Author|Azuma(@azuma_eth)
On August 26th, Hyperliquid's Aligned Quote Assets v2 (AQAv2) mechanism will officially begin accruing earnings.
This means that, in addition to transaction fees, Hyperliquid will gain a new income source related to stablecoin reserve yields, which will ultimately be used for HYPE buybacks.
According to the mechanism design, AQAv2 earnings will be settled in 30-day cycles, and on the 8th day after each cycle ends, they will automatically enter the Assistance Fund (the first batch of earnings is expected to be credited on October 3rd), then fully used for HYPE buybacks —— This means that while AQAv2 will not immediately generate a massive buyback fund today, starting now, related stablecoin reserves on Hyperliquid will officially begin "accumulating water" for HYPE buybacks —— The market currently estimates that AQAv2 could bring in $1.5 billion to $2 billion in new annual buyback funds for Hyperliquid.
For Hyperliquid, which already possesses strong income and buyback capabilities, the value of AQAv2 lies not only in the growth of income scale but more importantly in the expansion of its income structure —— it gives Hyperliquid its first income and buyback source that is weakly correlated with trading activity and can expand with the growth of stablecoin scale.
To summarize in one sentence, AQAv2 is HYPE's second buyback engine.
What exactly is AQAv2?
Simply put, AQAv2 is a "revenue-sharing" mechanism introduced by Hyperliquid for stablecoins.
The core logic of this mechanism is not complicated —— Stablecoin issuers can share reserve earnings with Hyperliquid in exchange for liquidity and distribution channels for their stablecoins within the Hyperliquid ecosystem.
To understand AQAv2, we first need to look back at its predecessor, AQA (or the v1 version).
Previously, Hyperliquid launched the Aligned Quote Assets (AQA) mechanism, allowing qualified stablecoins to become the quoted asset in Hyperliquid's spot and perpetual contract markets, enjoying lower transaction fees, higher market maker rebates, and higher trading volume contributions. However, AQAv1 had a significant limitation: only stablecoins "exclusive" to Hyperliquid could become Aligned Quote Assets. This meant stablecoins like USDC, which are also distributed on Ethereum, Solana, and other ecosystems, did not meet the AQA conditions.
Hyperliquid's initial idea was to offer concessions on the trading side in exchange for stablecoin issuers' deep integration with its own ecosystem. However, after implementing AQAv1, Hyperliquid gradually realized that the "exclusivity" condition limited the protocol's development, preventing it from leveraging the global liquidity and brand recognition already established by mature stablecoins like USDC, and making it difficult for its native stablecoin (USDH) to compete directly with these established giants.
Thus, AQAv2 was created to break these restrictions. According to Hyperliquid's official definition, AQAv2 extends the "Aligned" qualification to stablecoins that are not exclusive to Hyperliquid, on the condition that the stablecoin deployer needs to share approximately 90% of the cost-adjusted reserve earnings generated by the stablecoin circulating on Hyperliquid with Hyperliquid.
If AQAv1 was "You give your stablecoin exclusively to me, I give you trading benefits," AQAv2 becomes "You can continue serving other ecosystems, but if you want deep access to Hyperliquid, you must share reserve earnings with me."
In May this year, to secure a foothold in Hyperliquid's highly promising on-chain distribution channel, Circle and Coinbase announced a cooperation agreement with Hyperliquid, making USDC the official "Aligned" stablecoin on Hyperliquid, with the native stablecoin USDH gradually phasing out.
According to the cooperation terms, Circle, as the technical deployer, is responsible for ensuring the stable operation of stablecoin minting, redemption, and cross-chain transfer infrastructure; Coinbase, as the treasury deployer, is responsible for treasury management and earnings distribution. To ensure long-term commitment and performance capability from the participants, both parties are required to stake 500,000 HYPE each, and a 6-month notice is required for withdrawal. If the treasury address balance is insufficient, resulting in failed earnings deductions, the staked amount will be slashed at a daily interest rate of 2%.
To put this tripartite cooperation simply: Hyperliquid provides users, liquidity, and financial markets; Circle provides the stablecoin product USDC; Coinbase provides reserve asset management services —— Ultimately, the three parties will share the new value created by the expansion of USDC's scale.
This is also the most interesting aspect of AQAv2. Hyperliquid doesn't need to issue USDC itself or manage tens of billions in treasury bonds and cash reserves personally, yet it can use its users and financial infrastructure to participate in sharing the earnings generated by these dollar-denominated assets.
From this perspective, AQAv2 is not merely an update to a stablecoin mechanism; it signifies that Hyperliquid is turning its liquidity and distribution capabilities into a new business model.
How much money can AQAv2 actually bring to HYPE per year?
Understanding the logic of AQAv2, the next natural question is: How powerful is this new buyback engine? The answer primarily depends on two variables —— the scale of stablecoins on Hyperliquid and the actual yield of the reserve assets.
Latest data from Hyper Screener shows that the total stablecoin circulation on Hyperliquid has reached approximately $6.57 billion, with USDC dominating absolutely, accounting for about $6.43 billion.
Since the AQAv2 revenue-sharing ratio is approximately 90%, a very simple formula can be used for estimation:
- AQAv2 Annualized Income ≈ USDC Scale on Hyperliquid × Reserve Yield × 90%
Using the current circulation scale of approximately $6.43 billion USDC as a benchmark, the income AQAv2 could contribute under different yield rates is roughly as follows:
Even calculating with a 3% yield rate and the current circulation scale of approximately $6.43 billion USDC, AQAv2 is expected to add about $476,000 in daily income for Hyperliquid, annualizing to about $174 million.
What does this number mean? Hyper Screener's latest data shows that Hyperliquid's cumulative income for August so far is $50.27 million. Roughly calculated over 26 days, the daily average is about $1.933 million. This means if AQAv2 operates at a 3% yield rate, the new income would be equivalent to approximately 24.6% of the current daily average income.
Even based on this static assessment, AQAv2 is already a non-negligible income source on the margin. The more important point is that the USDC circulation scale on Hyperliquid is still growing rapidly —— More USDC means more reserve earnings; more reserve earnings means more funds entering the Assistance Fund; and ultimately, more funds for HYPE buybacks.
Therefore, the $1.5 - 2 billion in income is by no means the upper limit for AQAv2; it rather resembles a starting point for baseline income.
As the bull market arrives, the good news keeps coming
If the market's core valuation logic for HYPE previously depended heavily on Hyperliquid's trading volume and fee income, then the launch of AQAv2 signifies that this logic is expanding further —— HYPE's buyback capacity is no longer solely tied to trading activity; it is now also tied to stablecoin scale.
Coinciding with HYPE's recent strong market performance. With improving macro liquidity and overall positive market sentiment, HYPE has broken through $80 and reached a new all-time high. The market is reflecting Hyperliquid's growth expectations through price, and AQAv2 further provides HYPE with a new fundamental support —— The larger the USDC scale, the higher the reserve earnings, and ultimately, the more funds available for HYPE buybacks.
Of course, after the short-term rally, HYPE's valuation is no longer low. Whether it can continue to rise will ultimately depend on whether income, stablecoin scale, and buyback scale can sustain growth. However, from the current perspective, at least, Hyperliquid is evolving from an on-chain trading platform that "makes money from transaction fees" into a protocol that can continuously capture value from trading, stablecoins, and even the entire on-chain financial ecosystem.
AQAv2 may not be the sole reason for HYPE's next upward move, but it is likely an important part of its long-term value capture logic.
