TLDR
- Ethena has submitted a proposal to issue Hyperliquid’s USDH stablecoin, becoming the sixth company to bid for the contract
- The proposed token would be backed by Ethena’s USDtb, which is supported by BlackRock’s BUIDL tokenized money market fund
- Ethena promises to return 95% of net revenue from USDH reserves to the Hyperliquid ecosystem
- Other bidders include Paxos, Sky, Frax, Agora, and Native Markets, with validators set to vote on September 14
- Hyperliquid processed nearly $400 billion in perpetuals trading volume last month, making it an attractive market for stablecoin providers
Ethena Labs announced Tuesday its proposal to issue Hyperliquid’s upcoming USDH stablecoin. The decentralized finance protocol joins five other companies competing for the contract to provide the stablecoin for one of DeFi’s fastest-growing derivatives exchanges.
USDH proposal live on @HyperliquidX Discord.
The Hyperliquid community deserves proven execution in stablecoin scaling.
Should we win, we will do everything we can to ensure USDH can be as successful as USDe and USDtb.
Read more ↓https://t.co/Gqp3Ul2BlH pic.twitter.com/YiVsuLErB1
— Ethena Ecosystem (@Ethena_Eco) September 9, 2025
The competition has attracted major players including Paxos, Sky (formerly MakerDAO), Frax Finance, Agora, and Native Markets. Each company has submitted proposals to win the right to issue USDH for Hyperliquid’s ecosystem.
Ethena’s proposal centers around its USDtb token as the backing asset. USDtb is issued through federally chartered bank Anchorage Digital and is fully backed by BUIDL. BUIDL is BlackRock’s tokenized money market fund created in partnership with Securitize.
Robert Mitchnick, BlackRock’s head of digital assets, expressed support for the proposal. He said USDtb is positioned to offer institutional-grade cash management and on-chain liquidity to Hyperliquid users.
Revenue Sharing and Migration Costs
Ethena has committed to returning 95% of net revenue from USDH reserves to the Hyperliquid ecosystem. This revenue-sharing model aims to benefit the broader community rather than keeping profits centralized.
The protocol also pledged to cover costs for migrating existing USDC trading pairs to USDH. This commitment could ease the transition for current Hyperliquid users and traders.
Ethena promised at least $75 million in ecosystem incentives. The company said this figure could potentially reach $150 million depending on adoption and performance.
The proposal includes partnerships with Securitize to bring tokenized funds and equities to HyperEVM. Ethena also plans to launch a Hyperliquid-native synthetic dollar called hUSDe.
Security and Governance Measures
To address security concerns, Ethena suggested oversight through selected Hyperliquid validators. This “guardian network” would handle USDH oversight rather than leaving control solely with the issuer.
The protocol emphasized that its commitments to Hyperliquid are not conditional on winning the bid. Ethena called Hyperliquid “one of the most impressive and important stories to emerge in the last 20 years.”
Market Context and Competition
Hyperliquid processed almost $400 billion in perpetuals trading volume last month. This massive volume makes it an attractive market for stablecoin providers seeking to establish their presence.
The exchange’s success has drawn attention from multiple stablecoin issuers. Each bidder has proposed different backing mechanisms and revenue-sharing arrangements.
Native Markets was the first to submit a proposal, planning to use Stripe’s stablecoin payment processor Bridge. However, this proposal faced pushback from the community.
Sky proposed a USDH backed by its resources with a 4.85% yield. Agora offered to return 100% of USDH reserve revenue to the Hyperliquid community.
Recent Market Performance
Ethena recently became the world’s third-largest stablecoin issuer behind Tether and Circle. Its USDe token surpassed $10 billion in supply in under ten months, setting a speed record.
USDe has grown to over $12.9 billion in market value according to Token Terminal data. This rapid growth demonstrates Ethena’s capabilities in the stablecoin market.
As bidding intensified, Hyperliquid’s native token HYPE reached an all-time high of $55.04 on Tuesday. Validators will hold a formal vote after Hyperliquid’s next network upgrade, with the voting date scheduled for September 14.
