Hyperliquid announced the launch of the USDH stablecoin, accompanied by significant updates to its spot trading infrastructure.
The Hyperliquid Foundation revealed plans to reduce taker fees, maker rebates, and user volume contributions by 80% for spot trading pairs to enhance liquidity and reduce trading friction. Additionally, the USDH ticker, previously reserved by the protocol, will be released through an on-chain validator voting process.
Teams interested in acquiring the USDH ticker must submit proposals, including their deployment address, and participate in a spot deploy gas auction. Validators will approve a user address for purchasing the USDH ticker via Hyperliquid L1 transactions, with the protocol seeking a “Hyperliquid-first, Hyperliquid-aligned, and compliant USD stablecoin.”
These changes aim to boost trading volume and set new standards for compliance and accessibility in decentralized finance (DeFi). Please note that there is another stablecoin in the Hyperliquid ecosystem called USDhl, which is distinct from USDH.
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USDhl is a fiat-backed stablecoin custom-built for Hyperliquid, powered by the M0 platform and collateralized by short-term U.S. Treasuries. It serves as a building block for HIP-3, forex, payments, and more, with revenues reinvested into the Hyperliquid ecosystem to drive growth.
Hyperliquid’s reduction of spot trading taker fees, maker rebates, and user volume contributions by 80% alongside the USDH launch aims to boost liquidity and reduce trading friction. This could attract more traders to the platform, increasing trading volume and reinforcing Hyperliquid’s position as a leading decentralized exchange (DEX) for perpetual futures, which already commands 70–80% of the DeFi perps market.
Lower fees make spot trading more cost-effective, potentially drawing retail and institutional investors seeking high-performance, low-cost trading environments. This aligns with Hyperliquid’s goal of offering a centralized exchange (CEX)-like experience with DeFi benefits like transparency and decentralization.
Decentralized Governance and Community Alignment
The USDH ticker is being released through an on-chain validator voting process, requiring teams to submit proposals and participate in a spot deploy gas auction. This democratic approach ensures that the selected USDH stablecoin issuer aligns with Hyperliquid’s vision of a “Hyperliquid-first, Hyperliquid-aligned, and compliant USD stablecoin.”
This governance model fosters community trust and participation, potentially setting a precedent for future DeFi protocols to involve validators in key decisions, enhancing decentralization and transparency. It also mitigates risks of centralized control over critical assets like stablecoins.
Hyperliquid’s emphasis on a “compliant USD stablecoin” signals a strategic move to align with regulatory frameworks, such as the U.S. GENIUS Act passed in July 2025, which supports stablecoin adoption. This could attract institutional investors wary of regulatory uncertainty, as seen with partnerships like BitGo and Anchorage Digital integrating HyperEVM for secure, compliant access to DeFi.
A compliant USDH could position Hyperliquid as a bridge between DeFi and traditional finance, potentially capturing a significant share of the projected $10 trillion stablecoin market by 2028, as forecasted by some analysts.
The introduction of USDH adds to Hyperliquid’s growing stablecoin ecosystem, which already includes USDC, feUSD, USDT, and USDe. With a stablecoin market cap of $5.726 billion on Hyperliquid L1, USDH could further diversify and expand this market, challenging established stablecoins like USDC and USDT.
By offering a native stablecoin tailored to its ecosystem, Hyperliquid may reduce reliance on external stablecoins, enhancing self-sufficiency and potentially capturing more value within its network through fee reinvestment and liquidity incentives.
The validator voting process and gas auction for USDH introduce complexity, and the outcome depends on the quality of proposals and validator consensus. A poorly chosen issuer could undermine trust in USDH. Competition from established stablecoins and other blockchains like Tron and Ethereum could limit USDH’s adoption.
Additionally, regulatory shifts or stricter oversight could pose risks to USDH’s growth trajectory, as noted by J.P. Morgan’s conservative $500 billion stablecoin market forecast by 2028. The JELLY token manipulation incident highlighted vulnerabilities in Hyperliquid’s cross-margin systems.
Hyperliquid’s focus on low fees, high throughput (200,000 orders/second via HyperBFT), and native stablecoin integration challenges competitors like dYdX and GMX, which offer higher fees or lower leverage. The USDH launch could further differentiate Hyperliquid by emphasizing compliance.
The USDH stablecoin launch could significantly enhance Hyperliquid’s liquidity, attract institutional capital, and strengthen its governance model through validator voting, while USDhl’s established yield-generating model already drives ecosystem growth.
Together, they position Hyperliquid to capture a larger share of the stablecoin and DeFi markets, though risks like regulatory hurdles and competition remain. USDH’s compliance focus and USDhl’s treasury-backed yield model cater to different priorities, offering flexibility to users and reinforcing Hyperliquid’s innovative approach to DeFi.