If you've been keeping an eye on the crypto scene, especially around decentralized exchanges and stablecoins, you might have caught a intriguing tweet from Rob Hadick, a General Partner at Dragonfly. He pointed out that Circle, the company behind USDC, could be facing a big shake-up soon. According to Hadick, Circle's fastest-growing revenue source—tied to Hyperliquid—might represent about 10% of its net income, and it's all at risk this week. Let's break this down in simple terms and see what it means for meme token traders.

What's the Buzz About?

Hyperliquid is a decentralized perpetual futures exchange (often called a perp DEX) built on its own Layer 1 blockchain. It's gained massive traction for trading crypto derivatives, including popular meme tokens like those inspired by frogs, dogs, or whatever the community's cooking up next. The platform's spot and perp markets rely heavily on stablecoins for liquidity, and right now, USDC is king there.

Hadick shared a chart showing the explosive growth of USDC supply on Hyperliquid. Starting from nearly zero at the beginning of 2024, it climbed steadily to around 8% of the total USDC supply by mid-2025. That's no small feat—USDC's overall market cap is in the tens of billions, so Hyperliquid holding such a chunk means serious business for Circle.

The data, pulled from analytics firm Artemis, highlights how Hyperliquid has become a powerhouse for USDC usage. Circle earns revenue primarily from interest on the reserves backing USDC (think U.S. Treasuries and other safe assets). With more USDC locked in Hyperliquid, that's more yield flowing back to Circle. But here's the twist: Hyperliquid is gearing up to launch its own native stablecoin, USDH, which could dethrone USDC on the platform.

Why Is USDH a Game-Changer?

Hyperliquid announced plans for USDH as part of its next network upgrade, expected imminently. Unlike relying on external stablecoins like USDC or USDT, USDH will be tailor-made for the ecosystem. The cool part? Validators—folks who secure the network—get to vote on which team issues it. Proposals are pouring in from heavy hitters:

• Paxos: They're offering a GENIUS Act and MiCA-compliant stablecoin, with 95% of reserve yields used to buy back HYPE (Hyperliquid's native token). This setup emphasizes regulatory compliance to attract institutions.
• Frax Finance: Another contender, focusing on scalability and integration across chains.
• Agora and partners: Proposing 100% revenue share back to the ecosystem, with big-name custodians like State Street for reserves.

Other teams like Bridge (from Stripe) are in the mix, but debates rage about conflicts of interest and scalability. The winner deploys USDH, potentially redirecting billions in stablecoin volume away from USDC. Hyperliquid's also slashing trading fees by up to 80% and opening up asset listings, which could supercharge liquidity.

For Circle, this spells trouble. If USDH becomes the go-to stable on Hyperliquid, that 8% of USDC supply could migrate, cutting into Circle's interest income. Hadick estimates this as ~10% of Circle's net revenue, a hit that might not be fully priced into markets yet. Replies to the tweet echo this sentiment, with users joking about Circle not deserving Hyperliquid or predicting competitors like World Liberty stepping in.

How Does This Affect Meme Tokens?

At Meme Insider, we're all about meme tokens, and Hyperliquid is a hotspot for them. Platforms like this let traders go long or short on volatile memes without owning the underlying assets—perfect for the high-risk, high-reward vibe. Many meme perps, from PEPE to DOGE-inspired tokens, thrive here due to deep liquidity and low fees.

With USDH's launch:

• Better Liquidity for Memes: A native stablecoin could mean tighter spreads and more efficient trading pairs for meme tokens. Less reliance on USDC bridges reduces friction.
• Lower Fees: The upcoming fee cuts make it cheaper to trade, potentially drawing more volume to meme perps and boosting their visibility.
• Ecosystem Growth: Yields from USDH reserves flowing back to buy HYPE or fund community initiatives could pump the entire Hyperliquid economy, indirectly benefiting meme projects built on it.
• Risks for Traders: If USDC usage drops, there might be short-term volatility as liquidity shifts. Meme traders should watch for any migration incentives or bridging tools.

This shift underscores a broader trend in DeFi: protocols building their own tools to capture more value internally. For meme token enthusiasts, it's a reminder to stay agile—platforms like Hyperliquid evolve fast, and native integrations can create new opportunities.

If you're trading memes on Hyperliquid, keep an eye on the validator vote and network upgrade. It could redefine how we interact with stables in perp trading. For more insights on meme tokens and DeFi developments, stick with Meme Insider.

Check out the original tweet for the full discussion, and let us know your thoughts in the comments!