Coinbase is passing 90% of the interest earned on about $6 billion in customer deposits to decentralized trading platform Hyperliquid, according to a Grayscale research note published October 30. The income gives Hyperliquid a revenue stream that is less directly tied to trading activity: the platform recorded about $105 million in revenue in September, roughly in line with a year earlier despite a subdued crypto market.
USDC deposits add revenue beyond trading
The arrangement began in May, when Coinbase became the reserve partner for USDC on Hyperliquid. USDC is a dollar-pegged stablecoin. Grayscale says the deposits are invested in U.S. Treasuries, generating interest income for Hyperliquid even when trading activity slows.
Grayscale describes the interest as one of Hyperliquid's more stable sources of revenue. For platforms that rely on trading, a weaker market can weigh on transaction-linked income; deposit interest provides another channel. Its size, however, still depends on the amount deposited and the yield earned on those funds.
Coinbase keeps a share and gains USDC trading activity
Coinbase retains the deposits and the remaining 10% of the interest, Grayscale says. USDC has also become Hyperliquid's main trading currency, replacing USDH, a stablecoin designed in part to keep associated interest income within the Hyperliquid ecosystem.
The deal therefore combines an interest-sharing arrangement with a role for USDC in trading on the platform. Coinbase gives up most of the deposit interest in exchange for USDC's central position in Hyperliquid's markets. Grayscale's note does not specify what other benefits Coinbase receives or provide further terms of the agreement.
Stablecoin reserve income draws investor attention
How reserve income is shared has become a factor in revenue expectations for companies tied to stablecoins. In July, Mizuho and JPMorgan turned cautious on Circle, the issuer of USDC. JPMorgan also lowered its expectations for Coinbase, citing pressure on USDC's economic model.
Hyperliquid's roughly $105 million in September revenue shows how deposit interest can supplement platform earnings during a slow trading period. Grayscale's disclosure gives the deposit balance and the share of interest allocated to Hyperliquid, but does not state the yield, monthly interest amount or the income's share of the platform's total revenue.