The Hyperliquid (HYPE) stablecoin market is becoming increasingly concentrated as liquidity continues to shift toward USD Coin (USDC) instead of native USDH.
This trend reflects traders’ preference for greater liquidity and established settlement assets over new DeFi-native stablecoins.
The Hyperliquide Foundation has allocated approximately $10 million in grants to help cover migration costs and ensure each of its protocols runs smoothly. These are HIP-1, HIP-3, HyperEVM, bridges and native markets.
Additionally, users can exchange their USDH for USDC via the same migration paths, reducing friction during the transition.
According to DeFiLlama, USDC now dominates Hyperliquid’s stablecoin liquidity.
In fact, USDC represents $5.74 billion of Hyperliquid’s $5.96 billion stablecoin pool. Conversely, USDH holdings fell sharply to just $20 million.
Meanwhile, Tether (USDT) sits at around $155 million. These numbers clearly indicate that network effects support the growing dominance of USDC.
This imbalance suggests that network effects are strengthening USDC’s leadership, making it the preferred collateral in spot and perpetual markets. If institutional activity continues to grow, USDC’s dominance could further strengthen.
Otherwise, USDH would need significant utility improvements to regain market share.
Protocol Activity Boosts HYPE’s Utility
This orderly migration is already resulting in stronger on-chain activity as Hyperliquid continues to grow around its first USDC model. The change did not disrupt user participation.
This enabled a sustained level of around 6,932 daily active addresses and over 315,000 daily transactions, according to DeFiLlama data.
Meanwhile, perpetual trading volume remained near $2.8 billion, reinforcing Hyperliquid’s leadership in the on-chain derivatives space.
The growing business also generates annualized revenues in the hundreds of millions, creating recurring value for the ecosystem. These fees are increasingly flowing into HYPE via staking, priority fees, buybacks, and incentives instead of relying primarily on speculation.
If trading activity and USDC liquidity continue to grow together, HYPE’s long-term value capture could further strengthen. Otherwise, a slowdown in network activity could gradually reduce revenue growth.
