Hyperliquid USDH Stablecoin Launches With $8.8M Trading Volume

TLDR

• Hyperliquid’s USDH stablecoin went live Wednesday with $2 million in early trading volume on the USDH/USDC pair
• Native Markets won the rights to issue USDH through a validator vote on September 14 after a competitive bidding process
• The stablecoin is backed by cash and US Treasury securities, managed through Stripe’s Bridge tokenization platform
• USDH aims to reduce Hyperliquid’s reliance on external stablecoins like USDC, which makes up 90% of platform deposits
• The bidding process faced controversy, with critics claiming it appeared designed to favor Native Markets over larger competitors

Hyperliquid’s native stablecoin USDH launched Wednesday with over $2 million in early trading volume. The USDH/USDC trading pair reached 1.001 in its debut session.

The launch gives Hyperliquid its first dollar-pegged asset for traders to use as collateral across the network. USDH is minted on HyperEVM, Hyperliquid’s Ethereum-compatible execution layer.

Native Markets will manage the stablecoin and oversee potential billions in flows. The crypto startup is led by Hyperliquid investor Max Fiege, former Uniswap Labs president Mary-Catherine Lader, and blockchain researcher Anish Agnihotri.

The company secured issuance rights through a validator vote on September 14. They beat out proposals from established players including Paxos, Sky, Frax Finance, Agora, Curve, OpenEden, and Bitgo.

USDH is backed by cash and US Treasury equivalents. Native Markets will use Bridge, Stripe’s tokenization platform, to manage the reserves.

The stablecoin addresses Hyperliquid’s heavy reliance on external stablecoins. USDC currently accounts for over 90% of deposits on the platform.

Bidding Process Draws Criticism

The selection process began September 5 when Hyperliquid opened governance for the USDH ticker. Native Markets submitted their bid shortly after the announcement.

Multiple companies entered proposals over the following days. Ethena initially bid but later withdrew and endorsed Native Markets instead.

The process faced controversy from industry observers. Dragonfly managing partner Haseeb Qureshi argued it appeared tailored to favor Native Markets.

Qureshi claimed multiple bidders told him validators weren’t considering other options. He suggested Native Markets had advance notice because their proposal came out immediately after the announcement.

He also questioned whether a “brand new startup” had the track record to justify winning over larger, established companies. Native Markets still won with over two-thirds of validator votes.

Revenue Model and Competition

USDH follows a 50-50 revenue split model. Half of reserve income funds HYPE token buybacks while the other half supports ecosystem development.

This approach aims to keep yield within Hyperliquid’s ecosystem rather than flowing to external stablecoin issuers. The strategy could help retain liquidity on the platform.

Hyperliquid faces growing competition in the perpetuals trading space. Aster, a decentralized exchange on BNB Chain, recorded nearly $30 billion in daily volume Wednesday.

This compares to Hyperliquid’s $10 billion daily volume at the time. Hyperliquid’s market share has declined from 70% in May to about 35% currently.

HYPE token has dropped 7% over the past week according to CoinGecko data. The token launched through an airdrop in November 2024.

The USDH launch represents Hyperliquid’s first major governance decision since becoming a decentralized platform. Native Markets now manages what could become billions in stablecoin flows as the platform grows.

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