Key facts
- Hyperliquid activated its Aligned Quote Asset v2 (AQAv2) framework on Wednesday.
- The AQAv2 framework will use 90% of yields generated from USDC reserves to buy back and burn HYPE tokens.
- This creates a second buyback route for HYPE tokens, in addition to the existing trading fee-driven program.
- Coinbase will serve as the treasury deployer and Circle as the technical deployer for the AQAv2 mechanism.
- Market estimates place potential annual contributions to the Assistance Fund in the $135-200 million range.
- HYPE price saw a more than 5% jump following the activation and news of CFTC involvement.
Hyperliquid has launched its Aligned Quote Asset v2 (AQAv2) framework, a new mechanism designed to enhance the deflationary nature of its native HYPE token. The protocol will now utilize 90% of the yields generated from its USDC reserves to buy back and subsequently burn HYPE tokens. This initiative adds a significant revenue stream to the existing buyback program, which already dedicates 99% of trading fees to HYPE buybacks and burns.
Coinbase and Circle are playing key roles in the AQAv2 framework, serving as the treasury and technical deployers, respectively. The framework directs USDC balances between technical and treasury addresses, with yield accrual commencing immediately. Revenue will be settled in 30-day cycles, with the first payout to the Assistance Fund scheduled for October 3.
Market analysts estimate that the AQAv2 framework could contribute between $135 million and $200 million annually, depending on the size of USDC reserves, which are currently reported to be around $5–7 billion. This new revenue stream is expected to scale with stablecoin deposits, offering a different growth dynamic compared to the trading fee-driven buybacks. The combined buyback engines are anticipated to significantly increase HYPE's deflationary pressure as platform activity and USDC holdings grow.
Following the activation of AQAv2 and news regarding the CFTC's engagement with Hyperliquid, the HYPE token experienced a price surge of over 5%, nearing its all-time high. Trading volume also saw a slight increase. Concurrently, trading firm Wintermute has substantially reduced its short exposure to Hyperliquid, decreasing it from $211.53 million to $80.48 million, while maintaining a smaller long position.