DeFi's Stability Crossroads: USDH Faces Trust, Timing, and Ticker Battles

Hyperliquid, a decentralized exchange built on its own blockchain, is taking significant steps to launch a proprietary stablecoin, USDH, following an open call for proposals from teams interested in developing the token. The USDH stablecoin is expected to be “Hyperliquid-first” and “Hyperliquid-aligned,” with the aim of creating a stablecoin that operates seamlessly within the platform’s ecosystem. The initiative was announced via a Discord post, inviting teams to submit proposals for the next five days, after which validators will vote to select the winning team. The goal is to deploy a natively minted stablecoin on Hyperliquid’s layer-1 network, with a focus on compliance and integration with fiat gateways.

The USDH project has already drawn attention from multiple teams and developers. One of the most prominent proposals comes from Native Markets, which aims to build a GENIUS Act-compliant stablecoin and share its reserve proceeds with the Hyperliquid Assistance Fund. This proposal has been well-received by the community, garnering the most reactions in the USDH Discord channel. Native Markets also intends to leverage fiat gateways to ensure seamless onboarding for users, reinforcing the potential of USDH as a central stablecoin within Hyperliquid’s growing infrastructure.

However, the USDH launch has not been without controversy. Existing Hyperliquid stablecoin protocol Hyperstable has raised objections, citing that the USDH ticker was previously blacklisted, forcing the team to use the USH ticker instead. The author of a critical post, identified as Max, argued that the shift in allowing the USDH ticker now, after months of development using an alternative ticker, is unfair and undermines trust in the platform’s neutrality. This concern highlights the tension between innovation and continuity in the rapidly evolving decentralized finance (DeFi) space.

Discord user Shisho, reportedly a co-founder of the Hyperliquid DEX aggregator LiquidLaunch, countered these claims by stating that the regulatory landscape has evolved since Hyperliquid’s initial decisions, citing the recent enactment of the GENIUS Act. This perspective underscores the dynamic nature of DeFi governance and the challenges of adapting to new legal frameworks without alienating existing stakeholders. The debate reflects a broader theme within the crypto industry: the balance between regulatory compliance and community-driven innovation.

Additionally, a user known as HyperInvestigator has questioned the legitimacy of Native Markets’ proposed deployer address, noting that the wallet in question was freshly created and funded just five hours before the USDH announcement. This timing has raised eyebrows among the community, as it may suggest potential coordination or manipulation in the proposal process. While no definitive evidence of foul play has been presented, the concern highlights the importance of transparency and trust in the governance of decentralized platforms.

Arthur Hayes, co-founder of Maelstrom and a prominent voice in the crypto space, has previously outlined a bullish case for Hyperliquid’s native token, HYPE. His thesis is built on a valuation model projecting a $10 trillion stablecoin market by 2028, with Hyperliquid capturing a significant share of that growth. Hayes links the rise of stablecoins to global fiat debasement, arguing that users will increasingly turn to on-chain platforms like Hyperliquid for trading and liquidity. While Hayes’ forecast relies on optimistic assumptions about market conditions and Hyperliquid’s ability to maintain its current pace of execution, it provides a compelling narrative for the potential of USDH as a cornerstone of the platform’s economic model.

Hyperliquid’s move to launch a proprietary stablecoin reflects a broader trend among decentralized exchanges to create self-sustaining ecosystems that reduce reliance on external stablecoin issuers. By integrating USDH into its platform, Hyperliquid aims to strengthen its position in the competitive DeFi landscape while capturing a share of the growing stablecoin market. As the USDH proposal process unfolds, the response from the community and validators will be crucial in shaping the future of the stablecoin and Hyperliquid’s broader vision.

Source:

[1] Hyperliquid's HYPE Token: Why Arthur Hayes Thinks It Has 126x Upside (https://www.coindesk.com/markets/2025/08/30/hyperliquid-s-hype-token-why-arthur-hayes-thinks-it-has-126x-upside-potential)

[2] Hyperliquid Seeks Proposals to Launch USDH Stablecoin (https://finance.yahoo.com/news/hyperliquid-seeks-proposals-launch-usdh-181839154.html)