Hyperliquid activates AQAv2 to fund HYPE token buybacks with USDC yield

Hyperliquid has activated its Aligned Quote Asset v2 (AQAv2) framework, directing approximately 90% of the yield from its $5 billion USDC reserves toward HYPE token buybacks and burns. Approved by 69.08% of validators, the upgrade is supported by Circle and Coinbase, who each staked 500,000 HYPE. The mechanism is estimated to generate $135 million to $160 million annually, supplementing Hyperliquid's existing trading-fee buybacks. The first payout to the Assistance Fund is scheduled for October 3, 2026.

AQAv2 USDC yield mechanism

• ▪AQAv2 reserve income accumulates over 30-day cycles before transferring automatically to Hyperliquid's Assistance Fund eight days after the cycle closes.
• ▪The first AQAv2 payout to the Assistance Fund is scheduled for October 3, 2026, following an initial implementation grace period.
• ▪The AQAv2 framework directs approximately 90% of cost-adjusted reserve yield generated from USDC supplied to Hyperliquid back to the protocol.
• ▪Hyperliquid officially activated its Aligned Quote Asset v2 (AQAv2) framework on August 26, 2026, to direct yield from USDC reserves toward HYPE token buybacks.
• ▪AQAv2 maintains USDC divided in a 1:9 ratio, keeping 10% in a linked HyperEVM contract and 90% at Coinbase's designated treasury address.

Circle technical infrastructure role

• ▪Circle staked 500,000 HYPE tokens to support the activation of the AQAv2 framework and is working toward becoming a network validator.
• ▪Circle serves as the technical deployer for USDC on Hyperliquid, managing minting, redemption, and cross-chain infrastructure through its Cross-Chain Transfer Protocol.

Coinbase treasury management role

• ▪Coinbase staked 500,000 HYPE tokens to support the activation of the AQAv2 framework, with its treasury deployer stake subject to slashing if funds are insufficient.
• ▪Coinbase serves as the official treasury deployer for USDC on Hyperliquid, managing the treasury reserves and the underlying reserve structure.

HYPE token buyback program

• ▪The Hyperliquid Assistance Fund has purchased more than 45 million HYPE tokens for approximately $1.1 billion since its creation, at an average cost near $24.90 each.
• ▪Hyperliquid has burned 462 million HYPE tokens valued at approximately $1.27 billion since the token's launch in November 2024.
• ▪Hyperliquid formalized a $30 million repurchase authorization to codify its HYPE token buyback program.

Revenue projections estimates

• ▪Hyperliquid's annualized revenue from trading fees is estimated to sit between $600 million and $950 million.
• ▪Projections suggest the annualized revenue from AQAv2 could reach up to $200 million depending on fluctuations in USDC reserve balances.
• ▪Market estimates suggest the USDC reserve yield on Hyperliquid could generate between $135 million and $160 million in annual buyback funding.

Validator approval threshold

• ▪The AQAv2 activation required validator support surpassing a 66.67% threshold to achieve network consensus.
• ▪The AQAv2 mechanism was approved by Hyperliquid validators, clearing the network consensus threshold with 69.08% support.