"Hyperliquid's USDH Race: A Power Play for Financial Sovereignty"

Hyperliquid, a leading decentralized exchange with over $398 billion in perpetual derivatives trading volume and $20 billion in spot trades, is moving forward with the launch of its proprietary U.S. dollar stablecoin, USDH, according to a recent announcement from the Hyperliquid Foundation on its Discord server [1]. The initiative aims to create a stablecoin that is “Hyperliquid-first, Hyperliquid-aligned, and compliant,” with the ticker USDH reserved for this purpose. Validators will soon vote to allocate the ticker through an on-chain governance process [1].

The stablecoin, if successfully launched, could reduce Hyperliquid’s reliance on Circle’s USDC, which currently accounts for 95% of the platform’s $5.6 billion in stablecoin supply [1]. By creating its own stablecoin, Hyperliquid may also capture revenue from the assets backing the token, further strengthening its financial infrastructure and ecosystem.

Multiple stablecoin providers have already submitted proposals to issue USDH. Among them, Paxos, Frax, and Agora have emerged as key contenders [2]. Paxos’ Paxos Labs has proposed a model compliant with the EU’s MiCA and the U.S. GENIUS Act, offering native deployment on HyperEVM and HyperCore, with 95% of the interest generated from USDH going toward HYPE token buybacks. It also pledged to provide zero-fee AMM liquidity and support for HYPE as an asset within its brokerage infrastructure, which powers trading for platforms such as PayPal, Venmo, and MercadoLibre [2].

Frax’s proposal centers around its frxUSD stablecoin, which is backed by BlackRock’s yield-bearing BUIDL onchain treasury fund. Under Frax’s plan, USDH would be 1:1 backed by frxUSD, with 100% of the underlying treasury yield programmatically distributed to Hyperliquid users. The proposal emphasizes a “community-first” approach, with no Frax take rate and a focus on compliance and interoperability. Frax also noted that with a current 4% APR, Hyperliquid’s stablecoin deposits could generate $220 million in annual yield revenue [2].

Agora, another major contender, has pledged to share 100% of net revenue with Hyperliquid, to be distributed either to the platform’s Assistance Fund or used for HYPE token buybacks. Its USDH would be backed 1:1 by cash and short-term U.S. Treasurys, with Agora’s institutional infrastructure, Rain’s global card and on/offramp coverage, and LayerZero’s interoperability forming the backbone of the proposal. Agora emphasized neutrality and a lack of competing infrastructure, distinguishing itself from Paxos and other stablecoin issuers [2].

The race for USDH issuance has attracted attention from other major players, including a new team dubbed Native Markets, which includes former Uniswap Labs executive MC Lader and blockchain researcher Anish Agnihotri. Native Markets pledged to integrate Stripe-owned Bridge, promising compliance and a meaningful share of reserve proceeds to Hyperliquid’s Assistance Fund. Ethena, the issuer of the world’s third-largest stablecoin, also hinted at submitting a proposal, signaling growing interest in this strategic asset class [2].

Hyperliquid has set a September 10 deadline for proposal submissions, with a validator vote scheduled for September 14. The Foundation will not participate in the vote, ensuring the selection process remains decentralized. The chosen issuer will gain approval to launch USDH, marking a significant step in Hyperliquid’s strategy to enhance its ecosystem and reduce dependency on third-party stablecoins [2].

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, Frax, and Agora fight for Hyperliquid's USDH contract with more bids likely incoming (https://www.theblock.co/post/369720/paxos-frax-and-agora-fight-for-hyperliquids-stablecoin-contract-with-more-bids-likely-incoming)