On September 5, Hyperliquid officially announced the upcoming launch of the "USDH" Ticker auction. This is a native stablecoin designed for the Hyperliquid ecosystem. Currently, several institutions such as Paxos, Ethena, Frax, Agora, and Native Markets have submitted proposals, vying for the issuance rights of USDH.

The election lineup includes both established compliant institutions and emerging DeFi projects. The intense competition is due to Hyperliquid's rapid rise as a new decentralized trading platform: its perpetual contract monthly trading volume has approached $400 billion, with August's monthly fee revenue reaching as high as $1.06 billion, accounting for approximately 70% of the decentralized perpetual market. Hyperliquid's native token, HYPE, also recently hit an all-time high. Related reading: "USDH Battle Begins, Everyone Envious of Stablecoin+Hyperliquid Concept"

Currently, the on-chain liquidity in Hyperliquid heavily relies on external stablecoins such as USDC, with a circulation size once reaching $5.7 billion, accounting for approximately 7.8% of the total USDC issuance. If USDH successfully lands, it means that potentially hundreds of millions of dollars in interest income per year will directly benefit the community. Therefore, whoever secures the issuance rights of USDH not only affects market share ownership but also determines the dominance over this substantial potential revenue. The final stablecoin issuance ownership will be revealed in the on-chain vote from 10:00 to 11:00 (UTC) on September 14. Who will prevail in this intense competition? BlockBeats will continue to monitor and provide real-time updates:

September 10

Probability of Paxos Winning in Hyperliquid Stablecoin USDH Auction Prediction Rises to 44% on September 10

On September 10, according to the Polymarket page, in the Hyperliquid stablecoin USDH auction battle, Native Markets' probability of winning dropped to 52%, Paxos' probability of winning rose to 42%, ranking second, and Ethena ranked third with a 8% probability of winning.

Dragonfly Partner Haseeb Claims Native Markets Favored by Validator Nodes in USDH Bid, Multiple Node Operators Refute

On September 10, Dragonfly Partner Haseeb stated in a post, "I heard from multiple bidders that validators were not interested in considering any bidders other than Native Markets. Native Markets' proposal was submitted almost immediately after the USDH RFP was announced, indicating that they were notified in advance. Others were busy utilizing the weekend to prepare their proposals. So, the entire USDH RFP was essentially tailored for Native Markets." In response to these remarks, Galaxy, an operator of Hyperliquid validators, and the CEO of Nansen both refuted in posts, stating, "Validator operator teams have put in significant effort to review proposals and communicate with bidders."

Hyperliquid: USDH Auction Proposal Submission Deadline Today at 18:00, Validator Voting to Start on the 14th at 18:00

On September 10, the Hyperliquid team announced that teams participating in the USDH auction must submit their proposals before 10:00 UTC on September 10; validators will publicly cast their votes by 10:00 UTC on September 11. Users can delegate their stake to a validator aligned with their own intentions before the start of validator voting at 10:00 UTC on September 14. Voting power is calculated based on the stake amount, with the Foundation effectively abstaining.

Hyperliquid Stablecoin USDH Auction Prediction: "Native Markets" Leads in Winning Probability, with Paxos at Only 15%

On September 10, according to the Polymarket page, in the Hyperliquid stablecoin USDH auction battle, Native Markets currently holds a 74% chance of winning, leading the various third-party auction participants. Paxos ranks second with a 15% chance of winning, and Ethena ranks third with a 12% chance of winning.

Paxos Updates USDH Proposal v2, to Collaborate with PayPal and Receive $20 Million PayPal Ecosystem Incentive

On September 10, stablecoin issuer Paxos updated the USDH proposal to version 2, which provides three upgrades:

· Partnership with PayPal, launching HYPE on PayPal/Venmo (subject to regulatory approval) and offering free USDH deposits and withdrawals, a $20 million ecosystem incentive, and global payment integrations between Checkout, Braintree, Venmo, Hyperwallet, and Xoom;

· Clear AF-first incentive structure, where Paxos can only earn rewards after reaching a TVL milestone, capped at 5%, and all fees are collected in the HYPE token;

· Paxos can legally issue stablecoins in Europe to ensure USDH can expand globally in a fully compliant manner.

