Sky Enters Fierce Bidding War to Launch Hyperliquid’s USDH Stablecoin

Another major player jumps into the stablecoin arena—Sky just threw its hat in the ring for Hyperliquid's USDH launch.

Why the rush? Because everyone wants a piece of the next big dollar-pegged token.

Sky's move signals growing confidence in decentralized finance, even as traditional banks scramble to keep up. Hyperliquid’s USDH could shake up liquidity markets—if it delivers on its promises.

Let's be real: when's the last time a stablecoin launch didn’t come with a side of hype and a pinch of regulatory risk?

TLDR

• Sky offers 4.85% yield on USDH, surpassing U.S. Treasury rates.
• $2.2B in instant USDC liquidity supports Sky’s USDH proposal.
• Sky commits $25M to build Hyperliquid-native DeFi ecosystem.
• Validator vote on Sept 14 will decide USDH stablecoin issuer.

A new phase in stablecoin competition has begun as Sky, formerly MakerDAO, enters the race to launch Hyperliquid’s upcoming USDH stablecoin. With five leading crypto firms now bidding, the contest has drawn wide attention across the industry. Hyperliquid’s validator vote on September 14 will decide the winner, with billions in revenue and stablecoin control at stake.

Sky Submits Yield-Focused Proposal to Hyperliquid

Sky’s proposal includes a 4.85% yield on USDH held on Hyperliquid, which is above the current U.S. Treasury bill rate. According to co-founder Rune Christensen, this offer could make USDH attractive to both individual and institutional users. The yield will be supported by Sky’s existing infrastructure that already handles $12.5 billion in stablecoins through USDS and DAI.

The protocol has also committed to $2.2 billion in instant offchain USDC redemption liquidity, using the same systems that support current stablecoin operations. This includes the Peg Stability Module and integrations with platforms like spark.fi, sky.money, and defisaver.com. The yield and liquidity offerings aim to position USDH as a stable and profitable option for Hyperliquid users.

Sky plans to allow users to convert between USDH and USDS tokens. USDS currently offers a 4.75% yield through the Sky Savings Rate. This setup may help users move funds across stablecoins while maintaining returns. Sky’s use of LayerZero will support multichain deployment and cross-chain usage of USDH.

Governance Vote Set to Decide Between Five Major Proposals

Hyperliquid invited bids for a compliant and platform-aligned stablecoin, aiming to reduce reliance on USDC. Currently, 95% of Hyperliquid’s $5.6 billion stablecoin supply is in USDC. Hyperliquid will hold a validator vote on September 14 to decide which proposal to adopt. Community validators must declare their choice by September 11, allowing users to align their vote by staking with preferred validators.

Sky joins Paxos, Frax Finance, Agora, and Native Markets in the competition. Each company has offered different revenue-sharing and technical approaches. Paxos has promised 95% of USDH earnings for HYPE token buybacks, while Agora proposed full revenue distribution for the same purpose. Frax offered to back USDH with frxUSD, its native stablecoin. Native Markets introduced a proposal centered around Stripe’s Bridge system.

The Hyperliquid Foundation has stated its own validators will abstain from voting. Instead, they will align with whichever team receives majority support from independent validators. This structure was designed to prevent centralized influence while allowing the platform’s community to decide USDH’s future.

Sky Offers Ecosystem Investment and Buyback Migration

Sky’s proposal includes a $25 million fund to support a new initiative called Hyperliquid Genesis Star. The goal is to drive DeFi growth directly on Hyperliquid through token farming and liquidity tools. The model follows the structure of Spark, which reached over $1.2 billion in total value locked.

Sky also plans to shift its buyback system, currently on Uniswap, to Hyperliquid. The protocol is already using $36 million annually to buy SKY tokens and intends to raise this to $150 million. Christensen said Sky may bring its $250 million annual buyback program entirely onto Hyperliquid. This WOULD increase platform usage and help integrate Sky more deeply into Hyperliquid’s ecosystem.

Sky emphasized that its infrastructure has remained stable through multiple crypto cycles, operating for over seven years without stablecoin holder losses. The proposal also included compliance options with U.S. laws such as the GENIUS Act, offering legal flexibility as regulations develop.

Hyperliquid’s recent trading volume and revenue growth have positioned it as the largest decentralized perpetuals exchange. With $106 million in monthly revenue and $5.55 billion in total value locked, the platform’s next stablecoin partner is expected to handle high volumes from day one.