USDH Competition Heats Up: Everyone Eyes the Stablecoin + Hyperliquid Opportunity

The USDH competition has ignited fierce bidding on Hyperliquid, the leading decentralized derivatives platform, as of September 23, 2025, with proposals from Paxos, Frax, Agora, Native Markets, and Ethena vying for the native stablecoin’s issuance rights. Hyperliquid’s $400 billion monthly volume and $106 million August fees make USDH a prized asset, potentially generating $200 million+ in annual interest from reserves. This USDH competition underscores the allure of stablecoin + Hyperliquid synergy in a $3.5 trillion cryptocurrency market. The article explores the USDH competition dynamics, key proposals, community buzz, and market stakes.

Hyperliquid’s USDH Bidding Frenzy

The USDH competition kicked off on September 5, 2025, with Hyperliquid auctioning the ticker for its native stablecoin, drawing bids from top stablecoin issuers. Proposals closed on September 10, with community voting on September 14. Hyperliquid’s dominance—70% of decentralized perpetuals market and $57 billion USDC circulation—positions USDH to capture 7.8% of USDC reserves, yielding $200 million+ at 4%-5% rates. This USDH competition reflects the platform’s shift to community governance, with the foundation abstaining from votes.

• Timeline: Bids Sept 5-10, vote Sept 14.
• Volume: $400B monthly.
• Reserves: $57B USDC (7.8% capture).

Top Proposals in the Race

The USDH competition features innovative bids emphasizing compliance and yields:

• Paxos: Compliant issuance, 95% yields for HYPE buybacks.
• Frax: 100% yields, trustless model.
• Agora: Neutral governance, full 100% yields to ecosystem.
• Native Markets: Co-management by BlackRock/Superstate, community funds.
• Ethena: LSD model with hedging, 95% revenue pledge.

These proposals prioritize Hyperliquid alignment, with the USDH competition focusing on $200M+ interest distribution for growth.

• Yields: 95-100% to community/HYPE.
• Compliance: U.S. GENIUS standards.
• Governance: Neutral and trustless.

Community Reactions and Voting

The USDH competition has sparked debates on fairness, with some accusing rigging, but Nansen’s CEO defended the process as transparent. Native Markets led with 97% support, per early polls. The USDH competition’s community-driven vote ensures alignment, though controversies highlight governance challenges in DeFi.

• Support: Native Markets at 97%.
• Debates: Fairness and transparency.
• CEO defense: “Transparent process.”

Market Stakes and Implications

The USDH competition’s winner will capture $200M+ yields in a $3.5 trillion market, boosting Hyperliquid’s TVL and HYPE value. Stablecoin profitability drives interest, with USDH potentially reducing USDC reliance. This USDH competition could set precedents for native stablecoins in DeFi, enhancing liquidity and adoption.

• Yields: $200M+ annually.
• TVL boost: For Hyperliquid.
• Precedent: DeFi stablecoin issuance.

Key Takeaways

The USDH competition on Hyperliquid draws bids from Paxos to Ethena, eyeing $200M yields in a $3.5 trillion market. Native Markets’ lead signals compliance focus. Monitor voting results for ecosystem shifts.