Ethena Labs Abandons USDH Stablecoin Bid Amid Ecosystem Turmoil

Ethena Labs pulls the plug on USDH stablecoin ambitions—citing ecosystem instability as the dealbreaker.

Behind the Scenes: What Went Wrong?

Internal assessments flagged mounting risks in the current DeFi landscape. The team hit pause rather than force a shaky product into volatile markets—smart move, honestly.

Stablecoin Space: Still a Mess?

Another day, another stablecoin project folding. Who’s surprised? Regulatory haze and trust deficits keep haunting this corner of crypto—classic finance drama with extra steps.

Bottom Line: Sometimes walking away is the boldest play. Ethena’s retreat might just be a strategic regroup—or another cautionary tale in the relentless stablecoin grind.

TLDR

• Ethena Labs has officially withdrawn its bid to manage Hyperliquid’s USDH stablecoin following community and validator feedback.
• The feedback highlighted concerns over Ethena’s positioning within the ecosystem and its broader ambitions beyond USDH.
• Guy Young confirmed Ethena’s decision to step aside rather than contest the arguments raised by the community.
• Native Market has gained significant momentum after Ethena’s withdrawal and is now the leading contender for the USDH stablecoin.
• Ethena Labs plans to focus on developing other products such as synthetic dollars and reward-bearing collateral for Hyperliquid.

Ethena Labs has officially withdrawn its bid to manage Hyperliquid’s USDH stablecoin after receiving feedback from validators and community members. The company, led by Guy Young, acknowledged concerns regarding its positioning within the broader ecosystem. Ethena’s decision to withdraw comes after debates surrounding its role and ambitions beyond USDH.

Reasons Behind Ethena’s Withdrawal from USDH Stablecoin Bid

Ethena Labs chose to step aside after extensive feedback raised critical points. The community and validators questioned Ethena’s involvement, noting that the company was not a native Hyperliquid team. They also pointed out that Ethena operates multiple products unrelated to USDH and that its future goals extend beyond a partnership with Hyperliquid.

Guy Young addressed the concerns by stating that Ethena would not contest the arguments raised by the community. He emphasized that the feedback from validators made it clear that Ethena should reconsider its involvement. Despite stepping away, Young assured that the company would continue to support Hyperliquid in other capacities.

The last few days have been incredible to witness. I've never seen a community rally around and engage with passion like this before.

Following direct discussions with individuals in the community and validators we have taken onboard some of the concerns, namely:

-Ethena is not…

— G | Ethena (@gdog97_) September 11, 2025

With Ethena Labs pulling out, the spotlight shifts to Native Market, which has gained significant traction. The Native Market team has emerged as the favorite to manage USDH. Guy Young publicly congratulated the team, acknowledging their commitment to Hyperliquid’s community-driven approach.

Young expressed his support for Native Market, defending them against prior criticism. He emphasized that success in the project depends on community engagement, not financial backing or pedigree.

Young stated, “No one cares about how big you are or your resources; it’s a level playing field.”

Ethena Labs Looks Ahead with Broader Plans

While Ethena Labs has withdrawn from the USDH stablecoin bid, its broader plans remain intact. The company will focus on developing synthetic dollars (hUSDe) and other financial products for Hyperliquid. Ethena also intends to expand into markets such as reward-bearing collateral, prime broking, and perpetual equity swaps.

Guy Young stressed that Ethena WOULD continue to push for innovation, emphasizing that the company’s long-term strategy remains unchanged. Ethena Labs aims to outcompete others in product development and remains committed to Hyperliquid’s vision.