Hyperliquid validators will vote on Sept. 14 to decide which provider will issue a new native stablecoin, USDH — a decision that could shift how the exchange sources liquidity and capture significant treasury yields. The outcome matters because USDH could displace roughly $5.5 billion of USDC currently used on the platform and generate hundreds of millions in revenue from U.S. Treasury yields.
Competing bids include regulated issuer Paxos, DeFi-native issuer Frax, and a coalition led by Agora with support from payment processor MoonPay. Paxos proposes directing 95% of reserve earnings into HYPE token buybacks and leans on its regulatory track record. Frax is pitching a user-first model that passes 100% of Treasury yield back to users. Agora’s coalition emphasizes neutrality and alignment with Hyperliquid’s community, pledging 100% of net revenue to HYPE buybacks or the platform’s Assistance Fund.
The most contentious element centers on a proposal tied to Stripe’s Bridge platform and the company’s Tempo blockchain efforts. Critics — including Agora CEO Nick van Eck — warn that awarding issuance to a provider with built-in payments and wallet infrastructure could create conflicts of interest and concentrate economic control with a potential competitor.
MoonPay’s president highlighted his firm’s licensing footprint and verified user base as reasons to prefer the Agora-backed option, calling for “scale, credibility and alignment” over what he framed as capture by a single vendor.
Hyperliquid set a Sept. 10 proposal cutoff and said the Hyperliquid Foundation will effectively abstain, leaving the decision to validators. Given Hyperliquid’s near-80% share of DeFi derivatives processing, the winner stands to gain both steady yield revenue and influence over the platform’s monetary layer.
What to watch: the validator vote outcome, how selection affects USDC exposure on the platform, and whether governance chooses neutrality or a partner with deep payments integration — a choice with regulatory and centralization risks.
Source: CoinDesk. Read the original coverage for full details.