Paxos Drops New Documentation in Push for Hyperliquid’s USDH Stablecoin Approval

Paxos just unleashed fresh documentation backing Hyperliquid's USDH stablecoin—and the timing couldn't be more strategic.

Behind the Scenes: The Lobbying Game

This isn’t just paperwork; it’s a power move. Paxos is positioning USDH as a fully-backed, regulatory-friendly contender in the stablecoin arena. No speculative fluff—just cold, hard reserve assurances.

Why It Matters

Stablecoins are the backbone of crypto liquidity. Another credible USD-pegged asset? That means deeper pools, smoother trades, and less reliance on the usual suspects. Traders win; centralized bottlenecks lose.

The Bigger Picture

Let’s be real—the world doesn’t need another half-baked stablecoin. But if Paxos is throwing its weight behind this, you better believe regulators are paying attention. Sometimes, the best innovation is just not screwing it up.

Final Take

More choice, more competition, less nonsense. Welcome to the next phase of crypto maturity—where even the 'stable' coins have to fight for their spot.

V2 comes with major upgrades

The new proposal will also offer a clear AF-first incentive reward structure with Paxos only earning once TVL milestones are reached. The revamped rewards are capped at 5% past $5B TVL, and all fees will be held in HYPE tokens and reinvested in growth and to its AF. The firm’s new framework will begin with an AF pledge of 20%, which increases based on TVL milestones.

As earlier reported by Cryptopolitan, the company’s previous proposal only showed the differentiated distribution that the Paxos network can deliver. The firm said that since then, it has focused on kickstarting its distribution efforts by partnering with PayPal to support the Hyperliquid ecosystem.

Paxos believes the global payment platform will bring immense scale to the Hyperliquid ecosystem. The payment firm processes over $1 trillion in TPV annually, with over 400 million users and 35 million merchants.

“We’re thrilled to have PayPal as a partner from day one of USDH issuance. Alongside our existing set of GENIUS-compliant reserve assets, we are adding PYUSD as an additional regulated, GENIUS-compliant reserve asset.”

–Bhau Kotecha, Co-Founder and CEO of Paxos Labs.

Kotecha said Paxos aims to drive differentiated distribution for the Hyperliquid ecosystem to expand access to billions of users worldwide. He also stated that the yield from the initiative will be reinvested in growth and in the AF.

V2 will also offer global scaling incentives, since it’s the only issuer positioned to legally issue stablecoins globally. The company said the initiative aims to ensure that USDH can scale globally and be fully compliant.

Paxos helps drive Hyperliquid’s global strategic initiatives

Paxos will add HYPE and USDH to its brokerage infrastructure, which powers the largest enterprises globally and allows users to purchase digital assets on their platforms. The firm believes the initiative will expand access to both HYPE and USDH globally and offer builder code access to the order FLOW brought in from distribution platforms.

Hyperliquid’s HIP-3 allows deployments of custom perpetual trading pairs, but Paxos still believes the company needs a strategy to scale quality asset listings. The stablecoin said it can attract differentiated demand and attract trading liquidity to make Hyperliquid the destination of choice for tokenized asset issuers looking for access to instant liquidity and active traders.

Paxos also plans to use its existing distribution network to onboard new users to the HyperEVM. The firm hopes the initiative will enable access to on-chain lending markets, collateralized loans, and a flurry of DeFi offerings on traditional platforms.

The stablecoin issuer also plans to build an Earn product on top of USDH that can be embedded into any consumer frontend using a simple API suite. The firm will also issue a suite of tokenized HLP products to support the growth of HIP-3 market deployers in their liquidity and internal financing efforts.

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