Sky, the protocol formerly known as MakerDAO, has formally entered the contest to issue Hyperliquid’s native stablecoin, USDH, pitching its institutional credentials and deep reserves ahead of a validator vote on Sept. 14.
Sky’s proposal leans on an $8 billion balance sheet, a seven‑year operating track record and an S&P B‑ rating—the first credit score ever issued to a DeFi protocol. The bid promises 4.85% returns on USDH held on Hyperliquid, with revenue directed to HYPE buybacks and an Assistance Fund.
To ease large flows, Sky commits $2.2 billion of instant redemption capacity through its Peg Stability Module, and proposes a $25 million “Hyperliquid Genesis Star” program to seed on‑exchange DeFi activity. The protocol also says it will migrate its native buyback engine—reportedly producing more than $250 million in annual profits—onto Hyperliquid.
Hyperliquid, which reported nearly $400 billion in trading volume last month, holds about $5.5 billion in USDC deposits (roughly 7.5% of that stablecoin’s supply), making the USDH issuer contract one of the largest commercial opportunities in DeFi.
Competing offers frame tradeoffs differently: Paxos proposes a zero‑fee USDC migration and pledges 95% of reserve earnings to HYPE buybacks; Frax emphasizes a “community‑first” wrapper with 100% of Treasury yield flowing to users; Agora—backed by State Street, VanEck and MoonPay—promises full net‑revenue buybacks and institutional neutrality. Native Markets, aligned with Stripe’s Bridge, has drawn community scrutiny over potential conflicts tied to Stripe’s Tempo chain and wallet provider ties. Ethena has also signaled interest.
The vote will decide not just who issues USDH but how Hyperliquid’s monetary layer is structured—whether it tilts toward legacy stablecoin infrastructure, DeFi‑native treasury models, or corporate payments players with blockchain ambitions.
Risks to watch: community pushback over conflicts of interest, counterparty and liquidity risk if large redemptions occur, and governance tensions as validators weigh yield, neutrality and downstream economic incentives.
Source: CoinDesk. Read the original coverage for full details.