Hyperliquid Case Reveals 90/10 USDC Split and 50/50 Profit Model

Woofun AI reports that Circle Internet Group has institutionalized a complex incentive architecture to accelerate USDC distribution, a strategy vividly illustrated by its strategic alignment with Hyperliquid and the underlying financial mechanics shared with Coinbase. This operational model relies on precise economic levers to expand network effects, moving beyond simple liquidity provision to structured partnership frameworks that dictate how stablecoin growth is monetized and distributed across the ecosystem.

The foundation of this distribution strategy rests on a broad and deeply integrated network of commercial agreements. Circle has formalized distribution partnership agreements with more than 150 companies, utilizing targeted economic incentives to stimulate USDC growth, foster product development, and enhance distribution channels. This approach is not a reactive measure to competitive pressures such as the emergence of OUSD, but rather a long-standing operational doctrine. The company's network encompasses thousands of entities, yet the most significant incentives are reserved for those partners who can demonstrably drive volume and adoption. By signing these specific agreements, Circle ensures that its stablecoin remains the preferred settlement layer for a vast array of financial applications, creating a self-reinforcing cycle of usage and liquidity.

Strategic collaboration with large enterprises represents the next tier of this distribution hierarchy. Circle's leadership has explicitly stated the capability to establish high-quality, mutually beneficial partnerships with major corporate players who can significantly expand USDC adoption. Samsung Wallet serves as a prime example of the type of large enterprise that could trigger such tailored collaboration frameworks. When a partner possesses the scale to materially impact USDC growth, Circle and Coinbase are prepared to co-design specific incentive structures. This implies that the interests of the two entities are aligned in expanding the total addressable market before dividing the proceeds. The willingness to engage with global tech giants suggests that the USDC ecosystem is evolving from a crypto-native tool to a mainstream financial infrastructure component, supported by robust corporate alliances.

The financial mechanics governing these collaborations are defined by a strict profit-sharing arrangement between Circle and Coinbase. For USDC held outside their respective primary platforms, the revenue generation process involves deducting third-party ecosystem incentives that have been approved by both parties. The remaining portion, categorized as 'ecosystem economic benefits,' is then split 50/50 between Circle and Coinbase. This structure ensures that neither entity bears the full cost of incentivizing third-party channels; instead, they share both the burden and the reward. This 50/50 split applies to the net benefits after all agreed-upon incentives are paid out, creating a unified front in managing the economic incentives required to maintain and grow the USDC network. It is a mechanism designed to align the incentives of the issuer and the primary exchange, ensuring cooperative expansion rather than competitive fragmentation.

These operational details were brought into sharp focus during Circle's Q2 2026 earnings call, where management addressed critical questions regarding channel incentives and partnership structures. The dialogue involved key executives, including the CEO and CFO, responding to inquiries from analysts such as Ken Suchoski from Autonomous. The discussion centered on how Circle motivates distribution channels, the nature of its collaboration with Coinbase, and the specific profit distribution dynamics within the Hyperliquid platform. The management's responses clarified that the use of economic incentives is a deliberate, long-term strategy rather than a temporary tactical adjustment. The earnings call served as a public disclosure of the general framework, while deliberately withholding the granular details of specific partnership terms, particularly those involving high-profile entities like Hyperliquid.

Woofun AI data shows that the Hyperliquid case provides a concrete data point for understanding this allocation model. As of the end of the quarter, on-chain balances revealed a distinct distribution of assets: approximately 90% of the USDC held by Hyperliquid was located on the Coinbase platform, while about 10% was situated on Circle's platform. The corresponding monetary values were $4.952 billion on Coinbase and $550 million on Circle. This 90/10 split is not arbitrary but reflects the operational requirements of the Hyperliquid trading platform and its integration with the underlying infrastructure. The sheer volume of assets, totaling nearly $5.5 billion, underscores the significance of Hyperliquid as a distribution channel and the importance of the underlying custody and settlement arrangements managed by Coinbase and Circle.

A critical distinction must be made regarding the interpretation of the 90/10 ratio, which is often subject to misconception. The 90% figure cited by analysts in the context of interest income refers to the portion of revenue retained by Hyperliquid, whereas the 90/10 split disclosed by Circle's CFO refers to the physical allocation of USDC funds between Coinbase and Circle's platforms. These two metrics are fundamentally different and should not be conflated. The 90/10 on-chain allocation does not equate to the final profit distribution ratio among the three parties. Circle has not disclosed the specific terms of its partnership with Hyperliquid, nor has it detailed how the remaining 10% of interest income is divided between Circle and Coinbase. The undisclosed business arrangements mean that the exact financial flows remain opaque, even if the asset locations are transparent.

On-chain verification methodologies allow for precise tracking of these asset allocations, providing a window into the operational reality of the partnership. The USDC balance on Coinbase's platform is linked to the Coinbase Treasury Deployer address on HyperEVM, while the balance on Circle's platform is associated with the Circle CoreDepositWallet address on HyperEVM. The AQAv2 system, which manages these balances, actively maintains the ratio between these two addresses at approximately 1:9. System transactions continuously rebalance the funds to ensure that the 90/10 split is preserved, reflecting the operational agreement between the parties. This automated rebalancing mechanism ensures that the on-chain data accurately reflects the intended distribution of assets, providing a reliable source of truth for observers analyzing the partnership's structure.

To calculate the total USDC holdings associated with Hyperliquid, one can apply a straightforward formula based on these on-chain addresses. The total amount is approximately equal to the sum of the Circle CoreDepositWallet balance and the Coinbase Treasury Deployer balance. This calculation confirms that the vast majority of the stablecoin liquidity is anchored on Coinbase's infrastructure, with a smaller but significant portion residing on Circle's platform. The consistency between the on-chain data and the figures disclosed by the CFO reinforces the credibility of the reported allocation. It also highlights the technical sophistication of the AQAv2 system in managing large-scale stablecoin flows while maintaining strict adherence to the agreed-upon distribution ratios.

In conclusion, Circle's strategy of using economic incentives to drive USDC distribution is a long-term mechanism designed to expand the network's reach and utility. The general framework involves partnering with over 150 companies and collaborating with Coinbase to tailor incentives for large enterprises like Hyperliquid. While the on-chain data reveals a 90/10 asset split between Coinbase and Circle, the exact terms of the profit-sharing arrangement remain undisclosed. This opacity is intentional, protecting the competitive advantages of specific partnership deals. The Hyperliquid case demonstrates that while the asset allocation is transparent, the financial intricacies of the collaboration are kept private, marking a sophisticated approach to managing ecosystem growth and revenue distribution.