The Stakes
Hyperliquid is handing its community the keys to a money-printing machine.
Instead of appointing a single partner, the protocol will let HYPE token-holders vote on who gets to issue USDH, the exchange’s forthcoming native stablecoin. With ~US-$5.7 billion of stable-value tokens already circulating on HyperEVM—and 95 % of that still freeze-able USDC—the winner will instantly inherit one of crypto’s deepest liquidity pools.

The Contenders (so far)

1. Paxos – “The Regulatory Fortress”

   • Full GENIUS Act / MiCA compliance from day one; global banking rails and on/off-ramps included.

   • Promises to return 95 % of reserve interest to the Hyperliquid treasury—via open-market HYPE buy-backs.

   • Wild-card: Paxos just acquired Molecular Labs, the team behind LHYPE and WHLP tokens, giving it inside knowledge of the chain’s tokenomics.

2. Frax – “The 100 % Give-Back”

   • USDH will be a 1-to-1 re-brand of frxUSD, already backed by tokenized T-bills.

   • Pledges zero fees and 100 % of reserve yield to Hyperliquid; multi-chain out of the box (Fraxtal, Arbitrum, BNB, etc.) while still native on HyperEVM.

   • Message to voters: “We monetize elsewhere—USDH is a public good.”

3. fiege_max – “The Cross-Chain Humanitarian”

   • Offers globally compliant USDH that can be minted on HyperEVM and moved via HyperCore from block one.

   • A “meaningful slice” of yield will fund an on-chain aid treasury for open-source grants.

   • Pitch: “Issuance with a conscience, not just a coupon.”

4. withAUSD – “The Decentralization Coalition”

   • Builds on a consortium of agora, Rain Cards, LayerZero and VanEck to minimize single-counter-party risk.

   • Net income (interest + float) routed 100 % to either the aid fund or HYPE buy-backs—community vote decides each quarter.

   • Tag-line: “Compliance without centralization.”

What Actually Moves the Needle?

• Yield split – Most bidders cluster at 95-100 %; five percentage points probably won’t swing the election.

• Compliance vs. Censorship – Regulated issuers bring fiat rails and the power to freeze. Will voters trade decentralization for convenience?

• Multi-chain reach – USDH must be friction-less on Arbitrum, Solana, and Binance Smart Chain if Hyperliquid wants to suck in external margin.

• Reputation – A single black-swan freeze (or de-peg) could sink the exchange’s credibility; track record matters.

Wild Cards Still on the Sidelines

• Ethena – Has the tech and the community, but is viewed as a direct competitor to Hyperliquid’s perpetual engine; bidding could spark “hostile” optics.

• Circle – The elephant in the room. Quiet so far, but a surprise last-minute proposal would instantly raise the bar on compliance and liquidity.

• PayPal, M0, Sky (ex-Maker) – All have the balance-sheets and regulatory licenses; watch for “dark-horse” entries before the 10 September deadline.

• Internal build – Some voices want the Foundation to hard-code USDH as a non-custodial, over-collateralized stable asset. Insiders say that’s unlikely; Hyperliquid prefers to stay an exchange, not a mint.

Timeline & How to Vote

• Proposal cut-off: 10 Sept 2025, 23:59 UTC.

• Community review: 11-13 Sept (public forum & AMAs).

• Snapshot vote: 14-16 Sept (HYPE held on HyperEVM or delegated stake).

• Winner announcement: 17 Sept—just in time for the Fed-week volatility.

Whatever the outcome, the mere contest has already done what no marketing budget could: turn a technical necessity into a community spectacle. May the best stablecoin win.

The Stakes
Hyperliquid is handing its community the keys to a money-printing machine.
Instead of appointing a single partner, the protocol will let HYPE token-holders vote on who gets to issue USDH, the exchange’s forthcoming native stablecoin. With ~US-$5.7 billion of stable-value tokens already circulating on HyperEVM—and 95 % of that still freeze-able USDC—the winner will instantly inherit one of crypto’s deepest liquidity pools.

The Contenders (so far)

1. Paxos – “The Regulatory Fortress”

   • Full GENIUS Act / MiCA compliance from day one; global banking rails and on/off-ramps included.

   • Promises to return 95 % of reserve interest to the Hyperliquid treasury—via open-market HYPE buy-backs.

   • Wild-card: Paxos just acquired Molecular Labs, the team behind LHYPE and WHLP tokens, giving it inside knowledge of the chain’s tokenomics.

2. Frax – “The 100 % Give-Back”

   • USDH will be a 1-to-1 re-brand of frxUSD, already backed by tokenized T-bills.

   • Pledges zero fees and 100 % of reserve yield to Hyperliquid; multi-chain out of the box (Fraxtal, Arbitrum, BNB, etc.) while still native on HyperEVM.

   • Message to voters: “We monetize elsewhere—USDH is a public good.”

3. fiege_max – “The Cross-Chain Humanitarian”

   • Offers globally compliant USDH that can be minted on HyperEVM and moved via HyperCore from block one.

   • A “meaningful slice” of yield will fund an on-chain aid treasury for open-source grants.

   • Pitch: “Issuance with a conscience, not just a coupon.”

4. withAUSD – “The Decentralization Coalition”

   • Builds on a consortium of agora, Rain Cards, LayerZero and VanEck to minimize single-counter-party risk.

   • Net income (interest + float) routed 100 % to either the aid fund or HYPE buy-backs—community vote decides each quarter.

   • Tag-line: “Compliance without centralization.”

What Actually Moves the Needle?

• Yield split – Most bidders cluster at 95-100 %; five percentage points probably won’t swing the election.

• Compliance vs. Censorship – Regulated issuers bring fiat rails and the power to freeze. Will voters trade decentralization for convenience?

• Multi-chain reach – USDH must be friction-less on Arbitrum, Solana, and Binance Smart Chain if Hyperliquid wants to suck in external margin.

• Reputation – A single black-swan freeze (or de-peg) could sink the exchange’s credibility; track record matters.

Wild Cards Still on the Sidelines

• Ethena – Has the tech and the community, but is viewed as a direct competitor to Hyperliquid’s perpetual engine; bidding could spark “hostile” optics.

• Circle – The elephant in the room. Quiet so far, but a surprise last-minute proposal would instantly raise the bar on compliance and liquidity.

• PayPal, M0, Sky (ex-Maker) – All have the balance-sheets and regulatory licenses; watch for “dark-horse” entries before the 10 September deadline.

• Internal build – Some voices want the Foundation to hard-code USDH as a non-custodial, over-collateralized stable asset. Insiders say that’s unlikely; Hyperliquid prefers to stay an exchange, not a mint.

Timeline & How to Vote

• Proposal cut-off: 10 Sept 2025, 23:59 UTC.

• Community review: 11-13 Sept (public forum & AMAs).

• Snapshot vote: 14-16 Sept (HYPE held on HyperEVM or delegated stake).

• Winner announcement: 17 Sept—just in time for the Fed-week volatility.

Whatever the outcome, the mere contest has already done what no marketing budget could: turn a technical necessity into a community spectacle. May the best stablecoin win.