July 2025, when Circle agreed to share profits with Bybit, as the catalyst for these events. Prior to this, Circle maintained cooperation agreements exclusively with Coinbase and Binance, with Coinbase capturing over 50% of USDC issuance profits despite possessing significantly lower liquidity than Binance. This arrangement effectively functioned as an unequal treaty. In 2023, as Circle prepared for an IPO, it sought to break Coinbase's monopoly to enable USDC's entry into on-chain transactions and payments, a sector then dominated by USDT. The cost of entering mature markets was steep; in 2024 alone, Circle paid Binance 60 million in cooperation fees. To prevent USDC from migrating entirely to Binance due to liquidity constraints, Coinbase facilitated the profit-sharing agreement between USDC and Bybit.

The dynamic between the second-largest offshore exchange and the largest compliance-oriented exchange mirrors a familiar pattern of jointly blocking dominant players. Similar alliances include Paxos' USDG, developed with Kraken and OKX, and Ethena's USDe partnering with CEX VC. Against this backdrop, Hyperliquid announced a bidding competition for the USDH ticker in September 2025, leveraging market pressure to force a response from Circle and Coinbase. Even after Native Markets won the bid, it received no additional liquidity support, with USDC remaining the dominant core quoted asset on HyperCore. Woofun AI notes that the mere existence of USDH created a psychological burden on the CC group, a pressure that intensified with the launch of HIP-3. Hyperliquid utilized liquidity as a strategic weapon, capable of either attracting Native Markets or using them as leverage to bring the CC group into the fold.

Following the acquisition of USDH, the Hyperliquid team secured 100 million in quoted assets by leveraging the concept of legitimacy and attracted USDe and other assets to the HYPE+ liquidity collateral scheme, thereby stabilizing the currency. This maneuver functioned as a high-stakes gamble where all parties recognized USDC's critical role in maintaining overall liquidity, yet Hyperliquid bet on liquidity fragmentation and preferential terms from the CC group. The terms of the CC group's agreement were transparent: pledging 500,000 units of HYPE each to Circle and Coinbase while promising to share more than 90% of USDC interest profits with the Hyperliquid ecosystem. During the Native Markets era, the repurchase share of HYPE was limited to 50%. This highlights Coinbase's influence, as Circle lacked the power to set such high threshold fees independently. The CC group bet on scale effects to halt the spread of USDT on the blockchain.

On April 16, within Drift's self-rescue plan, Taida, the issuer of USDT, provided a 100 million credit line to restore liquidity, conditioned on Drift switching to USDT as its quoted asset. This underscores USDT's persistent ambition in on-chain DeFi despite its dominance in CEX and payment sectors. Beyond the tacit understanding between Hyperliquid and the CC group, the actions of the Native Markets team warrant scrutiny. Their willingness to play this role likely stems from aligned interests with the HYPE token rather than USDH. An analysis of the Native Markets founders reveals strong ties to HYPE stakeholders; while MC Lader serves as CEO, Max Fiege is the key figure, possessing stablecoin development experience and close connections to the HYPE DAT company Hyperion. Fiege began serving as a strategic advisor for Hyperion in June 2025 prior to initiating the USDH auction. Co-founder Anish Agnihotri has deep roots with early HYPE investors, including Paradigm, representing the VC community. Woofun AI analysis suggests that market makers like CMI Trading expressed support for Native Markets in advance, confirming their status as insiders within the Hyperliquid ecosystem.

The USDH operation concluded as planned, with Native Markets' acquisition proving beneficial due to the additional annual purchase volume of 150 million generated when Circle repurchased HYPE through profit-sharing. Market forces drove the Hyperliquid ecosystem to help Native Markets win the bid, yet the legitimacy of USDH remained anchored in Hyperliquid, which retained the power to decide on AQA. With the introduction of AQAv2, USDH has completed its historical mission. The fate of other quoted assets like USDe is now determined; they will likely serve as supporting characters while USDC becomes the only default quoted asset in the Hyperliquid ecosystem. Other assets may exist but will lack both liquidity and legitimacy. Through this process, Hyperliquid secured profits and shares, Native Markets exited with gains, and the CC group successfully blocked USDT's progress. Active market-making remains Hyperliquid's core strength, but the ability to navigate market stages with minimal effort for maximum results offers a critical lesson for founders. The business world operates like a battlefield where a single misstep can relegate a project from a supporting role to an outsider, a trajectory now evident for assets like USDe.