Hyperliquid’s Native Stablecoin Battle: The Rise of USDH

Hyperliquid is releasing the long-reserved USDH ticker via validator vote, sparking fierce competition among stablecoin issuers like Paxos, Frax, and Agora.

The outcome will decide who controls distribution on Hyperliquid’s $400B monthly trading engine, with proposals ranging from full yield rebates to deep ecosystem integrations.

Circle’s USDC faces growing pressure as Hyperliquid-native USDH could generate $220M annually, positioning HYPE and the ecosystem for massive growth.

Hyperliquid just delivered another monster month. In August, the derivatives-focused DEX pulled in $106 million in revenue, up 23% from July, with nearly $400 billion in contract volume. That gave the platform about 70% of the decentralized perp market — cementing its status as crypto’s current cash cow. And as the team pushes its “high-performance Layer 1” narrative, a new front is opening: stablecoins.

On September 5, Hyperliquid said it would release the long-reserved ticker USDH through an on-chain validator vote. The vote, which mirrors the network’s delisting process, will decide which team can deploy a native, Hyperliquid-first dollar stablecoin. Winning bidders still need to go through the usual gas auction for spot deployment. The announcement immediately triggered a scramble among top issuers — each pitching their own USDH plan.

BIG NAMES LINE UP FOR USDH

The Discord rollout laid out three points. First, Hyperliquid will slash spot market fees and rebates by 80% to boost liquidity. Second, USDH will be assigned via validator vote, with proposals submitted in a new forum sub-channel. And third, spot quote assets are set to become permissionless in future upgrades.

The schedule is tight: proposals by September 10, validator picks by September 11, and final votes on September 14–15 UTC.

By now, five contenders have entered the race. Paxos, Frax, and Agora headline the list, joined by Native Markets led by Max Fiege and the Konelia team. Each claims a different edge:

Paxos is leaning on its regulatory track record and has already signed up partners inside Hyperliquid, from FalconX to HyperLend and Pendle.

Frax highlights its spotless security history while stressing decentralization — even promising to recycle collateral yields back into the system.

Agora, backed by asset manager VanEck, points to integrations with Rain, LayerZero, and EtherFi, while taking swipes at Paxos for conflicts of interest.

Native Markets says it will mint USDH directly on HyperEVM, donate reserve yields to relief funds, and leverage Bridge (a Stripe affiliate) for compliance. Max Fiege’s strong community ties have earned vocal support.

Konelia floated a plan tied to short-term Treasuries and MEV protection, but most in the community shrugged it off.

For now, Paxos and Native Markets seem to have the early momentum.

COMMUNITY BACKLASH AND CIRCLE’S COUNTERMOVE

The launch isn’t without drama.

Liquid staking project Kinetiq said it would abstain by delegating all stake to foundation validators.

Stablecoin project Hyperstable blasted the process as unfair, claiming some teams had advance notice. They argued USDH should remain blacklisted.

Frax drew flak for its past ties to Terra’s UST, though defenders noted the connection was limited to a Curve pool.

Meanwhile, the ecosystem’s current main stablecoin — USDC — is feeling the heat. Circle CEO Jeremy Allaire warned users not to get distracted by hype, insisting USDC’s liquidity and cross-chain reach would keep it on top. But Circle’s promised native USDC launch on Hyperliquid has yet to happen, and USDH has stolen the spotlight. Rival issuer Ethena even joked it had sent Circle a USDH proposal, only to be ignored.

WHY THE USDH FIGHT MATTERS

The battle comes as U.S. lawmakers prepare to finalize the GENIUS Act on stablecoin oversight. For issuers, securing USDH isn’t just about brand recognition — it’s about locking in distribution on one of crypto’s biggest trading engines.

Arthur Hayes has long argued that stablecoin success hinges on distribution, not yield. Frax founder Sam Kazemian put it bluntly: the real value lies in deep integration with Hyperliquid’s liquidity. That’s why most issuers are pledging to give back 100% of yields. Paxos, for instance, wants to channel 95% of USDH reserves into HYPE token buybacks for users, validators, and partner protocols.

Think of it this way: Hyperliquid is the retail giant. Issuers like Paxos, Agora, and Frax are bottlers fighting for shelf space. Whoever controls USDH will control a key piece of distribution.

For Hyperliquid’s community, the question is simpler: will USDH revenues flow back into HYPE, and how will it strengthen the ecosystem? Estimates suggest USDH could generate $220 million in annual income. Looking ahead, Hayes predicts the stablecoin market will hit $10 trillion by 2028. If Hyperliquid can carve out its share, HYPE’s upside could be enormous.

〈Hyperliquid’s Native Stablecoin Battle: The Rise of USDH〉這篇文章最早發佈於《CoinRank》。