Paxos has updated its USDH stablecoin proposal with PayPal and Venmo integration, $20M incentives, and a revenue model tied to HYPE’s growth.
Paxos has just unveiled a revised proposal to issue the upcoming USDH stablecoin for Hyperliquid.
The update adds integration with PayPal and Venmo and gives the project access to one of the largest payment networks in the world.
Quick Details Of The Deal
Paxos is aiming to simplify access to defi and accelerate stablecoin adoption by connecting USDH to widely used consumer apps.
The company pointed out that the updated plan links its own success directly with Hyperliquid’s growth.
Paxos said it will only earn revenue once USDH achieves $1 billion in total value locked (TVL), and its share will remain capped at 5% even beyond $5 billion in TVL.
PayPal and Venmo integration expands USDH reach.
The most notable update in the proposal is PayPal’s commitment to back the Hyperliquid ecosystem.
PayPal plans to list Hyperliquid’s HYPE token and integrate USDH into its checkout system, while providing free on and off-ramps for users.
Venmo and Xoom (both of which are PayPal-owned services) will also integrate USDH. PayPal has pledged $20 million in incentives to support the Hyperliquid ecosystem, which could further drive user engagement and strengthen the token liquidity.
This partnership means that USDH could soon be accessible to hundreds of millions of PayPal and Venmo users. This could do much to bridge the gap between traditional payment services and defi.
Revenue model ties Paxos to Hyperliquid’s success.
Paxos has structured its revenue model to align with Hyperliquid’s performance. It will not take any fees until USDH breaks above $1 billion in TVL.
After that milestone, the company earns 1% of fees and will gradually scale to 5% once TVL reaches $5 billion.
Earnings that Paxos collects will be held in HYPE tokens. This will make sure that the value remains inside the ecosystem.
At early stages, up to 80% of collected funds will be reinvested into development. As TVL grows, that percentage will gradually decrease, with more funds directed to Hyperliquid’s Assistance Fund.
Global expansion backed by regulatory compliance
Paxos also pointed out its regulatory strength as a differentiator. The company operates under approval from the New York Department of Financial Services and has compliance measures in place to issue tokens in Europe under the MiCA framework.
USDH itself is expected to become the primary stablecoin within Hyperliquid. This means that it will replace USDC and USDT in trading pairs.
This move would reduce reliance on outside stablecoins and help keep more revenue within the Hyperliquid ecosystem.
USDH is built on HyperEVM and HyperCore, and is designed to deliver low-cost, fast transactions for both traders and developers.
Paxos also intends to launch an “Earn” product with USDH, which will give users a way to generate yield directly through consumer apps.
Market response to the Paxos proposal
The crypto community has responded positively to Paxos’ revised plan. Analysts see the PayPal integration as a step that could attract both retail and institutional users.
So far, the combination of regulatory compliance with mainstream payment rails means that USDH has the ability to challenge USDC and USDT’s dominance in the stablecoin market.
The validator vote will decide whether Paxos secures the role of issuer.
If successful, USDH could become one of the first stablecoins to combine traditional payment services with decentralised finance at scale.
Source: https://www.livebitcoinnews.com/paypal-opens-doors-for-usdh-with-paxos-deal-hype-listing-and-20m-incentive-pool/
