Sky Enters USDH Stablecoin Race with $8B Backing and 4.85% Yield

September 9, 2025

Sky, formerly MakerDAO, has joined the competition to issue Hyperliquid’s native stablecoin, USDH, competing against Paxos, Frax, Agora, and Native Markets. Leveraging an $8 billion balance sheet, seven years of operations, and a B- S&P credit rating—the first ever for a DeFi protocol—Sky aims to strengthen its bid.

Hyperliquid, which saw nearly $400 billion in trading volume last month, invited multiple issuers to submit proposals. The exchange holds $5.5 billion in USDC deposits, roughly 7.5% of that stablecoin’s supply, making the contract one of the most lucrative in DeFi. Validators will vote on September 14, with the Hyperliquid Foundation abstaining.

Sky’s Proposal Highlights:

• High Yield: 4.85% returns on all USDH held on Hyperliquid, with revenue allocated to HYPE buybacks and the Assistance Fund.
• Liquidity: $2.2 billion in instant redemption through its Peg Stability Module, supporting large-scale institutional trading.
• Ecosystem Growth: $25 million “Hyperliquid Genesis Star” to bootstrap DeFi adoption, plus migration of Sky’s $250M annual buyback engine onto Hyperliquid.

Other bids differ in approach: Paxos pledges 95% of reserve earnings for buybacks; Frax offers full Treasury yield to users; Agora prioritizes revenue neutrality; Native Markets faces scrutiny over potential conflicts with Stripe’s Bridge.

The vote will decide whether USDH’s future is anchored to a DeFi-native protocol, a legacy stablecoin provider, or a corporate blockchain entity.