Sky Enters USDH Stablecoin Race with $8B Backing and 4.85% Yield
September 9, 2025
Sky, formerly known as MakerDAO, has officially entered the competition to issue Hyperliquid’s native stablecoin, USDH. Competing against Paxos, Frax, Agora, and Native Markets, Sky leverages an $8 billion balance sheet, seven years of operating history, and a B- S&P credit rating—the first-ever rating awarded to a DeFi protocol.
Hyperliquid, which processed nearly $400 billion in trading volume last month, has invited multiple issuers to submit proposals for the lucrative USDH contract. The exchange holds $5.5 billion in USDC deposits, roughly 7.5% of total USDC supply, making the deal one of DeFi’s most valuable. Validators will vote on September 14, while the Hyperliquid Foundation will abstain.
Sky’s Proposal Features:
- High Yield: 4.85% returns on all USDH held on Hyperliquid, with revenue directed to HYPE buybacks and the Assistance Fund.
- Instant Liquidity: $2.2 billion available through its Peg Stability Module, ensuring large-scale institutional trades can execute smoothly.
- Ecosystem Investment: $25 million “Hyperliquid Genesis Star” program to jumpstart DeFi adoption on the platform, plus migration of Sky’s $250 million annual buyback engine onto Hyperliquid.
Competitors offer alternative strategies: Paxos pledges 95% of reserve earnings for buybacks; Frax channels 100% of Treasury yield to users; Agora emphasizes neutrality backed by State Street, VanEck, and MoonPay; Native Markets faces scrutiny over potential conflicts via Stripe’s Bridge.
The September 14 vote will decide whether USDH’s future is anchored to a DeFi-native protocol, a legacy stablecoin issuer, or a corporate blockchain entity.
