"Who Controls USDH Could Redefine HYPE’s Future"

Hyperliquid (HYPE) has emerged as one of the most active decentralized exchanges in the DeFi space, with recent developments hinting at potential structural changes that could influence its token's price trajectory. The platform is preparing to launch its native U.S. dollar stablecoin, USDH, which is expected to reduce its dependency on external stablecoins such as USDC and USDT. This move is significant as Hyperliquid processed $398 billion in perpetual derivatives trading volume and $20 billion in spot trades in the last month, underscoring the potential demand for a native stablecoin solution within its ecosystem [1].

The USDH stablecoin will be issued through an on-chain governance process, with validators deciding which proposal to adopt. The ticker has already been reserved, and teams interested in deploying USDH can submit their proposals for consideration. Among the bidders, Paxos has emerged as a leading contender. The firm proposed a revenue-sharing model in which 95% of interest earnings from the stablecoin's reserves would be allocated toward HYPE token buybacks. This structure is expected to provide a direct financial incentive for HYPE holders, potentially enhancing the token's value proposition [2].

Another major bidder, Frax Finance, proposed the issuance of USDH natively on Hyperliquid using its frxUSD stablecoin. While the details of how reserve earnings would be utilized remain unclear, Frax suggested that they could be used to enhance staking yields, conduct token buybacks, or provide rebates to traders and USDH holders. Agora, a white-label stablecoin issuer, also submitted a proposal, offering to share 100% of net revenue from USDH reserves with HYPE token buybacks. This approach has sparked some questions within the community regarding Agora's incentives to manage the stablecoin [3].

Native Markets, a newly formed entity, has also entered the bidding. The team plans to back USDH with off-chain reserves managed by BlackRock and on-chain reserves through Bridge, a stablecoin platform owned by Stripe. Their proposal involves allocating 50% of interest earnings toward HYPE buybacks and the remaining 50% toward USDH growth initiatives. However, concerns have been raised about the reliance on a single platform for stablecoin issuance, which could pose a potential single point of failure [3].

The competitive landscape for USDH issuance has intensified with multiple proposals vying for validator approval. As Hyperliquid moves toward launching its native stablecoin, the platform may see improved efficiency and a more aligned economic model. The launch could also lead to increased liquidity and trading activity, which are key drivers of price movement in the DeFi space. Given the platform's recent performance and the potential structural changes introduced by USDH, technical analysts suggest that HYPE could break above the $52 resistance level if the stablecoin gains traction and drives increased usage and liquidity [1].

Source: [1] Hyperliquid Moves Forward to Launch Proprietary Stablecoin (https://www.coindesk.com/tech/2025/09/05/hyperliquid-moves-forward-to-launch-proprietary-stablecoin) [2] Paxos Proposes to Issue USDH Stablecoin for Hyperliquid (https://finance.yahoo.com/news/paxos-proposes-issue-usdh-stablecoin-113000004.html) [3] Meet the bidders vying to build Hyperliquid's USDH stablecoin (https://www.dlnews.com/articles/defi/paxos-frax-agora-and-native-markets-compete-to-build-usdh-stablecoin/)