Hyperliquid’s plan to launch its proprietary stablecoin, USDH, has sparked one of the most intense governance battles in crypto this year. The token could replace $5.5 billion of USDC—currently 95% of the platform’s stablecoin supply—and generate significant revenue from U.S. Treasury yields. The deciding validator vote is scheduled for September 14.
The Contenders
Major bidders include Paxos, Frax, and a coalition led by Agora, backed by MoonPay. Paxos proposes allocating 95% of reserve earnings to HYPE token buybacks, leveraging its long-standing regulated issuer track record. Frax offers a “community-first” model, passing 100% of Treasury yield directly to users. Agora emphasizes neutrality and alignment, pledging all net revenue for HYPE buybacks or the Hyperliquid Assistance Fund. Ethena may also enter the race, adding further competition.
Community Pushback Over Stripe
A proposal linked to Stripe’s Bridge platform has drawn criticism. Community members warn that allowing Stripe—already developing its Tempo blockchain and controlling wallet infrastructure via Privy—would cede economic control to a competitor. Agora CEO Nick van Eck said, “If Hyperliquid relinquishes their canonical stablecoin to Stripe, a vertically integrated issuer with clear conflicts, what are we even doing?” MoonPay President Keith Grossman stressed that USDH “deserves scale, credibility, and alignment—not capture.”
Next Steps
Proposal submissions close on September 10, with the validator vote on September 14. The Hyperliquid Foundation plans to abstain, leaving the decision to validators. With nearly 80% of the DeFi derivatives market under Hyperliquid, issuing USDH represents a lucrative and strategically important opportunity.
