Hyperliquid’s plan to launch its proprietary stablecoin, USDH, has sparked one of the most heated governance debates in crypto this year. The token could replace $5.5 billion of USDC—currently 95% of the platform’s stablecoin supply—and generate substantial revenue from U.S. Treasury yields. The validator vote on September 14 will determine the issuer.
Key Bidders
The competition includes Paxos, Frax, and an Agora-MoonPay coalition. Paxos plans to channel 95% of reserve earnings into HYPE token buybacks, relying on its regulated issuer track record. Frax offers a “community-first” model, passing all Treasury yields to users. Agora emphasizes neutrality and alignment, pledging 100% of net revenue for HYPE buybacks or the Hyperliquid Assistance Fund. Ethena may also enter, increasing competition.
Stripe Proposal Sparks Debate
A proposal tied to Stripe’s Bridge platform has faced pushback. Critics argue that giving Stripe—already developing its Tempo blockchain and controlling wallet infrastructure via Privy—oversight of USDH could compromise Hyperliquid’s economic sovereignty. Agora CEO Nick van Eck warned, “If Hyperliquid relinquishes their canonical stablecoin to Stripe, a vertically integrated issuer with clear conflicts, what are we even doing?” MoonPay’s Keith Grossman added that USDH “deserves scale, credibility, and alignment—not capture.”
Next Steps
Proposal submissions close September 10, with the validator vote on September 14. The Hyperliquid Foundation will abstain, leaving the outcome to its validators. With nearly 80% of the DeFi derivatives market under Hyperliquid, controlling USDH represents a lucrative and strategically critical opportunity.
