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Sky, formerly known as Maker, has stepped into the competition to issue and manage Hyperliquid’s planned stablecoin USDH, becoming the fifth major crypto protocol to present a proposal. The move underscores growing interest among established projects to secure a role in one of the most anticipated stablecoin initiatives in decentralized finance.
Sky’s Proposal to Hyperliquid
On September 8, Sky co-founder Rune Christensen outlined his project’s pitch to the Hyperliquid community. According to Christensen, Sky could provide USDH with a customizable structure, competitive yields, and cross-chain capabilities powered by LayerZero.
Christensen emphasized that Hyperliquid would benefit from Sky’s existing infrastructure, noting that no other bidder could match the combined stability and yield potential on offer.
“By using Sky to power USDH, the Hyperliquid community will gain unbeatable advantages that no other stablecoin project can offer,” Christensen wrote.
Background on Sky and Stablecoin Development
Sky is best known as the protocol behind two widely used stablecoins: USDS and DAI, currently the fourth- and fifth-largest stablecoins by market capitalization. Together, they account for about $12.5 billion in value circulating across the crypto ecosystem.
With its experience managing large-scale stable assets, Sky believes it can provide Hyperliquid with a stablecoin that is both institution-ready and attractive to retail users.
Yield Incentives and Compliance Options
One of the standout elements in Sky’s proposal is yield. Christensen suggested that USDH could generate a 4.85% return for all tokens held on the Hyperliquid platform. This figure is above the U.S. Treasury bill rate, making it a compelling option for stablecoin holders seeking consistent income.
In addition, USDH would be able to convert directly to a version of USDS that offers a 4.75% yield. The proposal also emphasizes flexibility: the Hyperliquid community could tailor the stablecoin to comply with regulatory frameworks such as the GENIUS Act. This U.S. law restricts stablecoin issuers from paying yield, and compliance could make USDH more attractive for institutional adoption in regulated markets.
Support for DeFi Expansion on Hyperliquid
Beyond stablecoin mechanics, Sky has pledged $25 million to develop a project aimed at autonomously growing DeFi on Hyperliquid. According to Christensen, the initiative would issue exclusive tokens designed to attract liquidity and engagement, potentially “bringing in billions” to the network.
This part of the proposal signals Sky’s interest not only in supporting USDH but also in strengthening Hyperliquid’s entire decentralized finance ecosystem.
Competitive Field of Proposals
Sky’s entry marks the fifth proposal submitted to Hyperliquid’s validators since the community opened the floor to stablecoin providers. The call for proposals was posted last Friday, inviting teams to design a Hyperliquid-first stablecoin with the ticker USDH.
Other bidders include:
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Native Markets, a new project set up by Hyperliquid advocate Max Fiege, proposing to partner with Stripe’s stablecoin payment processor Bridge.
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Frax, a well-established stablecoin protocol with a hybrid model.
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Paxos, the regulated stablecoin issuer behind PayPal USD (PYUSD).
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Agora, a crypto infrastructure firm supported by fintech company MoonPay.
VanEck CEO Weighs In
Adding further intrigue, Jan van Eck, CEO of investment giant VanEck and father of Agora co-founder Nick van Eck, publicly voiced support for his son’s project. Writing on X, van Eck appealed to the Hyperliquid community to consider Agora’s proposal while also expressing frustration at the intensity of competition.
“We’d be thrilled to be a part of your community’s ecosystem,” van Eck said. “But we don’t like being gang-tackled. You wouldn’t want us as a partner if we were pushed around easily.”
His comments reflect both the high stakes and the competitive nature of the bidding process.
What Comes Next for USDH
The Hyperliquid network has not yet announced a date for its next upgrade, after which validators are expected to vote on their preferred proposal. The outcome will determine which protocol will manage USDH issuance and integration across the ecosystem.
With five heavyweight projects now in the mix, the decision will shape not just the future of USDH but also Hyperliquid’s position in the wider DeFi and stablecoin markets.
Conclusion
Sky’s bid to support USDH highlights the protocol’s ambition to remain a central player in the evolving stablecoin landscape. By offering high yields, compliance flexibility, and direct investment into Hyperliquid’s DeFi ecosystem, the proposal aims to set Sky apart from competitors.
As the community prepares to evaluate the options, USDH has already succeeded in attracting attention from some of the most influential projects in crypto. The eventual decision could become a defining moment for Hyperliquid and its role in the next stage of decentralized finance.
