BlackRock-Backed Stablecoin Could Redefine DeFi Finance

Ethena Labs, the developer of the synthetic-dollar protocol, has submitted a proposal to issue Hyperliquid’s stablecoin, USDH, in a move that could reshape the decentralized exchange’s monetary infrastructure. The initiative, if approved by Hyperliquid’s community, would see USDH backed by Ethena’s USDtb stablecoin, which is fully collateralized by BlackRock’s tokenized BUIDL fund. This proposal is part of a broader effort by Hyperliquid to transition from using existing stablecoins like Circle’s USDC and Tether’s USDT to a more “Hyperliquid-aligned” alternative.

According to the proposal, USDtb would serve as the primary reserve for USDH, providing the latter with indirect backing by the BUIDL fund, which manages over $14 trillion in assets. The transition is expected to bring institutional-grade cash management and on-chain liquidity to Hyperliquid’s ecosystem. BlackRock’s Head of Digital Assets, Robert Mitchnick, expressed enthusiasm for the collaboration, stating that the initiative would offer Hyperliquid users access to a stablecoin with strong institutional support.

Ethena’s proposal is backed by key industry players, including Anchorage Digital, a federally chartered digital assets bank, and Securitize, the BlackRock-backed firm specializing in real-world asset tokenization. Anchorage Digital would issue USDtb natively on Hyperliquid’s network, while Securitize would deploy its platform on the layer-1, enabling the inclusion of institutional-grade tokenized funds, stocks, and other financial products at no deployment cost. These partnerships underscore the growing institutional interest in Hyperliquid’s ecosystem.

Hyperliquid, which launched in the first quarter of 2023, has rapidly gained traction in the DeFi space. The platform currently holds $5.7 billion in stablecoins across its network, as reported by crypto data provider DefiLlama. The project has evolved from being perceived as a niche DeFi startup to a platform attracting significant attention from major industry players like Ethena and BlackRock.

The potential adoption of USDtb as the primary stablecoin for USDH could have significant implications for the HYPE token, which is Hyperliquid’s governance token. As of recent, HYPE traded at around $53, reflecting a 20% increase in the past day according to CoinGecko. The token allows holders to participate in key governance decisions, such as software upgrades and strategic initiatives. Ethena’s proposal further outlines that at least 95% of the revenue generated by USDH’s reserves would be distributed to Hyperliquid’s Assistance Fund, with proceeds also used for HYPE purchases and validator distributions.

The proposal includes additional financial incentives, such as covering transaction costs for USDH to become the primary stablecoin on Hyperliquid’s exchange. These measures aim to facilitate a smooth transition while ensuring that Hyperliquid continues to offer robust, low-cost services to its users. The move highlights the ongoing convergence between institutional finance and decentralized infrastructure, with major players seeking to integrate their offerings into high-growth DeFi platforms.