Multiple Firms Compete to Issue Hyperliquid USDH Stablecoin

Hyperliquid, the leading decentralized perpetual futures exchange, is launching its native stablecoin, USDH, to reduce reliance on external stablecoins like Circle's USDC and Tether's USDT. The protocol is holding a validator vote to select the issuer of USDH from multiple competitive proposals, with prominent bidders including Paxos, Frax Finance, Agora, and Native Markets. Paxos has proposed backing USDH with U.S. Treasury Bills and repurchase agreements, offering to allocate 95% of interest earned on reserves towards buybacks of Hyperliquid's native HYPE token, aiming for strong community alignment and compliance. Agora's proposal emphasizes a coalition-based infrastructure with institutional partners like State Street and VanEck, promising 100% revenue sharing to support HYPE buybacks and enhanced liquidity through LayerZero interoperability. Frax Finance and other bidders also present native issuance options, with community members highlighting the importance of issuer alignment and stewardship over mere institutional credentials. This initiative could redirect billions in yield currently supporting USDC back into Hyperliquid's ecosystem, potentially impacting Circle's revenue and reshaping stablecoin issuance dynamics within DeFi.