Ethena Withdraws from $5.5 Billion Hyperliquid Stablecoin Race

Ethena Labs has exited Hyperliquid’s USDH stablecoin bidding contest, citing community concerns over its fit within the ecosystem. Founder Guy Young emphasized a collaborative approach, opting to step aside rather than challenge the feedback. The MOVE leaves Native Markets as the frontrunner, backed by major validators, in a race that could reshape the future of decentralized finance.

Hyperliquid’s dominance in crypto trading is undeniable. With $5.5 billion in USDC deposits—7.5% of the stablecoin’s circulating supply—the platform commands nearly 80% of decentralized perpetual futures trading volume. August alone saw $106 million in revenue amid $400 billion in trades. The USDH initiative aims to reduce reliance on bridged assets like USDC, which currently comprises 95% of Hyperliquid’s stablecoin supply.

The stakes are staggering. The winning bidder stands to redirect $220 million in annual Treasury yields from external issuers like Circle back into the Hyperliquid ecosystem. This capital could fuel HYPE token buybacks, further consolidating the platform’s position as a DeFi powerhouse.