Key Takeaways
- Hyperliquid is retiring the Arbitrum bridge, which it used initially for depositing and withdrawing USDC.
- Since the launch of HyperEVM, the exchange has started transitioning to native USDC.
- Users may encounter friction during the migration.
Hyperliquid is set to retire the Arbitrum bridge that has been used to bring stablecoins into the ecosystem until now, as the platform migrates to native USDC.
The update is designed to make deposits and withdrawals smoother in the long run; however, users may encounter some friction during the transition period.
Arbitrum no Longer Needed in the HyperEVM Era
When Hyperliquid initially launched in 2023, the platform didn’t have its own smart contract environment.
HyperCore matched orders and updated balances, but ultimate settlement occurred on Arbitrum, which mirrored the off-chain ledger.
With the launch of HyperEVM in February, the exchange gained its own dedicated blockchain and started to reduce its reliance on Arbitrum.
The arrival of native USDC on HyperEVM in September marks a significant milestone in that journey.
With Hyperliquid launching the subsequent HyperCore integration on Monday, Dec. 8, Hyperliquid is close to eliminating its final Arbitrum dependency.
Hyperliquid supports native USDC thanks to Circle’s Cross-Chain Transfer Protocol (CCTP)—a bridging solution that enables users to move stablecoins between more than twenty supported networks.
For Hyperliquid users, CCTP streamlines deposits and withdrawals, especially for tokens that don’t originate on Arbitrum.
Previously, users who wanted to deposit Ethereum USDC on Hyperliquid would first need to bridge it to Arbitrum, and then mint the balance on HyperCore. But under the new model, the platform supports one-click deposits from any CCTP-enabled chain.
Friction Anticipated During Migration
Since the majority of Hyperliquid’s USDC is currently held on Arbitrum, withdrawals to HyperEVM may fail while the new chain establishes liquidity.
Within HyperCore, stablecoins issued on HyperEVM and Arbitrum are fungible. To ensure users can withdraw to the new chain, Hyperliquid needs to transfer old Arbitrum balances and maintain liquidity across both chains.
If there is a surge of HyperEVM withdrawals, the exchange may struggle to keep up; however, the Hyperliquid team has reassured users that they will still be able to withdraw from the Arbitrum bridge if issues arise.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
