Hyperliquid USDH Vote Ends With Native Markets on Top

The rollout will begin with capped minting and redeeming trials before opening a USDH/USDC order book and eventually allowing uncapped transactions. While the decision is a big step for Hyperliquid, it also drew some criticism from the crypto community. Some people in the industry called the process unfair and suggested it favored Native Markets from the start. At the same time, Yala’s Bitcoin-backed stablecoin YU came under pressure after an attempted exploit led to a sharp depeg, dropping as low as $0.2046 before partially recovering. Despite assurances that all funds are still safe, YU still trades below its intended $1 peg at about $0.8667.

Native Markets Wins USDH Stablecoin Bid

Native Markets officially secured the USDH ticker for Hyperliquid’s upcoming dollar-pegged stablecoin. The decision followed a community vote, where Native Markets emerged as the clear frontrunner after prediction market odds spiked to nearly 100% on Polymarket when Ethena, another major contender, withdrew from the race late last week. The result sets the stage for Hyperliquid’s first-ever Improvement Proposal (HIP), through which Native Markets will soon launch USDH alongside an ERC-20 token on Ethereum.

According to Native Markets founder Max Fiege, the rollout will begin with a testing phase, where minting and redeeming transactions of up to $800 will be allowed for an initial group of users. After this limited trial, the USDH/USDC spot order book will open, followed by the full launch of uncapped mints and redeems. The main goal of the carefully staged rollout is to ensure stability and security as the new stablecoin enters the market.

On the other hand, the process that led to Native Markets’ victory caused a lot of debate in the crypto community. People in the industry criticized the selection process by suggesting it may have been less open than advertised. Dragonfly managing partner Haseeb Qureshi called the request-for-proposal process “a farce,” and claimed that validators showed little to no willingness to consider any bidders other than Native Markets. His comments fed into speculation that the outcome was actually predetermined, with even some framing it as evidence of behind-the-scenes dealmaking.

Others used the controversy to shed some light on the broader trends in the stablecoin sector. Mert Mumtaz, CEO of Helius, said that the competition proved how commoditized stablecoins have become. He predicted that in the future, exchanges may streamline the user experience by removing stablecoin tickers altogether, simply displaying “USD” on the front end while managing the backend swaps between stablecoins themselves.

Despite the heated competition and subsequent debate around USDH, the launch of the Hyperliquid’s stablecoin is a big step forward in its bid to establish a robust stablecoin presence in the market.

Yala’s Bitcoin Stablecoin YU Struggles

In other stablecoin news, Yala’s Bitcoin-backed stablecoin YU struggled to recover its dollar peg after an incident on Sunday that sent its value tumbling to $0.2046. The team described the event as an “attempted attack” and assured users that all funds remain safe, with Bitcoin reserves held either self-custodially or in vaults. 

Yala confirmed that no user assets were lost, though some product features have been paused as a precaution while the team investigates with security firm SlowMist and other partners. In the meantime, the Convert and Bridge functions of the protocol have been disabled to prevent even more instability, while other operations remain unaffected. 

Blockchain analytics firm Lookonchain reported that an attacker minted 120 million YU on Polygon, bridged a portion to Ethereum and Solana, and sold 7.71 million YU for 7.7 million USDC. The attacker then converted the funds into 1,501 ETH and dispersed them across multiple wallets. There are still large amounts of YU on Polygon, Ethereum, and Solana, which raised concerns about potential further disruptions.

YU is designed to maintain a $1 peg using overcollateralized Bitcoin reserves and grew to a $119 million market cap before the incident. However, its liquidity remains shallow, with only $340,000 in USDC available in its Ethereum pool. After crashing below $0.21, YU briefly rebounded as high as $0.917 but has since struggled to hold its value. At press time, the token was trading around $0.8667, still far from its intended peg.

YU’s price action over the past week (Source: CoinMarketCap)

The turmoil came as the broader stablecoin market edged toward a historic $300 billion milestone. According to market data, Tether’s USDT, Circle’s USDC, and Ethena Labs’ yield-bearing USDe are still the main drivers of growth, and Yala’s setback proved the challenges newer entrants face when it comes to securing trust and liquidity.