Hyperliquid’s Stripe-Backed USDH Plan Sparks Major Community Revolt

Hyperliquid faces mounting backlash over its controversial USDH stablecoin proposal tied to Stripe integration—users aren't buying the corporate partnership hype.

Community Pushback Intensifies

Traders and liquidity providers blast the centralized approach, arguing it undermines DeFi's core ethos. The proposal—seen as a bid for mainstream adoption—instead triggers skepticism about who really benefits from traditional finance bridges.

Stripe's Role Under Fire

Critics question the need for Stripe's involvement when on-chain solutions exist. The move reeks of appeasing regulators rather than empowering users—another case of 'compliance innovation' that dilutes crypto's disruptive edge.

Finance Jab: Because nothing says decentralization like outsourcing trust to a payment processor that'll happily freeze your funds for compliance reasons.

Crowded field

Paxos has pitched 95% of reserve earnings into HYPE token buybacks, leaning on its decade-long track record as a regulated issuer. Frax offered a “community-first” model, passing through 100% of Treasury yield to users with zero take.

Agora’s bid emphasized neutrality and alignment, promising 100% of net revenue for HYPE buybacks or Hyperliquid’s Assistance Fund.

With Ethena hinting it may enter the race, the lineup of bidders could expand, adding another layer of complexity to an already crowded field.

Each proposal offers a different vision for how USDH should function: From Paxos’ regulatory-first approach to Frax’s user-yield model to Agora’s Hyper-native coalition backed by institutional custodians and consumer-facing payment rails.

Hyperliquid dominates the DeFi derivatives market, with nearly an 80% market share. Given the growth of the Hyperliquid ecosystem, the right to issue its native stablecoin WOULD be incredibly lucrative for whoever is awarded the contract.

Hyperliquid set Sept. 10 as the deadline for proposals — more are expected in the next 48 hours — and Sept. 14 as the date for the validator vote. The Hyperliquid Foundation also said that it will “effectively abstain,” leaving the decision to validators.