TLDR
- Ethena Labs submits proposal to become Hyperliquid’s USDH stablecoin issuer, joining five other major competitors
- The stablecoin would be backed by BlackRock’s BUIDL tokenized money market fund through Ethena’s USDtb token
- Ethena offers 95% revenue sharing with Hyperliquid ecosystem and $75-150 million in incentives
- Competition includes Paxos, Sky, Frax, Agora, and Native Markets for control of $400 billion trading platform
- Hyperliquid validators will vote on proposals September 14, with HYPE token hitting all-time highs
Ethena Labs has entered the heated competition to issue Hyperliquid’s native USDH stablecoin, making it the sixth major company vying for control of one of crypto’s fastest-growing derivatives platforms. The proposal puts Ethena’s BlackRock-backed reserves against established players in a race worth billions.
The decentralized exchange processed nearly $400 billion in perpetuals trading volume last month alone, making the USDH contract one of the most valuable prizes in DeFi. Hyperliquid validators will decide the winner through formal voting scheduled for September 14.
Ethena’s bid centers around its USDtb stablecoin, which is fully backed by BUIDL, BlackRock’s tokenized money market fund created with Securitize. The token is issued through Anchorage Digital, a federally chartered bank that provides institutional-grade backing.
“We are excited to enable Ethena’s USDtb, which is uniquely positioned to offer institutional grade cash management as well as on-chain liquidity to Hyperliquid users,” said Robert Mitchnick, BlackRock’s head of digital assets.
Revenue Sharing and Ecosystem Benefits
Ethena has committed to returning 95% of net revenue from USDH reserves directly to the Hyperliquid ecosystem. The protocol also pledged to cover all costs associated with migrating existing USDC trading pairs to the new USDH standard.
The company promised at least $75 million in ecosystem incentives, with potential to reach $150 million based on adoption metrics. This funding would support development and growth across Hyperliquid’s expanding DeFi infrastructure.
Beyond financial commitments, Ethena plans to bring tokenized funds and equities to HyperEVM through partnerships with Securitize. The proposal also includes launching hUSDe, a Hyperliquid-native synthetic dollar designed for the platform’s specific needs.
Fierce Competition from Established Players
Ethena faces strong competition from five other bidders, each offering different approaches to backing and revenue distribution. Sky (formerly MakerDAO) proposed a 4.85% yield structure, while Agora committed to returning 100% of reserve revenue to the community.
Native Markets submitted the first proposal but faced community pushback over its plan to use Stripe’s Bridge payment processor. Paxos and Frax Finance round out the competitive field with their own institutional backing approaches.
To address security concerns, Ethena suggested implementing a “guardian network” of selected Hyperliquid validators for USDH oversight. This distributed governance model would prevent single-point-of-failure risks while maintaining decentralized control.
Market Impact and Token Performance
The intense bidding competition has driven Hyperliquid’s native HYPE token to new all-time highs, reaching $55.04 as proposals rolled in. This represents strong market confidence in the platform’s growth trajectory and stablecoin adoption potential.
Ethena recently became the world’s third-largest stablecoin issuer behind Tether and Circle. Its USDe token reached $10 billion supply in under ten months, the fastest growth on record, and has since expanded to over $12.9 billion in market value.
The protocol emphasized that its Hyperliquid commitments remain firm regardless of the voting outcome. Ethena called the derivatives platform “one of the most impressive and important stories to emerge in the last 20 years.”
Validators will make their final decision after Hyperliquid’s next network upgrade, with the September 14 voting date approaching rapidly.