Ethena Labs Proposes Bid for USDH Issuance Right

On September 10, according to official sources, Ethena Labs entered the competition for the USDH stablecoin issuance right under Hyperliquid and released a bid for the USDH issuance right proposal. Ethena Labs stated that if selected as a USDH issuer, USDH will be 100% backed by USDtb, issued by Anchorage Digital Bank, and backed by full collateral support from BlackRock BUIDL. Ethena pledged to give back at least 95% of the net revenue generated from the USDH reserve to the Hyperliquid community through HYPE buybacks, reward funds, and other means. Ethena will cover the USDC migration costs and plans to introduce a liquidity support mechanism to enhance USDH's depth in the perpetual contract market.

Ethena has already reserved at least $75 million (comprised of cash and token incentives) to support the HIP-3 frontend development for Ethena-related products (including USDe, hUSDe, and USDH), contingent on the proposal's approval. Fifty percent of the frontend-generated fee revenue will be shared with Hyperliquid.

September 9

Sky Joins the Competition for USDH Stablecoin Issuance Right under Hyperliquid

On September 9, Sky (previously MakerDAO) joined the competition for the USDH stablecoin issuance right under Hyperliquid. Sky's co-founder, Rune, stated on X platform: "Sky provides the key advantages of USDH for Hyperliquid:

· USDH will receive immediate liquidity of $2.2 billion USDC for off-chain redemptions;

· Sky can deploy its over $8 billion balance sheet onto Hyperliquid;

· All USDH on Hyperliquid will receive a 4.85% yield, higher than government bond yields, and all 4.85% yield generated by USDH will be used for the HYPE buyback fund;

· Sky can provide $25 million funding to create an independent Hyperliquid Star project to autonomously develop Hyperliquid DeFi;

· Sky can move its buyback system to Hyperliquid, utilizing over $250 million in annual profit to build USDH liquidity."

Hyperliquid Hosts "USDH Stablecoin Roundtable," Representatives from Paxos, Frax, Native Markets, Bridge, Bastion Platform, and Sky Participate

On the evening of September 9th, Hyperliquid hosted the "USDH Stablecoin Roundtable" at X Space, inviting representatives from projects such as Paxos, Frax, Native Markets, Bridge, Bastion Platform, and Sky to discuss proposals, compliance, and ecosystem integration related to the USDH stablecoin.

Sky Co-Founder Rune stated that the approach Sky is offering to the HyperLiquid community for USDH is to initially launch a fully decentralized stablecoin. A decentralized stablecoin design inherently has many safeguards in place to prevent corruption or incompetence that centralized issuers may face, providing users with out-of-the-box protection. However, regulatory approval is evidently still necessary, along with additional clarity, which would be very beneficial for compliance within regulatory frameworks. Sky will let the community decide how to strike a balance between decentralization and compliance. It is entirely plausible to make necessary adjustments on highly decentralized infrastructure to meet regulatory requirements.

Paxos Labs Co-Founder mentioned that Paxos Labs is a great fit for collaborating with the Hyperliquid ecosystem. Paxos Labs has a team dedicated to Hyperliquid, developing on Hyperliquid from day one. Additionally, Paxos is one of the longest-standing compliant stablecoin issuers in the industry, holding both a New York State Department of Financial Services' BitLicense and an OCC (Office of the Comptroller of the Currency) license. We believe that USDH will become an asset with a market cap exceeding $10 billion, or even larger. Only federally regulated entities can issue assets with a market cap exceeding $10 billion, which is not an accreditation attained easily. This is a crucial highlight for Paxos Labs. If a compliant global stablecoin is essential to the community, Paxos is currently the only provider in the industry capable of achieving this.

Frax Head of Growth Sean Kelley stated that regarding the "intention to allocate funds from revenue for buybacks," he believes that the specific allocation ratio should be determined by the community. Frax absolutely hopes to address this issue through governance. This may require finding a balance in the following areas: allocating some funds for buybacks to support further growth of USDH and enhancing other areas in the ecosystem considered weaker. The specific percentage should ultimately be decided by the community. As for the transparency of revenue distribution, Frax places great emphasis on data visualization, hoping to ensure that fund flows can be transparently tracked. Data will be published on a dashboard for user access, essentially tracking everything on-chain within the ecosystem. Regarding buyback allocation, Frax believes that conducting one quarterly may be reasonable, and all operations will be executed through smart contracts.

