Leading stablecoin issuers Paxos, Frax Finance, and Agora, along with a new team called Native Markets, are competing for the chance to launch Hyperliquid’s new USDH stablecoin.
Crypto trading platform Hyperliquid is preparing to launch its own stablecoin, USDH, and has invited companies to compete for the right to issue it. The final decision will be made by a validator vote on September 14, 2025, after proposals close on September 10.
Hyperliquid relies heavily on USDC, with nearly $5.5 billion in deposits on its platform, approximately 7.5% of all USDC in circulation. By launching USDH, Hyperliquid wants a stablecoin that is tailored for its own ecosystem, compliant with regulations, and less dependent on outside issuers like Circle.
So far, these four groups have officially submitted proposals to issue Hyperliquid’s new USDH stablecoin, including, Ethena Labs, one of the world’s largest stablecoin issuers, is also expected to submit a proposal soon.
Paxos Proposes USDH with Zero-Fee Swap
Paxos, a well-known stablecoin issuer since 2018, will have its newly formed Paxos Labs team manage USDH. It has issued tokens for PayPal and Binance in the past. For USDH, Paxos plans to use its new division, Paxos Labs, launched earlier this year.
Paxos’s proposal promises strong compliance with both EU and US rules. It says users can switch from USDC to USDH without any fees, making the transition smooth.
In the proposal, Paxos also offers to give back 95% of the interest earnings to Hyperliquid, mainly through HYPE token buybacks and rewards for the community. Additionally, it would connect the HYPE token to Paxos’s global trading network, which already powers crypto services for PayPal, Venmo, Nubank, MercadoLibre, and others.
Paxos Labs Co-Founder Jun Kim also promised in the Discord message, “The first step would be to seed AMM liquidity between USDC <> USDH and potentially other tokens to bootstrap direct onchain liquidity.”
Frax Proposes Yield-Bearing USDH
Frax is pitching USDH as a yield-bearing stablecoin by linking it directly to its existing frxUSD, which is backed by BlackRock’s onchain Treasury fund (BUIDL).
A key point in Frax’s offer is that 100% of the Treasury yield, about 4% APR, would go straight to Hyperliquid users with zero fees taken by Frax. Based on Hyperliquid’s current deposits, that could mean around $220 million in annual yield revenue.
Frax described the proposal as “community-first”, making it clear they don’t want control over USDH, only to supply the stablecoin infrastructure. They also hinted at future features such as card spending options, giving USDH more real-world usability.
Agora Proposes Native USDH
Agora, which recently raised $50 million and launched a white-label stablecoin, has submitted a bid for USDH. Its current token, AUSD, is worth about $130 million and is fully backed by cash and U.S. Treasuries held by State Street and VanEck.
For USDH, Agora formed a coalition with Rain for card payments and on/off-ramps, and LayerZero for cross-chain transfers. It pledged 100% of net revenue (minus custodian fees) to Hyperliquid, either for the Assistance Fund or HYPE buybacks.
CEO Nick van Eck said, “USDH will be a Hyperliquid-native stablecoin, not a redeployed token from another ecosystem.” He also noted Agora is a neutral issuer with no brokerage or network of its own.
Native Markets Proposes USDH
The first proposal came from Native Markets, a team built within Hyperliquid itself. It includes well-known figures like MC Lader, former COO of Uniswap Labs, and researcher Anish Agnihotri.
Native Markets plans to issue USDH through Bridge, a Stripe-acquired company, and share part of the reserve profits with Hyperliquid’s Assistance Fund. Their proposal is GENIUS-compliant and focuses on making the stablecoin secure, simple, and accessible. Author Max Fiege said the aim is a stablecoin that combines security, accessibility, and ease of use, backed by strong innovation.
Some Hyperliquid users pointed out a possible conflict of interest because Stripe is also developing other blockchain projects, like Tempo L1 and Privy.
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