Hyperliquid has officially activated its AQAv2 framework, directing yield generated from USDC reserves toward programmatic HYPE token buybacks and permanent burns.
The initiative, supported by Circle and Coinbase, is designed to channel around 90 percent of reserve yield to the protocol, with the first buyback and burn execution scheduled for October 3. Meanwhile, the high time frame chart shows a trap.
Hyperliquid activates AQAv2
Hyperliquid has officially activated its Aligned Quote Asset v2 (AQAv2) framework, introducing a new mechanism designed to channel yield generated from USDC reserves into the buyback and permanent burning of HYPE tokens.
The framework went live on August 26, marking a shift in how the yield generated from USDC held within the ecosystem can be used to support HYPE.
Under AQAv2, approximately 90 percent of the yield generated from the USDC reserves will be shared with Hyperliquid and transferred to the Assistance Fund (AF) in 30-day cycles. The fund will then use the proceeds to purchase HYPE tokens from the open market before permanently removing them from circulation through burns.
The mechanism is supported by Circle as the technical deployer and Coinbase as the treasury manager, adding established infrastructure providers to the framework. Yield accumulation begins on August 26, while the first payout and corresponding HYPE buyback and burn are scheduled for October 3.
The initiative could create an additional source of structural demand for HYPE because reserve-generated yield is converted into market purchases.
At the same time, permanently burning the acquired tokens reduces the circulating supply. If the program generates substantial and sustained yield, it could therefore create a recurring buyback-and-burn cycle, potentially strengthening HYPE’s supply-demand dynamics over the longer term.
Usually when there is a new framework, the price follows with a huge spike as the crowd gets excited about this new mechanism. However, analyst Crypto Patel mentioned that the higher time frame looks like a potential trap that could trap retail longs.
For example, imagine an asset breaks above a major resistance level on the daily or weekly chart.
Traders may interpret this as a confirmed breakout and start opening leveraged long positions, expecting the price to continue higher. This creates a large concentration of longs around the breakout area.
The “trap” happens if the breakout fails. The price could move slightly higher first, encouraging even more traders to enter, and then reverse below the key support level. Once that happens, leveraged longs begin getting liquidated.
Those liquidations force positions to close by selling the asset, which creates additional downward pressure. The analyst considered values only above $84 as bullish.
