Hyperliquid, a decentralized exchange platform, launched its native stablecoin, USDH, on September 23 with an impressive $2.2 million in early trading volume. This launch marked a significant milestone for Native Markets, as they emerged victorious in a competitive governance vote against established players like Paxos and Ethena Labs to secure the right to issue USDH on the platform.
Trading of USDH commenced with a USDH/USDC spot pair on HyperCore, with over $15 million in pre-minted tokens ready for initial distribution. The stablecoin successfully maintained its peg to the US dollar during early trading sessions, only fluctuating to $1.001 as market participants tested its liquidity and stability mechanisms.
Native Markets implemented a controlled rollout strategy for USDH, initially capping individual transactions at $800 per user to ensure the core functions undergo real-world testing. The company announced the completion of both HIP-1 and ERC-20 token deployments, paving the way for several integration phases in the coming months.
Future developments for USDH include HyperEVM integrations, the expansion of its role as a spot quote asset, native minting directly on HyperCore, and the introduction of USDH-margined perpetual contracts through the proposed HIP-3 protocol upgrade. The stablecoin reserves are structured using cash and short-term U.S. Treasury holdings managed off-chain by BlackRock, while on-chain tokenized assets operate through Superstate and Stripe’s Bridge infrastructure.
Native Markets has committed to directing 50% of the reserve yield from USDH towards Hyperliquid’s Assistance Fund, with the remaining portions allocated for ecosystem development. This revenue-sharing model emerged from a competitive proposal that secured validator approval against better-known rivals during the governance process.
The launch of USDH reflects a broader shift within the DeFi space, as trading platforms aim to reduce their dependence on external stablecoin issuers and capture reserve yield revenue internally. While Tether’s USDT remains dominant in the market, native stablecoins like USDH are targeting specific ecosystem integration rather than cross-chain ubiquity.
The stablecoin landscape is witnessing increasing fragmentation, with specialized players entering the market to challenge the dominance of established stablecoins. As regulatory frameworks evolve, compliant alternatives like USDH have the opportunity to capture market share and thrive in a rapidly expanding sector.
Overall, the success of ecosystem-focused stablecoins like USDH will depend on the growth trajectories of their host platforms. With Hyperliquid generating significant revenue and implementing strategic initiatives to bolster liquidity, USDH has the potential to establish itself as a viable alternative to traditional stablecoins like Tether.