Native Markets—a startup co-founded by an early Hyperliquid contributor—won a competitive community-led bid to issue USDH, Hyperliquid’s native, compliant USD stablecoin.
This victory came after a heated bidding process involving major players like Paxos, Frax, Ethena, Agora, and BitGo, where Native Markets’ proposal emphasized reserve management across on- and off-chain assets, with yields directed toward HYPE token buybacks and USDH distribution growth.
USDH is set for a staged rollout on Hyperliquid’s Ethereum-compatible HyperEVM network, starting with small-scale testing for mints/redemptions (capped at $800 per transaction initially), followed by a USDH/USDC spot trading pair and uncapped operations.
In direct response, Circle—the issuer of USDC—accelerated its expansion into the Hyperliquid ecosystem. Just two days later, Circle launched native USDC on HyperEVM, marking a strategic move to counter potential market share loss to USDH.
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This integration allows seamless USDC transfers across over a dozen networks via Circle’s Cross-Chain Transfer Protocol (CCTP v2), positioning USDC as collateral for perpetual contracts, a quote asset for spot pairs, and a tool for HyperEVM apps like treasury management and payments.
Circle also became a direct stakeholder by investing in HYPE tokens for the first time, while announcing incentive programs and collaborations with HyperEVM developers under Hyperliquid Improvement Proposal 3 (HIP-3).
USDH aims to become Hyperliquid’s dominant stablecoin, but Circle’s rapid native deployment ensures USDC remains a viable option, potentially preserving 12-15% of Circle’s revenue from the platform. Hyperliquid confirmed continued support for compliant stablecoins like USDC as quote assets.
HyperEVM, now the 8th largest DeFi chain with $2.66B TVL, benefits from increased liquidity and cross-chain interoperability. HYPE price surged to an all-time high of $59 post-announcement, boosting Hyperliquid’s $15B market cap.
This underscores intensifying stablecoin battles in DeFi, with Hyperliquid—handling $150B in monthly derivatives volume—emerging as a key battleground. Circle’s involvement validates HyperEVM as a standalone L1, per analysts like VanEck’s Matthew Sigel.
Native Markets’ USDH, aims to dominate HyperEVM’s ecosystem by leveraging on-chain governance and HYPE token buybacks. Circle’s rapid deployment of native USDC on HyperEVM is a direct countermeasure to protect its ~$5.3B in USDC liquidity on Hyperliquid.
Analysts estimate Circle could retain 12-15% of its platform revenue by ensuring USDC’s utility as collateral for perpetuals and a quote asset for spot trading. The coexistence of USDH and USDC as compliant stablecoins on HyperEVM sets up a high-stakes rivalry.
Hyperliquid’s confirmation of support for multiple stablecoins suggests a neutral stance, but USDH’s integration into governance (e.g., yield distribution) gives it a structural edge. Circle’s Cross-Chain Transfer Protocol (CCTP v2) enables seamless USDC transfers across 12+ networks, enhancing HyperEVM’s interoperability.
Combined with USDH’s rollout, this drives liquidity to HyperEVM, now the 8th largest DeFi chain with $2.66B in TVL. Circle’s investment in HYPE tokens and the USDH bid outcome fueled a price spike to $59, pushing Hyperliquid’s market cap to $15B.
This signals growing investor confidence in Hyperliquid’s governance and HyperEVM’s potential as a standalone L1 chain. Circle’s collaboration with HyperEVM developers under HIP-3 (e.g., treasury management, payment apps) fosters dApp innovation, potentially attracting more projects to the ecosystem.
By integrating USDC natively and investing in HYPE, Circle establishes itself as a key Hyperliquid stakeholder. Its planned USDC expansion to HyperCore further solidifies its long-term commitment, countering USDH’s rise while capitalizing on Hyperliquid’s $150B monthly derivatives volume.
The USDH bidding process, despite controversy over fairness, demonstrates Hyperliquid’s community-driven model. Native Markets’ win validates HyperEVM’s ability to onboard innovative startups, reinforcing its competitive edge in DeFi.
Hyperliquid’s prominence as a derivatives hub makes it a critical battleground for stablecoin issuers. Circle’s swift response mirrors broader industry trends, where stablecoins like USDT, USDC, and emerging players like USDH vie for dominance in high-volume DeFi ecosystems.
Circle’s expansion and USDH’s launch intensify competition, boost HyperEVM’s liquidity and innovation, and cement Hyperliquid’s role as a DeFi powerhouse, with ripple effects across the stablecoin and L1 ecosystems. This development highlights Hyperliquid’s maturing governance and Circle’s proactive DeFi strategy.