Galaxy interpretation: Hyperliquid ecosystem's reintroduction of USDC, underlying reasons and multiple value analysis

⦿ Executive Snapshot

What: Hyperliquid has announced the reintroduction of USDC as the primary stablecoin, phasing out USDH.
Who: Key players include Hyperliquid, Coinbase, and Circle.
Why it matters: This shift represents a strategic realignment in the stablecoin landscape, optimizing Hyperliquid's ecosystem and highlighting the dominance of USDC over USDH.

Coinbase will manage the USDC reserve fund and share at least 90% of the reserve income with Hyperliquid.
Circle is responsible for the technology implementation and operation of the Cross Chain Transfer Protocol (CCTP).
Hyperliquid's revenue is expected to increase by $160 million annually due to the integration of USDC, marking a nearly 20% growth.
USDH previously struggled with a stagnant circulation of around $100 million, while USDC's volume in Hyperliquid has reached $5 billion.
The AQAv2 mechanism allows other stablecoin projects to integrate into Hyperliquid's ecosystem by pledging 500,000 HYPE tokens.

The original community-driven decision to select USDH as the native stablecoin highlighted a push for decentralized governance and autonomy within Hyperliquid.
The shift to USDC reflects a broader trend of established institutions consolidating their influence in the cryptocurrency market, especially in stablecoin offerings.

Immediate market consequences include the solidification of USDC's position, potentially sidelining other stablecoins like USDH.
Long-term implications may involve increased institutional participation and a more regulated environment as compliance measures strengthen within the ecosystem.

Regulatory risks could arise from the dependence on large institutions like Coinbase and Circle, which may face scrutiny from regulators.
There is a risk of community backlash against perceived governance overreach, as the decision was made without community voting.

Future developments to monitor include the successful migration of projects from USDH to USDC and the performance of the AQAv2 mechanism in practice.
Observing how Hyperliquid addresses community governance concerns will indicate the sustainability of its operational model.