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The race to issue Hyperliquid’s highly anticipated stablecoin, USDH, is heating up, with Native Markets emerging as the clear favorite to secure the opportunity, according to predictions on Polymarket. With around 92% odds, bettors are signaling strong confidence in the startup, co-founded by early Hyperliquid supporter Max Fiege, as the potential manager of the platform’s $5.9 billion stablecoin reserve.
Hyperliquid’s Stablecoin Initiative
Hyperliquid, the world’s largest decentralized derivatives exchange by volume, is moving forward with plans for a “Hyperliquid-first, Hyperliquid-aligned, and compliant USD stablecoin.” The project invited proposals from multiple teams earlier this month, aiming to find a partner that can responsibly handle USDH issuance while contributing to the ecosystem’s growth.
Initially, eight teams submitted bids, including Agora, Frax, Paxos, Sky (formerly MakerDAO), Ethena, BitGo, and OpenEden. However, Ethena dropped out, leaving the remaining teams competing for validator and community support. Hyperliquid’s foundation has also adjusted its voting approach, removing its staked HYPE tokens from the decision-making process to give more influence to community token holders.
Native Markets’ Rising Favor
Native Markets, backed by Max Fiege, has steadily gained attention due to its early involvement and credibility within the Hyperliquid ecosystem. Polymarket data indicates that the startup now controls over 30% of the delegated stake, a substantial lead over the next contender, Paxos, which holds 7.6%.
Fiege’s team has outlined a detailed plan for USDH issuance, emphasizing compliance with GENIUS standards and allocating a meaningful portion of reserve proceeds to Hyperliquid’s Assistance Fund. The team also includes industry veterans such as MC Lader, former President and COO of Uniswap Labs, and blockchain researcher Anish Agnihotri, further strengthening their bid.
Controversy and Market Reactions
The selection process has not been without controversy. Observers have raised questions about whether Hyperliquid insiders favored Native Markets from the start. Dragonfly co-founder Haseeb Qureshi described the process as “a bit of a farce,” while OAK Research’s Lilian Aliaga highlighted potential biases in how a newcomer like Native Markets could rapidly submit a competitive bid after the USDH RFP gained validator support.
Despite these concerns, other market participants have defended the fairness of the process. Ethena Labs founder Guy Young noted that Native Markets’ rise reflects the Hyperliquid ecosystem’s open and merit-based structure. “It is a level playing field where emergent players can win the hearts of the community and are given a fair shot at succeeding,” Young commented.
Competitor Bids
Other contenders brought competitive proposals to the table. Paxos, a stablecoin issuer established in 2018, proposed full MiCA and GENIUS Act compliance, native deployment on HyperEVM and HyperCore, and the use of 95% of its reserve yield for HYPE token buybacks.
Agora, a startup founded by Nick VanEck that recently secured $50 million in Series A funding, offered a revenue-sharing model with Hyperliquid, pledging 100% of net revenue from USDH issuance. These proposals demonstrated the wide array of approaches and incentives available to Hyperliquid’s community and validators.
Voting and Community Involvement
Validators will cast their votes on Sunday, marking a critical stage in the decision-making process. Hyperliquid has indicated that the foundation itself will “effectively abstain by voting for the team with the most non-Foundation votes based on validator commitments.” This approach aims to empower the community and ensure that the winning proposal reflects broader ecosystem support.
The outcome will determine which organization manages the platform’s stablecoin reserves, currently dominated by Circle’s USDC. The winning team will be responsible for deploying and overseeing USDH issuance while maintaining transparency and compliance with regulatory and community standards.
Implications for the Hyperliquid Ecosystem
The selection of a USDH issuer carries significant implications for Hyperliquid and its community. A successful partnership could enhance liquidity, strengthen trading pairs, and expand the exchange’s ecosystem. Conversely, a misaligned choice could invite operational challenges or community dissatisfaction.
Native Markets’ favorable odds, combined with a robust team and strategic proposal, position the startup as a strong candidate to manage USDH responsibly. The project’s emphasis on community alignment, compliance, and contribution to Hyperliquid’s Assistance Fund reflects an approach designed to balance growth and security.
Looking Ahead
As the vote approaches, all eyes are on Native Markets and the other bidders. The community and validators will play a pivotal role in shaping the future of Hyperliquid’s native stablecoin. While questions about fairness and favoritism persist, the process also highlights the dynamic nature of decentralized finance and the opportunities available to emerging players within the crypto ecosystem.
Hyperliquid’s USDH stablecoin initiative illustrates the evolving intersection of community governance, institutional involvement, and technical innovation in the crypto space. The winner of this bid will not only manage a significant financial asset but also set the tone for how decentralized exchanges and native stablecoins interact in the broader market.
