Paxos Designs Stablecoin to Fuel HYPE Buybacks and Ecosystem Growth

Generated by AI AgentCoin World
Sunday, Sep 7, 2025 3:58 am ET1min read
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Aime RobotAime Summary

- Paxos proposes USDH stablecoin for Hyperliquid, aligning with U.S. and EU regulatory frameworks.

- 95% of USDH reserve interest will fund HYPE token buybacks, redistributing value to users and validators.

- USDH will operate on HyperEVM and HyperCore chains, leveraging Paxos' global infrastructure across 70+ partners.

- Hyperliquid's 70% decentralized futures market share and $106M monthly revenue drive USDH's strategic focus.

- The initiative reflects crypto industry trends toward compliant stablecoins with embedded yield and governance mechanisms.

Paxos, a stablecoin infrastructure provider, has proposed the launch of a Hyperliquid-first stablecoin, USDH, designed to align with regulatory frameworks such as the U.S. Senate’s proposed GENIUS Act and the EU’s Markets in Crypto-Assets (MiCA) directive. The announcement, made on Saturday, outlines a model where 95% of the interest earned from USDH reserves will be allocated to buybacks of Hyperliquid’s native token, HYPE. These repurchases will be redistributed to users, validators, and partner protocols, effectively creating a closed-loop value mechanism within the Hyperliquid ecosystem [1].

The USDH initiative will be spearheaded by Paxos Labs, a newly established division within the firm, which recently acquired Molecular Labs, the infrastructure developer behind key Hyperliquid components including LHYPE and WHLP. This strategic move is intended to deepen Paxos’ understanding of Hyperliquid’s onchain financial architecture and strengthen its commitment to supporting the platform’s growth [1].

USDH will be deployed across both HyperEVM and HyperCore chains, two of the primary blockchain infrastructures underpinning the Hyperliquid ecosystem. The stablecoin is intended to serve as a bridge between Hyperliquid and institutional and fintech partners, leveraging Paxos’ extensive global infrastructure, including operations in the U.S., EU, Singapore, Abu Dhabi, and Latin America. The firm is already integrated with over 70 financial partners, a network that will be used to distribute USDH [1].

A key feature of the proposal is a built-in rewards mechanism. By channeling a majority of USDH’s yield into HYPE buybacks, Paxos aims to create a sustainable model that redistributes value back into the ecosystem. These distributions will target builders, validators, and users, further aligning incentives across the platform. In addition, Paxos plans to integrate HYPE into its broader brokerage infrastructure, which currently powers crypto services for major platforms such as

PayPal
and
MercadoLibre
[1].

Hyperliquid’s rapid rise in the decentralized perpetual futures market has been a significant driver behind the USDH initiative. As of the most recent data, Hyperliquid captured 70% of the market share in decentralized perpetual futures, generating over $106 million in revenue last month on nearly $400 billion in trading volume. This performance has positioned it as a leading player in the sector, outpacing other decentralized platforms such as

Uniswap
and PancakeSwap [1].

The proposal aligns with broader trends in the crypto industry, where stablecoins are increasingly being designed with governance, yield mechanisms, and compliance in mind. By anchoring USDH to the Hyperliquid ecosystem and embedding buyback functionality, Paxos is seeking to create a stablecoin that not only facilitates transactions but also reinforces long-term value accrual for stakeholders.

Source: [1] Paxos Proposes Stablecoin for Hyperliquid with HYPE (https://cointelegraph.com/news/paxos-proposes-usdh-stablecoin-for-hyperliquid)