Hyperliquid’s USDH Race Reveals the High-Stakes Game Behind Stablecoins

Hyperliquid is disrupting the crypto landscape with an audacious strategy: launching its native stablecoin, USDH, through a community-driven issuer selection process. The move has ignited fierce competition among major stablecoin players, with $5.6 billion in deposits and potential annual revenue of $220 million at stake.

The exchange currently routes reserves through USDC, forfeiting yield to external issuers. USDH would allow Hyperliquid to capture these returns—projected at $220 million annually based on 4% Treasury yields—while enhancing spot trading liquidity and fee structures. This revenue potential dwarfs the platform’s existing HLP vault earnings.

An unconventional public bidding war has emerged, featuring contenders like Paxos (bringing NYDFS regulatory credentials), FRAX Finance, Agora, Native Markets, and Sky (the rebranded MakerDAO entity). The validator vote outcome could reshape stablecoin dynamics across decentralized finance.