Hyperliquid, a leading decentralized perpetual futures exchange, recently announced plans to launch USDH as its native stablecoin to replace reliance on USDC and USDT.
This move has sparked an intense bidding war among stablecoin issuers for the exclusive right to mint and manage USDH. The winner will control issuance for Hyperliquid’s ~$5.5 billion in deposits, potentially generating hundreds of millions in annual yield from reserves (e.g., U.S. Treasuries).
Bids emphasize revenue sharing—often 95-100% of yields funneled back to Hyperliquid’s ecosystem via HYPE token buybacks or the Assistance Fund—alongside compliance, on-ramps, and integration with HyperEVM/HyperCore.
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The surge in Native Markets’ odds to 95% on Polymarket for winning the USDH stablecoin bid on Hyperliquid carries significant implications for Hyperliquid’s ecosystem, the HYPE token, the broader crypto market, and stakeholders like validators and users.
With ~$5.5B in deposits, USDH could generate $200M+ annually in yield from reserve assets. Native Markets’ 50/50 yield split (HYPE buybacks + Assistance Fund/ecosystem growth) ensures substantial reinvestment into Hyperliquid, boosting validator rewards and DeFi development on HyperEVM/HyperCore.
Native Markets’ promise of minting USDH in “days” via direct HyperEVM integration could accelerate Hyperliquid’s transition from USDC/USDT, enhancing platform sovereignty and reducing reliance on external stablecoins.
Native Markets’ Hyperliquid-first approach (e.g., tailored fiat rails via Bridge/Stripe, compliance with GENIUS Act/MiCA) strengthens the platform’s competitive edge, potentially attracting more users and dApps to HyperEVM, rivaling ecosystems like Solana or Arbitrum.
Dependence on Bridge for fiat on/off-ramps introduces a potential single point of failure, which could disrupt USDH adoption if technical or regulatory issues arise. HYPE has already rallied 18-39% to $52.67 (ATH) this week, fueled by buyback expectations.
A Native Markets win, with 50% of USDH yields allocated to HYPE buybacks, could sustain upward pressure, potentially pushing HYPE toward $60-$70 short-term, assuming validator vote confirmation. Validators, who hold significant HYPE for staking, benefit from buybacks and Assistance Fund distributions, increasing their influence and financial stake in Hyperliquid’s growth.
The 42% unallocated validator votes could spark volatility if sentiment shifts (e.g., due to “bribe” allegations or rival bids). A last-minute upset could tank HYPE temporarily.
The USDH bidding war highlights the growing importance of chain-native stablecoins with revenue-sharing models. Native Markets’ lead signals that community-aligned, ecosystem-focused issuers may outshine traditional players in DeFi-native platforms, setting a precedent for other L1/L2 chains.
Polymarket’s accurate tracking of odds (from 20% to 95% for Native Markets) reinforces the reliability of decentralized prediction markets for gauging sentiment and outcomes in crypto governance, potentially driving more volume to platforms like Polymarket.
Native Markets’ compliance with global frameworks (GENIUS Act, MiCA) could position USDH as a model for regulated DeFi stablecoins, influencing how other chains approach stablecoin integration amid tightening regulations.
Rivals like Paxos (with PayPal/Venmo rails) or Ethena (BlackRock-backed) losing could push them to innovate or seek similar partnerships elsewhere, intensifying stablecoin competition. With 38.5% already backing Native Markets and 42% unallocated, validators hold the key to the outcome.
A Native Markets win rewards their early support with higher yields and ecosystem growth, but allegations of “backroom deals” or “bribes” (unverified) could erode trust in the voting process if not addressed transparently.
Hyperliquid users gain from USDH’s seamless integration (e.g., fiat on-ramps, HyperEVM compatibility), potentially lowering trading costs and enabling new DeFi opportunities. However, any delays or issues with Native Markets’ infrastructure could frustrate adoption.
Losing bidders like Paxos, Ethena, or Agora may face reputational hits or pivot to other chains. Allegations of impropriety (e.g., voter incentives) could also spark community backlash, particularly against Ethena, whose odds have slipped to 3%.
Despite 95% odds, the 42% unallocated validator votes could shift the outcome, especially if a rival like Paxos (5% odds) or Ethena mobilizes late support. Polymarket sentiment isn’t a guarantee of the final vote, set to conclude soon after Sep 14, 2025.
USDH’s success depends on standing out in a crowded stablecoin market ($170B+ market cap). Native Markets must deliver on compliance and usability to compete with USDC, USDT, and emerging players like Ethena’s USDtb.
A successful USDH launch under Native Markets could position Hyperliquid as a DeFi powerhouse, leveraging USDH yields to fund HyperEVM dApps, user subsidies, and validator rewards, potentially surpassing $10B in TVL.
The bidding war model—open, validator-driven, with revenue-sharing—could inspire other chains to adopt similar processes, reshaping how stablecoins integrate with DeFi ecosystems.
HYPE’s price will likely remain a barometer of USDH’s success. Sustained buybacks and ecosystem growth could drive HYPE into the top 50 tokens by market cap within 6-12 months.
Native Markets’ 95% odds signal a transformative moment for Hyperliquid, with USDH poised to fuel ecosystem growth, HYPE appreciation, and DeFi innovation. However, unallocated votes and lingering controversies could still alter the trajectory.