The native stablecoin of Hyperliquid, USDH, was launched on Wednesday with a USDC trading pair, achieving nearly $2 million in initial trading.
With the launch of USDH, Hyperliquid introduces its first dollar-pegged asset, providing traders with a stable means of accounting and collateral throughout the network.
Native Markets will be responsible for managing the exchange’s stablecoin and overseeing potential flows worth billions. The crypto startup, spearheaded by Hyperliquid investor Max Fiege, former Uniswap Labs president Mary-Catherine Lader, and blockchain researcher Anish Agnihotri, was chosen through a validator vote on September 14.
According to the original proposal from Native Markets, the stablecoin will be backed by cash and US Treasury equivalents and will utilize Bridge, Stripe’s tokenization platform, to manage its reserves.
Minted on HyperEVM, Hyperliquid’s Ethereum-compatible execution layer, USDH circulates within its network, decreasing reliance on external stablecoins like Circle’s USDC and ensuring that yields remain within the ecosystem.
Hyperliquid operates as a decentralized derivatives exchange and launched its HYPE token via airdrop in November 2024. In July, the exchange handled approximately $330 billion in trading volume with a team of just 11 members.
Related: Crypto Firm Proposes Reducing HYPE Supply by 45%
The competitive bid for Hyperliquid’s stablecoin
The bidding began on September 5 when Hyperliquid announced a governance process to award the USDH ticker.
Shortly after, Native Markets submitted their bid, promising to issue USDH natively on HyperEVM and split reserve income evenly between HYPE token buybacks and ecosystem development funding.
In the ensuing hours and days, bids were also made by Paxos, Sky, Frax Finance, Agora, Curve, OpenEden, Bitgo, and Ethena — though Ethena later withdrew and supported Native Markets.
Controversy surrounded the process. Critics, including Haseeb Qureshi, managing partner at venture capital firm Dragonfly, suggested that the process seemed designed to favor Native Markets, even while larger companies like Paxos, Ethena, and Agora presented stronger proposals.
On September 9, Qureshi posted on X that he had heard from “multiple bidders that none of the validators are interested in considering anyone besides Native Markets,” implying prior knowledge of the USDH Request for Proposal.
He highlighted that Native Markets is a “brand new startup,” suggesting it lacks a history to justify its swift success in the bidding.
Notwithstanding the critiques, Native Markets emerged victorious on September 14, securing Hyperliquid’s first major governance decision with over two-thirds of the validators’ votes.
Over the past week, HYPE, Hyperliquid’s native cryptocurrency, experienced a decline of around 7%, according to data from CoinGecko.
Hyperliquid is also facing emerging competition from Aster, a decentralized perpetual exchange operating on the BNB Chain.
On Wednesday, data from DefiLlama showed Aster’s daily perpetual trading volume nearing $30 billion, significantly surpassing Hyperliquid’s $10 billion at the time of writing.
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