Hyperliquid's ambitious move to launch USDH, its native stablecoin, has ignited an intense competition among various entities vying for the right to issue the token. This pivotal decision has transformed the decentralized exchange's liquidity strategy, moving away from Circle's USDC and attracting a robust field of bidders, including established names and innovative newcomers, all seeking to capture a significant stake in this burgeoning market.
Native Markets Takes the Early Lead
In this high-stakes contest, Native Markets has emerged as the clear frontrunner, currently favored on Polymarket with high odds of securing the validator mandate. Formed specifically for this bid and led by Hyperliquid ecosystem investor Max Fiege, their proposal outlines a hybrid reserve model. This innovative approach would see off-chain assets managed by BlackRock, while on-chain reserves are handled through Superstate, leveraging Stripe's Bridge platform. Native Markets also pledged to share yield from reserve assets, dedicating half to HYPE token buybacks and the other half to USDH expansion. However, the proposal has faced scrutiny, with concerns raised about the long-term implications of relying on Stripe, particularly given its own blockchain ambitions.
Rivals Intensify Their Offers
Despite Native Markets' initial advantage, the competition remains fierce, with established players like Paxos, Ethena, and Agora refining their strategies. Paxos, a prominent regulated issuer, recently unveiled a significantly revised proposal centered on a strategic partnership with PayPal. This collaboration aims to embed USDH within PayPal and Venmo, list HYPE on PayPal’s fiat ramps, and inject a substantial $20 million in incentives into the Hyperliquid ecosystem. Paxos has also introduced strict revenue caps, assuring the community of its long-term alignment and emphasizing its unique ability to tap into PayPal's extensive user base and introduce a new institutional customer segment to Hyperliquid. The ongoing dialogue suggests validators are deeply engaged with all bidders, aiming to secure the best long-term option for the platform.
