Hyperliquid: The Biggest Crypto Projects Battling for the USDH Stablecoin
Hyperliquid's USDH stablecoin war heats up as DeFi giants clash for dominance.
Major protocols scramble for control—liquidity wars intensify across chains.
Yield strategies get aggressive while traders hunt for the slightest arbitrage edge.
Stablecoin supremacy isn't just about volume—it's about who captures the entire stack.
Meanwhile, traditional finance still can't decide if stablecoins are the future or just fancy IOUs.
Native Markets
Founded specifically to “build the best stablecoin” for Hyperliquid, according to its Substack, Native Markets started work “months ago” and informed Hyperliquid Labs of its plans, inquiring about the USDH ticker.
It proposes to create a stablecoin that will be GENIUS Act-compliant, referring to the landmark stablecoin legislation in the U.S. that President Donald TRUMP recently signed into law. It plans for Bridge—a platform acquired by payments giant Stripe in 2024—to manage its reserves.
Native Markets says it will contribute half of the yield generated from those reserves towards USDH growth partnerships and the other half to the Assistance Fund, a protocol-driven buy back fund.
“We are prepared to launch a community-aligned stablecoin within days,” Native Markets wrote on Substack on Monday. Already, a top Hyperliquid validator called CMI has stepped forward and shown support for the proposal.
At the moment, market sentiment is placing Native Markets as the overwhelming favorite to win the bidding for the USDH ticker, though several leading figures in the crypto industry have come forward to suggest the organization has received an unfair advantage.
Hyperliquid currently loses >$200m a year to firms who treat it as an afterthought at best.
I'm co-founding Native Markets to reclaim this value leakage for the ecosystem and to kickstart Hyperliquid's next chapter. pic.twitter.com/oU6RYXE4E9
— max.hl (@fiege_max) September 8, 2025
Ethena x BlackRock
Ethena notably entered the race on Tuesday, with backing from the biggest asset manager in the world, BlackRock. Ethena is the issuer of the third-largest stablecoin by market cap, USDE, per CoinGecko, behind only industry giants Tether and Circle.
The proposal suggests that Ethena’s USDtb, which is the seventh-largest stablecoin, would back USDH, giving it indirect collateralization from BlackRock’s BUIDL fund—a tokenized money market fund. BlackRock’s head of digital assets, Robert Mitchnick, also provided a statement claiming the token would be “uniquely positioned to offer institutional-grade cash management.”
On top of this, Ethena says 95% of revenue generated by its USDH reserves will be given to the Assistance Fund or used to purchase HYPE, the native token of the Hyperliquid network.
It also suggests that Ethena would cover all transaction costs associated with making USDH the premier stablecoin for Hyperliquid—for example, the costs involved in denominating trading pairs on Hyperliquid in USDH instead of USDC.
Paxos
Established stablecoin company Paxos—issuer of PAX Gold, Global Dollar, and more—is also very much in the mix.
Paxos’ proposal not only claims its token would be GENIUS-compliant but also adhere to global regulations, including Europe’s MiCA. It also proposes fiat onramps via SWIFT, ACH, and wire transfers, as well as plans to enable real-world payments for USDH. Plus, it would look to support Hyperliquid’s token on Paxos’ brokerage platform, which is used by PayPal, Venmo, and more.
Finally, 95% of interest, not revenue, from the reserves backing USDH will be used to purchase HYPE and redistribute it to applications and validators.
We've spent the last three days listening to the @HyperliquidX community, absorbed every concern and doubled down.
V2 of our proposal is simple: @Paxos unlocks Hyperliquid at global scale 🌏
— bhau (@bhau___) September 10, 2025
Sky (aka MakerDAO)
Ethereum DeFi giant Sky, formerly known as MakerDAO, entered the USDH race on Monday.
Sky is the issuer of the fourth-largest stablecoin by market cap, USDS, formerly known as DAI—which remains the largest decentralized stablecoin on the market.
Sky’s proposal differs from the pack, suggesting USDH be natively multichain (that is, available on various blockchain networks simultaneously), powered by LayerZero, and flexes its security track record and risk management.
Sky also says it will deploy part of its balance sheet into Hyperliquid, start buying HYPE with its profits, and grant a 4.85% return on USDH to the Hyperliquid community.
USDH powered by Sky.
• 4.85% rewards on all USDH on Hyperliquid
• 2.2B USDC in instant redemption liquidity
• $8B+ Sky balance sheet ready to deploy
• Backed by Sky’s 7-year track record
Read the proposal by @RuneKek ↓ https://t.co/WYkbHG9Bbc
— Sky (@SkyEcosystem) September 8, 2025
Agora
Agora, issuers of AUSD, the 29th largest stablecoin by market cap, have directly called out Native Market’s reliance on Stripe, pointing to “clear conflicts” as Stripe builds out its own Tempo layer-1 network—suggesting that Stripe would rather push users onto Tempo than Hyperliquid.
Agora proposes to take full control of the stablecoin issuance itself, boasting VanEck as its asset manager. It says it will share 100% of net revenue with the Assistance Fund or buy back HYPE, and like the rest, promises to be GENIUS-compliant.
“We strongly urge caution against the utilization of Stripe (Bridge) as an issuer,” Nick van Eck, co-founder of Agora, wrote. “Running an institutional-grade, liquid stablecoin, at global scale is hard. We strongly urge the community to choose experienced partners that are set up for the long-term success of this initiative.”
Proposal: Agora stablecoin infrastructure to power USDH with a coalition of best-in-class providers.
Introduction
If Hyperliquid relinquishes their canonical stablecoin to Stripe, a vertically integrated issuer with clear conflicts, what are we all even doing?
Summary
-…
— Nick van Eck (@Nick_van_Eck) September 7, 2025
Frax Finance
A mysterious proposal by Frax Finance suggests a “Frax-led alliance with a federally regulated U.S. bank issuer” to issue USDH. However, due to the short window and the legal implications, the proposal is unable to disclose the issuer’s name.
That said, the proposal says that USDH will be backed one-for-one with U.S. treasuries via tokenized funds, will be GENIUS-compliant, and with the entire treasury yield returned to Hyperliquid in some way.
Others
There are many more proposals in the USDH hunt from lesser-known entities.
One, for example, suggests that the USDH ticker should be burned to foster a true free-market environment. Another, very obviously a joke, is written by someone pretending to be the Hyperliquid co-founder and CEO, Jeff Yan, intentionally misspelling words in the Boden meme style and stating that “chart make zig-zag.”
The other, more serious proposals include one from OpenEden, which will cycle 100% of its fees into buying HYPE and distributing it to network validators.
To many, USDH mania has been the most exciting that on-chain governance has been in a long time. It all builds up to Sunday’s main event when Hyperliquid validators make their final votes.
