DeFi’s Next Power Play: Who Controls USDH Controls Hyperliquid’s Future

Hyperliquid’s USDH stablecoin, a highly contested asset within the decentralized finance (DeFi) sector, has drawn significant attention from major financial players, with Native Markets currently leading the bidding process at 30.78% support and Paxos following at 11.54%. The decentralized perpetual futures exchange, which has rapidly become a dominant force in the DeFi ecosystem, is auctioning its reserved USDH ticker to determine the entity best positioned to issue a native stablecoin that can replace USDC as the primary margin currency on its platform.

The auction process is governed by Hyperliquid’s on-chain validator voting system, allowing the community to influence the final outcome. Validators are required to declare their voting preferences by September 11, with the final voting period running from 10:00 to 11:00 UTC on September 14. Users are encouraged to stake with validators that align with their preferred outcome, creating a dynamic governance process that reflects the interests of the broader ecosystem. As of now, Native Markets has emerged as the top contender, supported by its deep integration into the Hyperliquid ecosystem and a team of respected operators and investors.

Paxos, another major participant, has demonstrated its commitment to the Hyperliquid ecosystem by proposing a 95% revenue-sharing model, which includes leveraging its PayPal/Venmo integration and global compliance infrastructure. The company has also pledged $20 million in ecosystem incentives and global payments support across multiple networks. Despite its strong credentials, Paxos trails Native Markets, with support at 11.54%, according to current staking dynamics. Ethena, another prominent bidder, has proposed a model centered on USDtb, a tokenized USD stablecoin backed by BlackRock’s BUIDL money-market fund. While Ethena’s bid is compelling, its support level has not yet matched the leading contenders.

The introduction of USDH is expected to significantly impact the DeFi landscape, particularly by reducing Hyperliquid’s reliance on external stablecoins like USDC and USDT. Currently, 95% of the platform’s collateral is denominated in USDC, making the transition to a native stablecoin a strategic move to enhance financial autonomy and potentially generate additional revenue. The competition for the USDH ticker has underscored the broader trend of institutional and decentralized finance players vying for dominance in high-growth blockchain platforms. With Hyperliquid processing $378 billion in trading volume in a single month, the stakes for the winning bidder are exceptionally high.

The implications of the USDH auction extend beyond the immediate competition. The successful integration of a native stablecoin could reshape how liquidity is managed and distributed within the Hyperliquid ecosystem, with potential benefits for HYPE token holders through yield-sharing mechanisms and buyback programs. Furthermore, the auction highlights the evolving role of stablecoins in DeFi, as projects seek to align with platforms offering robust infrastructure, regulatory compliance, and deep liquidity. As the final decision approaches, the market will closely watch how the selected issuer leverages the USDH ticker to establish a foothold in one of the most active DeFi ecosystems.