Hyperliquid is making waves in the crypto world by announcing the launch of its very own stablecoin, USDH, and allowing the community to vote on who will issue it. This bold move has attracted the attention of top stablecoin issuers, who are now in a high-stakes competition for the opportunity.
With $5.6 billion in deposits and the potential to generate annual revenue of $220 million, Hyperliquid’s decision to create USDH is a strategic one. Currently relying on USDC, the exchange is looking to capture the interest earned on deposits for itself by introducing USDH. This move could potentially triple the revenue of Hyperliquid’s HLP vault, making it a lucrative opportunity.
Lower trading fees on spot pairs and improved liquidity are part of the plan for Hyperliquid. By boosting its spot trading volume and strengthening order books, the platform aims to become more competitive in the market.
The race for the issuer of USDH is heating up, with notable contenders like Paxos, Frax Finance, Agora, Native Markets, and Sky (formerly MakerDAO) vying for the position through a validator vote. Each contender brings unique offerings to the table, from NYDFS regulation and HYPE token buybacks to passing Treasury yields directly to users and offering high liquidity.
However, not everyone is convinced that the voting process is fair. Some community members have raised concerns about the short review window and the timing of proposals submitted by certain contenders. Despite this, the decision on who will issue USDH will have significant implications for Hyperliquid’s revenue and ecosystem.
USDH has the potential to bring a substantial revenue boost and improve spot market liquidity for Hyperliquid. However, replacing USDC, a stablecoin with a strong track record and deep liquidity, will not be without its challenges. This move by Hyperliquid marks an important experiment in the crypto world, with high stakes and potentially game-changing outcomes.