Bastion Platform Co-founder Nass Eddequiouaq expressed willingness to incentivize the migration of liquidity totaling hundreds of billions of dollars from USDC on Hyperliquid to USDH through a cost-offsetting mechanism. Bastion Platform believes the most crucial core element is to build a robust flywheel effect: continuously driving the conversion from USDC to USDH through incentive mechanisms and ensuring that all new markets built on USDH use USDH natively, not USDC. We should migrate the existing ecosystem to a financial system that benefits the entire community, while all new ecosystems should no longer be burdened by the legacy monetary system and must be natively built on USDH.

Hyperion Community Leader Max stated that building a stablecoin ecosystem first needs to have some degree of innovative features. Although there are many existing stablecoin solutions, Hyperliquid has a unique ecosystem positioning. Native Markets and Bridge clearly view USDH as a collaborative project, and the protocol will directly engage with Bridge, believing that necessary safeguards have been established. It should be noted that partnering with licensed companies also provides infrastructure advantages to access the Hyperliquid network—an aspect we highly value, whose value far exceeds the institutional interface itself. Native Markets always maintains technological neutrality and ensures that this principle becomes a core consideration throughout the entire decision-making process.

As the least known bidder for USDH, Native Markets had its proposal put forward by Hyperion's community leader Max, who previously spearheaded the listing of the Hyperliuquid DAT on Public Company. Native Markets plans to leverage Bridge to complete the stablecoin fiat channel integration and expressed that reserve interest profit will be injected into Hyperliquid's community aid fund. Their advantage lies in the team's deep understanding of the Hyperliquid chain and in-depth knowledge of the local ecosystem.

September 8

Competition for USDH Stablecoin Issuance Right Under Hyperliquid Intensifies as Multiple Institutions Vie, with Bids Submitted by Paxos, Frax, and Others

On September 8, it was reported that stablecoin issuers Paxos, Frax Finance, Agora, and others are competing for the upcoming issuance right of Hyperliquid's USDH stablecoin. Paxos submitted its USDH bid proposal on the 7th, pledging to provide compliance with the MiCA and GENIUS regulations, support for native deployment on HyperEVM and HyperCore, and allocate 95% of interest income to HYPE token buyback, redistributing the bought-back tokens to the "ecosystem plan, partners, and users."

Frax proposed a "Community First" proposal and plans to peg USDH to frxUSD at a 1:1 ratio, with frxUSD supported by the BlackRock Yield-Building On-Chain Sovereign Debt Fund. Frax stated that "100% of the underlying sovereign debt yield will be directly distributed to Hyperliquid users through on-chain programmatic means, with no fees charged by Frax." The current stablecoin deposits in Hyperliquid could bring an annualized income of $220 million.

Agora also assembled a joint bidding team for USDH, committing that "100% of net income" from USDH will be distributed to Hyperliquid for platform assistance funds or HYPE token buyback.

At the same time, the issuer of the third-largest dollar stablecoin USDe, Ethena Labs, hinted at joining the competition for the issuance right of the USDH stablecoin under Hyperliquid.

Frax Founder Discusses Hyperliquid USDH Competition: Interoperability Value Trumps Returns

On September 8, Frax founder Sam Kazemian posted on social media, pointing out that the core lesson from the Hyperliquid USDH event is that the true value of stablecoin issuers lies in the interoperability and deep integration of the economic distribution chain, rather than the attainable sovereign debt yield. He stated that candidate parties, including Frax and Paxos, are willing to return 100% of the income to Hyperliquid, but the actual value should far exceed shared returns.

September 5

Hyperliquid to Release USDH Token Symbol for Stablecoin Issuance

On September 5, according to official sources, Hyperliquid will release the USDH token symbol for stablecoin issuance. The USDH trading pair symbol reserved by the Hyperliquid protocol will be released through a transparent on-chain process via validator voting. After the next network upgrade, validators will be able to vote on whether to allow a user address to purchase the USDH symbol. The voting process will take place entirely on-chain, completed through Hyperliquid L1 transactions, similar to delisting votes.

Teams interested in applying for this symbol can submit a proposal on the new forum, which must include the user address to be used for deploying the USDH symbol when elected by the requisite number of validators. It is important to note that even if the team is approved, they must still participate in the regular on-chain deployment gas auction.

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