Hyperliquid’s decision to launch its stablecoin has sparked one of the most competitive governance battles in recent memory.
Last week, the decentralized exchange, which had been relying on Circle’s USDC for its liquidity, announced plans to introduce USDH as its native stablecoin. The move immediately attracted a wave of bidders, each vying for the right to issue the token and capture billions in potential value.
At least eight organizations have already submitted proposals, including established players like Paxos, Ethena, Agora, and OpenEden.
Validators on the Hyperliquid network will ultimately decide who secures the mandate, but in the meantime, speculators have taken to Polymarket to place their bets on the outcome.
Polymarket bettors favor New Market
According to Polymarket odds, one group, Native Markets, stands out as the clear favorite in a market above the $1 million trading volume mark as of press time.
Crypto traders on the decentralized marketplace assigned the newcomer a 90% chance of winning the validator vote, but that percentage has dropped to 84% at the time of this report.
Native Markets was formed specifically to compete for USDH and is led by Max Fiege, an investor within the Hyperliquid ecosystem.
The firm’s pitch proposes a hybrid reserve model in which off-chain assets would be managed by BlackRock, while the on-chain reserves would be held through Superstate using Bridge, a Stripe-owned platform.
Native Markets also pledged to split yield from reserve assets, with half earmarked for HYPE token buybacks and half for USDH expansion.
Meanwhile, Native Market’s proposal structure has generated both interest and skepticism from community members.
In Agora’s proposal, Nick Van Eck, the founder of Agora, pointed out that Native Markets’ proposal reliance on Stripe could prove detrimental to Hyperliquid in the long run.
According to him:
5 Days to Smarter Crypto Moves
Learn how pros avoid bagholding, spot insider front-runs, and capture alpha — before it’s too late.
Brought to you by CryptoSlate
“Stripe recently announced their plans for Tempo, a new layer 1 blockchain. Stripe is committed to driving activity to this ecosystem from a variety of players. How long until Stripe and Bridge start pushing users and perps from other financial applications directly to Tempo instead of Hyperliquid?”
Despite these concerns, Dragonfly Capital’s Haseeb Qureshi suggested that Native Markets may have had advance notice of the request-for-proposals process, given how quickly its submission appeared.
He wrote:
“Everyone else scrambled over the weekend to put something together. So this whole USDH RFP was basically custom made for Native Markets.”
However, Alex Svavenik, the CEO of Nansen, countered this claim by stressing that validators have been deeply engaged with all bidders.
According to him, the process is far more competitive than critics suggest, with validators actively seeking the best long-term option for Hyperliquid.
Rival proposals gain momentum
While Hyperliquid validators might appear inclined toward Native Markets, observers point to Paxos, Ethena, and Agora as candidates with stronger institutional track records.
Moreover, these rival firms have been refining their offers, and new entrants are introducing new bids for the USDH stablecoin.
On Sept. 10, Paxos unveiled a revised plan centered on a partnership with PayPal.
According to the firm, this collaboration would embed USDH into PayPal and Venmo products, list HYPE on PayPal’s ramps, and inject $20 million in incentives for the Hyperliquid ecosystem.
Paxos also set strict revenue caps to assure the community of its long-term alignment. It wrote:
“Paxos takes nothing until we reach $1 billion in TVL and stays capped at 5% post $5 billion TVL. Any fees earned by Paxos through this milestone will be held in HYPE tokens.”
Speaking on the updated proposal, Max Fantle, a Paxos executive, said:
“PayPal and Venmo have 400M+ users. Paxos is the only neutral, regulated issuer that can unlock an entirely new institutional customer segment for Hyperliquid that no other issuer can reach.”