Hyperliquid Aims to Reshape DeFi with Governance-Driven Stablecoin

Hyperliquid, a leading decentralized exchange and Layer-1 chain, is advancing plans to launch a native U.S. dollar stablecoin, USDH, through an on-chain governance process. According to recent announcements, the USDH ticker is reserved and will be allocated via a validator vote in late September. The Hyperliquid Foundation emphasized that the goal is to create a “Hyperliquid-aligned, compliant USD stablecoin” that integrates directly into its ecosystem [1]. This move aims to reduce dependency on third-party stablecoins like USDC, which currently dominate 95% of the stablecoin supply on the network [1].

The proposed stablecoin strategy is part of a broader trend among crypto platforms to issue their own stablecoins in response to evolving regulatory frameworks and market dynamics. The U.S. has introduced the GENIUS Act, while the EU has implemented the Markets in Crypto-Assets (MiCA) regulation, both of which limit stablecoin interest payments to reduce competition with traditional banks [4]. Hyperliquid’s USDH could serve as an alternative to bridged assets such as Circle’s USDC and potentially capture a portion of the reserve asset revenues. Analysts estimate that a 15% liquidity share of USDH could redirect $5.5 billion in assets, generating $220 million annually for HYPE token holders [2].

The governance model for USDH includes a competitive bidding process where teams submit proposals to build and manage the stablecoin. The winning proposal will be selected by validator quorum, ensuring a decentralized and transparent approach. Notably, Hyperliquid Foundation validators will abstain from the vote, aligning with the team securing the most non-Foundation support to minimize perceptions of centralized control. The process mirrors the project’s broader emphasis on decentralization and community oversight, as highlighted by research analyst Jaehyun Ha of Presto, who described the move as a strategic effort to oppose the centralized control typical of many exchanges [2].

Hyperliquid’s trading activity suggests strong potential demand for USDH. In the past month, the platform executed $398 billion in perpetual derivatives trading volume and $20 billion in spot trades, according to DefiLlama data. The network’s total value locked (TVL) has also grown significantly, rising from $317 million in January 2025 to approximately $2.5 billion today [3]. This growth underscores the platform’s expanding influence in the decentralized finance (DeFi) space and positions USDH as a strategic asset to further integrate trading and liquidity provision within the Hyperliquid ecosystem.

The broader stablecoin market has also seen rapid expansion, with total market capitalization exceeding $285 billion in recent weeks. Tether’s USDT remains the dominant player, holding a 58% market share, but the emergence of platform-specific stablecoins like USDH reflects a growing trend among DeFi projects to control their financial infrastructure. The planned stablecoin could transform from a conventional stablecoin into a “powerful economic lever” within the Hyperliquid ecosystem, according to Ha [2]. This shift aligns with industry-wide efforts to build self-sustaining, regulated ecosystems amid increasing institutional adoption of digital asset strategies.

Hyperliquid’s USDH is expected to be launched as part of its next major network upgrade, with validators deciding the allocation of the ticker through an on-chain vote. The announcement has already sparked market reactions, with the platform’s native token, HYPE, rising to $47.42 following the update. The project also announced technical upgrades that will reduce trading fees and promote permissionless trading pairs, further enhancing liquidity and user experience [3]. As the stablecoin landscape continues to evolve, Hyperliquid’s approach highlights the role of governance and decentralization in shaping the next generation of DeFi infrastructure.

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] Hyperliquid Validators to Decide USDH Ticker in First ... (https://finance.yahoo.com/news/hyperliquid-validators-decide-usdh-ticker-052845788.html)

[3] Hyperliquid Could Launch USDH Stablecoin in Next ... (https://thedefiant.io/news/defi/hyperliquid-could-launch-usdh-stablecoin-in-next-network-upgrade)

[4] The EU's MiCA stablecoin regulation prevents ... (https://www.ledgerinsights.com/the-eus-mica-stablecoin-regulation-prevents-remuneration-or-does-it/)