USDH, the new stablecoin, has officially entered the scene on Hyperliquid. Native Markets emerged victorious in the validator battle early September, beating out heavyweight competitors like Paxos, Frax, and Agora. As a result, since the morning of September 24th, a USDH/USDC market has opened with millions of dollars already exchanged.
USDH: A Dollar-Backed Stablecoin Designed for Transparency
USDH is a stablecoin pegged to the dollar, issued directly on HyperEVM and connected to the entire Hyperliquid ecosystem. Native Markets ensures that each token is fully backed by cash and short-term US Treasury bills. While some reserves are managed off-chain, an on-chain component guarantees continuous transparency through oracle data streams.
Beyond parity with the dollar, the economic model features a unique mechanism: a portion of the revenue generated by reserves will be used to repurchase HYPE, Hyperliquid’s native token. This strengthens the ecosystem’s value while fostering community loyalty.
An Unusual Choice in the Face of Paxos and PayPal
The competition was fierce. Paxos, for instance, highlighted its connections with PayPal and Venmo to woo validators, prompting PayPal to even communicate about the vote. Nevertheless, the Hyperliquid community made a clear decision: it was better to favor a local, bespoke solution more closely aligned with the platform’s needs. Polymarket bettors were quick to notice, heavily backing Native Markets well before the final vote, raising suspicions of insider trading…
This choice reflects a strong trend: exchanges now want their own dollar rails, without relying solely on already well-established giants. Hyperliquid thus aligns with its internal liquidity and fee centralization strategy.
A Booming Stablecoin Market
The launch of USDH comes at a pivotal moment. The total stablecoin market cap is nearing $280 billion, hitting a historic high. USDT and USDC still dominate, but the space is increasingly contested by new players, each seeking to capture a slice of this colossal market.
By introducing its own digital dollar, Hyperliquid gains a major asset to attract traders and capital. The goal is clear: make USDH a credible alternative, capable of asserting itself in a sector where trust and liquidity are essential pillars.
