Solana News Today: Lion Group's $500M Bet Redefines DeFi's Stablecoin Power Play

Lion Group, a publicly listed Singapore-based trading platform, is significantly expanding its exposure to altcoins by allocating over $500 million to a treasury focused on Hyperliquid (HYPE) tokens. This move, backed by ATW Partners, marks a broader institutional shift toward blockchain-native assets beyond Bitcoin. The firm, which has already committed $10.6 million to HYPE, aims to create the world’s largest HYPE reserve, with BitGo managing the custody of the assets. CEO Wilson Wang emphasized that HYPE aligns closely with the company’s crypto derivatives business and blockchain-based trading protocols. This strategy includes diversification into fast-growing DeFi ecosystems like Solana and Sui.

The decision comes as the Hyperliquid (HYPE) token reaches a new all-time high. Whale accumulation has driven the token’s price, testing key resistance levels and signaling strong institutional and retail interest in the asset. The HYPE token’s trading volume has surged recently, with a 173.50% increase in the last 24 hours, reaching $542.59 million. The token’s market capitalization now stands at approximately $123.66 billion, ranking it among the top 20 cryptocurrencies by market cap. Its fully diluted valuation (FDV) is $456.62 billion, assuming all 1 billion HYPE tokens are in circulation.

Hyperliquid itself is undergoing a major transformation through the proposed USDH stablecoin initiative. The decentralized exchange, which controls nearly 75% of the DeFi perpetuals market, is launching an open on-chain auction to select a stablecoin issuer for USDH. This move is designed to reduce its reliance on external stablecoins like Circle’s USDC and Tether’s USDT, which currently account for roughly 95% of assets on the platform. The auction is structured as a transparent procurement process, where issuers must disclose their compliance strategies, infrastructure, and yield-sharing plans.

Several major players have submitted proposals to become the USDH issuer. Paxos, a compliance-focused firm with experience in stablecoin issuance, has pledged to return 95% of the interest earned on USDH reserves to HYPE buybacks. Frax Finance, a DeFi-native protocol, has proposed a model where USDH is backed 1:1 by its frxUSD stablecoin and managed by major asset managers like BlackRock. Agora, an institutional-backed stablecoin issuer, has also entered the competition, offering full yield redirection to HYPE buybacks and partnerships with entities like MoonPay and EtherFi. These proposals are expected to influence the validator vote, which will determine the winner of the USDH issuance contract.

The USDH initiative represents a strategic shift in how DeFi platforms negotiate with centralized issuers. By enabling a transparent, competitive auction for stablecoin issuance, Hyperliquid is redefining governance structures within the DeFi space. The auction process aligns closely with traditional finance practices, where contracts are awarded based on yield, compliance, and liquidity considerations. This approach allows the Hyperliquid community to have greater control over how billions in reserves are managed and distributed.

Lion Group’s growing exposure to HYPE comes at a pivotal moment for the token. The platform’s USDH initiative, combined with institutional interest from firms like Lion and others, is reshaping the DeFi landscape. As validators prepare to cast their votes on the USDH issuer, the outcome will have significant implications for Hyperliquid’s ecosystem, as well as for Circle and other major stablecoin providers. The broader crypto market is closely watching to see how this model of decentralized governance and yield distribution evolves.

Source: [1] Circle's Revenue At Risk As Hyperliquid Opens Auction For USDH (https://www.forbes.com/sites/tomerniv/2025/09/08/circles-revenue-at-risk-as-hyperliquid-opens-auction-for-usdh/) [2] Hyperliquid Price: HYPE Live Price Chart, Market Cap & (https://www.coingecko.com/en/coins/hyperliquid) [3] Meet the bidders vying to build Hyperliquid's USDH stablecoin (https://finance.yahoo.com/news/meet-bidders-vying-build-hyperliquid-152805117.html) [4] Lion Group Bets Big on Altcoins With $500M Hyperliquid Strategy (https://cryptodnes.bg/en/lion-group-bets-big-on-altcoins-with-500m-hyperliquid-strategy/) [5] Publicly listed Lion Group plans to exchange all of its existing SOL and SUI assets for HYPE (https://www.mexc.co/hi-IN/news/publicly-listed-lion-group-plans-to-exchange-all-of-its-existing-sol-and-sui-assets-for-hype/89108)