Video | Weekly Market Analysis: Hyperliquid's USDH War: The First Step in the De-USDC Movement?

Hyperliquid's native stablecoin USDH bidding war concluded with Native Markets winning, aiming to reduce Hyperliquid's heavy reliance on USDC. The competition highlights a significant shift towards decentralized, validator-governed stablecoins.

USDH's Goal: To diversify away from USDC, which currently backs ~95% of Hyperliquid's $5B in assets. Success could generate $220M in annual revenue.
Winning Proposal (Native Markets): Plans to allocate 50% of proceeds to a relief fund and 50% to promote USDH adoption, with funds managed by BlackRock and Fidelity. It had a >96% win rate on Polymarket.
Key Competitor (Paxos): Proposed leveraging PayPal's 400M users for integration and committed to repurchasing HYPE tokens with 95% of interest income.
Industry Impact: This validator-governed model is seen as a new, more transparent paradigm for stablecoins, potentially setting a new standard for DeFi and liquidity management.

Original article: TheRoundTrip

Compiled by Yuliya, PANews

At the intersection of crypto and AI, the truly important stories often lie hidden beneath the noise. To uncover these overlooked truths, PANONY and Web3.com Ventures have partnered to launch the English-language video series "The Round Trip." Co-hosted by John Scianna and Cassidy Huang, this episode will focus on Hyperliquid's USDH bidding war, exploring the various projects' proposals and the ultimate outcome.

*Note: This video was released on September 12, and some data and dynamics may differ from the current situation.

TL;DR:

Hyperliquid has launched its native stablecoin, USDH. Validators vote to determine the issuer, aiming to reduce its reliance on USDC. Currently, approximately 95% of assets on Hyperliquid are denominated in USDC, representing approximately $5 billion. If successful, USDH could generate $220 million in annual revenue and provide a more robust guarantee for ecosystem liquidity.
Native Markets Proposal: Led by Max Figue, the team includes former Uniswap President Mary-Catherine Lader and former Paradigm member Anish Agnihotri. The proposal plans to allocate 50% of proceeds to a relief fund and 50% to promote USDH adoption, with funds managed by BlackRock and Fidelity. Backed by Nansen and the Hypuur Collective, the proposal boasts a win rate exceeding 96% on Polymarket.
Paxos' proposal: Partner with PayPal and Venmo, committing to repurchase HYPE with 95% of interest income, integrating HYPE into mainstream payment systems, and acquiring Molecular Labs. Kraken will offer free deposits and withdrawals. The goal is to leverage PayPal's 400 million users to expand the Hyperliquid community.
Competitive Landscape: In addition to Native Markets and Paxos, Frax, Sky, Agora, and Ethena are all participating. ( Ethena withdrew last Thursday .) Circle chose not to compete and will continue to promote USDC. In terms of governance, voting is highly symbolic, representing the official issuer, but it will not directly change USDC's existing liquidity advantage. (Currently, Native Markets has won the Hyperliquid stablecoin USDH bidding and plans to enter the testing phase "within a few days." )
Industry Significance: The Genius Act opens up the stablecoin market, leveling the playing field. USDH, which adopts validator governance rather than centralized control, is seen as a new, more transparent and decentralized model. It may become a new paradigm for the integration of liquidity management and DeFi, marking a new phase for stablecoins driven by ecosystem leadership and compliance.