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Native Markets Secures Control of USDH Stablecoin, Driving DeFi Liquidity Growth
Native Markets has emerged victorious in a fiercely contested race to issue Hyperliquid’s new USDH stablecoin, marking a major milestone for the young decentralized finance startup. The decision follows a validator-led governance vote, granting Native Markets exclusive control over a stablecoin expected to channel billions in liquidity through the Hyperliquid exchange.
A Contested Race with Major Competitors
The USDH competition, launched by Hyperliquid on September 5, invited proposals for a Hyperliquid-first stablecoin aimed at reducing reliance on USDC and USDT. Eight teams, including established issuers like Paxos and Frax, competed for the opportunity.
Despite being newly formed, Native Markets, led by co-founder Max Fiege and a group of seasoned DeFi veterans, secured over 70% of validator support by the end of voting. Fiege confirmed the outcome on September 14, capping a nine-day process that highlighted the intense competition for control over Hyperliquid’s fast-growing markets.
USDH Issuance and Revenue Model
The USDH proposal plans to deploy both HIP-1 and ERC-20 versions directly on HyperEVM. Reserves will be split between on-chain partners like Superstate and off-chain custodians such as BlackRock.
Half of the reserve yield will be used for HYPE token buybacks, while the remainder will fund ecosystem development. Analysts estimate that the structure could generate hundreds of millions of dollars annually, benefiting both the Hyperliquid community and the issuer.
Community Reaction and Next Steps
The decision was not without controversy. Some critics, including Haseeb Qureshi of Dragonfly, argued that larger, more established institutions submitted stronger bids, while others raised concerns about validator concentration, noting that one wallet controlled 15% of the delegated stake.
Fiege has announced plans to begin capped mint and redeem tests at $800 per transaction, with USDH/USDC spot markets and API access for high-volume traders launching shortly thereafter. Meanwhile, Circle has already announced native USDC deployment on Hyperliquid, signaling a new era of stablecoin competition.
DeFi Implications
Native Markets’ win represents a turning point for Hyperliquid, emphasizing the power of validator-led governance in shaping billion-dollar DeFi markets. The outcome underscores the growing influence of community-driven decision-making, even amid ongoing debates about decentralization and fairness.
