Hyperliquid’s USDH Stablecoin Aims to Challenge USDC’s Dominance with Governance and Profit Potential

Hyperliquid is advancing plans to introduce its native U.S. dollar stablecoin, USDH, as a key component of its broader ecosystem. The decentralized exchange (DEX) announced the initiative through its Discord channel on Sept. 5, outlining a governance-driven process to determine the development team responsible for deploying the token. This approach, which involves validators voting on proposals, marks a competitive and decentralized approach to the stablecoin’s issuance. Hyperliquid has reserved the USDH ticker and emphasized its goal to create a “Hyperliquid-first, Hyperliquid-aligned, and compliant” stablecoin that integrates seamlessly into the platform’s infrastructure [1].

The proposed stablecoin would serve as a critical liquidity asset within Hyperliquid’s trading ecosystem, which saw $398 billion in perpetual derivatives volume and $20 billion in spot trades in the most recent month, according to DeFiLlama data. Circle’s USDC currently dominates the stablecoin supply on the platform, accounting for 95% of the $5.6 billion in deposits. By launching USDH, Hyperliquid aims to reduce dependency on third-party stablecoin providers and potentially capture revenue from the token’s reserves [2].

Omar Kanji, partner at venture capital firm Dragonfly, highlighted the potential financial implications of such a transition. He estimated that a full migration from USDC to USDH could generate an additional $220 million in annualized revenue for HYPE token holders, assuming a 4% yield from the stablecoin’s backing assets. Conversely, this shift would reduce Circle’s revenue by an equivalent amount and cut USDC’s outstanding supply by 7% [2]. These potential benefits underscore the strategic value of USDH within Hyperliquid’s ecosystem.

Alongside the stablecoin initiative, Hyperliquid is implementing broader market structure upgrades to improve trading efficiency. The exchange plans to reduce taker fees, maker rebates, and user volume contributions by 80% for spot pairs involving two quote assets. These adjustments are intended to deepen liquidity and lower barriers for traders, aligning with Hyperliquid’s broader mission to decentralize participation and improve accessibility [2].

The timing of these updates coincides with a surge in Hyperliquid’s trading volume and HYPE token performance. In August, the DEX recorded a record monthly trading volume of $400 billion, pushing its market share above 60%. The HYPE token has also seen a significant price increase, rising more than 22% in the past month to reach a high of $51 before settling near $47 at press time [2]. This momentum suggests strong demand for the platform’s evolving infrastructure and governance model.

Separately, Paxos has expanded its influence in the stablecoin space through the Global Dollar Network (GDN), which is now backed by 25 companies, including Robinhood, Galaxy, and Kraken. The Paxos-issued USDG stablecoin, which operates on a revenue-sharing model, has reached $285 million in circulation and is compliant with Singapore’s upcoming stablecoin regulations. While it remains smaller than USDT and USDC, USDG’s growth trajectory highlights the increasing diversity of stablecoin offerings and the potential for decentralized alternatives to traditional models [3].

Source:

[1] Hyperliquid Moves Forward to Launch Proprietary ... (https://www.coindesk.com/tech/2025/09/05/hyperliquid-moves-forward-to-launch-proprietary-stablecoin)

[2] Hyperliquid is planning USDH stablecoin launch (https://cryptoslate.com/hyperliquid-is-planning-usdh-stablecoin-launch/)

[3] Paxos-Backed USDG Builds Global Presence Through ... (https://cryptodnes.bg/en/paxos-backed-usdg-builds-global-presence-through-revenue-sharing-model/)