Hyperliquid, a high-performance decentralized exchange powered by its own Layer-1 blockchain, has formally kicked off the launch process for a native U.S. dollar–pegged stablecoin, to be known by the ticker USDH. The protocol has booked the ticker and announced a validator-led, on-chain governance vote to select the team that will deploy USDH.

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Stablecoin issuance has become an increasingly specialized industry, no longer limited to a handful of general-purpose platforms. What started with pioneers like Tether and Circle has expanded into a field where regulated infrastructure providers, such as Paxos, focus solely on the compliant minting and redemption of dollar-backed tokens for partners like PayPal and Binance.

—marking a strategically important shift away from reliance on external stablecoins such as USDC.CoinDeskThe Defiant

Founded in 2023, Hyperliquid emerged as a Layer-1 blockchain purpose-built for high-frequency DeFi, offering ultra-low latency and throughput that rivals centralized systems.

Its native DEX was among the first successful attempts to bring CEX-style functionality on-chain, introducing a fully on-chain central limit order book (CLOB) with deep liquidity, transparency, advanced order types, and perpetuals trading.

Key to this success was the strategic choice to launch on its own L1 powered by HyperBFT, a consensus mechanism achieving sub-second finality and up to 200,000 orders per second. A zero gas fee model for trading, paired with highly competitive maker/taker fees, further cemented Hyperliquid’s position as one of the most advanced DeFi-native exchanges.

Hyperliquid's USDC Season

Stablecoins are the lifeblood of Hyperliquid, and USDC is by far the dominant asset in this ecosystem, accounting for roughly 95% of all stablecoin liquidity on the chain. This concentration reflects Hyperliquid’s appeal to institutional and professional traders, who value USDC’s regulated backing and reliable redemption.

The reliance on USDC became even more significant with the recent integration of native USDC and Circle’s Cross-Chain Transfer Protocol — an upgrade that eliminates wrapped assets and enables seamless transfers of USDC across supported blockchains. This development tied Hyperliquid more closely into USDC's broader multi-chain stablecoin infrastructure.

However, Hyperliquid’s heavy reliance on USDC exposes it to the stablecoin’s inherent risks. With nearly all liquidity and trading activity denominated in USDC, the ecosystem remains vulnerable to redemption shocks or freezes — whether from technical disruptions, regulatory action, or shifts in Circle’s policies.

Most importantly, through the issuance of USDH, Hyperliquid would gain control over reserve yield — channeling those earnings back into its own ecosystem rather than letting them flow off-platform. This approach taps into one of the fastest-developing business niches in the industry, where stablecoin issuers evolve from passive reserve managers into active drivers of ecosystem growth.

Hyperliquid’s exploration of a native stablecoin reflects both the project’s maturity and the team’s growing confidence. By developing a complementary asset, the protocol enters a highly competitive space, and — true to its culture — is applying a unique approach.

Community-Led Stablecoin Tech Selection

Instead of deciding unilaterally, Hyperliquid has delegated the choice of who will implement USDH to its validator community through an on-chain governance vote. This process highlights the project’s commitment to decentralization and transparency.

Multiple candidates have already sumbitted proposals including:

  • Paxos known for its compliance first technology. Their plan includes also channeling 95% of reserve yield into HYPE token buybacks and leveraging their relationships with financial and regulatory partners.
  • Frax with background in algorithmic stablecoin technology, offering a “community-first” model that promises 100% of treasury yield passed through to users with zero take, positioning itself as a user-benefit–oriented provider.
  • A coalition involving Agora and MoonPay has also emerged, proposing a neutral, Hyper-native approach — emphasizing alignment and institutional reach, with public opposition to any potential conflicts involving Stripe.
  • Ethena is confirmed to have submitted a proposal to integrate its stablecoin solution with Hyperliquid's infrastructure, focusing on hedging flows and liquidity.

Each candidate brings a distinct philosophy — from regulated, yield-bearing designs to market-based synthetic models — giving the community a real choice in shaping how USDH will function.

The validator-led selection process is already underway, with key dates set:

  • September 10, 2025 — proposal deadline for candidate teams.
  • September 11, 2025 — validators finalize declarations of support.
  • September 14, 2025 (10:00–11:00 UTC) — the official on-chain governance vote takes place.

These steps form part of Hyperliquid’s broader upgrade cycle, which includes not only the launch of USDH but also ongoing improvements to trading infrastructure and cross-chain interoperability through native USDC + CCTP V2 integration.

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