On 8 September 2025, Hyperliquid announced that it will launch its own dollar-pegged stablecoin, USDH, through on-chain governance.

The move is designed to reduce reliance on Circle’s USDC and to create an internal, self-sustaining “blood-making” system. Issuance will be decided by community proposals and validator votes, with an explicit promise of regulatory compliance and decentralized oversight.

Within minutes of the news, the platform’s native token HYPE jumped 4 % to $47.63 before settling near $46. Traders applauded the narrative; critics immediately questioned the fairness of the ticker un-ban and the timing of candidate-team funding.

Whether USDH becomes a watershed moment or another governance drama, it is unmistakably the last puzzle piece in Hyperliquid’s bid to become a fully-fledged financial empire rather than “just another DEX.”

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From Upstart to Top-Tier DEX

Hyperliquid’s 2025 growth curve looks vertical.

According to DeFiLlama, the venue cleared $398 billion in perpetual-futures volume during August alone, plus another $200 billion in spot. On 25 August, its BTC/USDC pair briefly surpassed Coinbase and Bybit, a first for any decentralized platform.

Total value locked has followed the same trajectory: from $317 million in January to $2.5 billion by early September—an eight-fold expansion that has turned Hyperliquid into a primary liquidity sink for both retail and institutional flows.

Launching a proprietary stablecoin is therefore less a marketing stunt than a logical scaling decision: capture the float, internalize the spread, and recycle reserve yield back into the ecosystem.

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How USDH Will Be Born—A Governance-First Mint

Unlike USDT or USDC, USDH will not be summoned by a corporate boardroom.

The Foundation has permanently reserved the ticker “USDH” inside the Hyperliquid L1 genesis file. Any team can now submit a technical-and-compliance proposal covering custody, reserve composition, audit cadence, and on-chain attestations.

Validators will vote for five days; the winning team must then outbid rivals in the weekly “Spot-Deploy Gas Auction,” a blind-burn race that permissionlessly slots the contract into the order-book module.

Only after passing both hurdles can USDH go live. The two-step filter is meant to guarantee that the issuer is simultaneously (a) community-approved and (b) economically committed, a novel twist on the usual multi-sig mint.

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USDH vs. USDT/USDC—Same Dollar, Different DNA

| Dimension | USDT / USDC | USDH (Proposed) |

|-------------------------|---------------------------------------|--------------------------------------------------|

| Issuer | Centralized entity (Tether / Circle) | Team elected by validator vote |

| Reserve yield | Kept by issuer | Can be redirected to validators/community |

| Primary use-case | Universal settlement | Hyperliquid-native margin & spot quote currency |

| Transparency | Periodic attestations | Real-time on-chain proofs + elected auditor |

| Compliance | Varies by jurisdiction | Explicitly designed around U.S. GENIUS Act |

In short, USDH is not trying to replace the greenback everywhere; it wants to become the “in-house blood plasma” that lubricates leveraged trading, liquidation buffers, and liquidity mining—while still being redeemable 1:1 for greenbacks held in a regulated trust.

---

Instant Backlash—Ticker Reversal & “Pre-Loaded” Candidates

The announcement ignited controversy within hours.

Max, lead developer of Hyperstable, reminded the community that the Foundation had black-listed “USDH” six months earlier, forcing his protocol to launch under the ticker “USH.”

“Changing the rulebook after teams have spent months and seven-figure audits is the opposite of credible neutrality,” Max wrote on X, garnering thousands of likes.

A second flash-point involves Native Markets, whose deployer wallet received 50 k HYPE from a known Foundation hot-wallet only three hours before the blog post. Their proposal document—complete with Cayman trust structure and Fireblocks custody diagrams—looked suspiciously polished, fueling rumors of insider coordination.

Foundation contributors counter that the GENIUS Act’s passage materially alters the regulatory landscape, making the old blacklist obsolete, and that the inbound transfer was simply an arms-length ecosystem grant. The debate now sits at the heart of Hyperliquid’s governance forum, with voters demanding on-chain evidence and third-party audits before casting ballots.

---

The Broader Stablecoin Arms Race

Hyperliquid is hardly alone in wanting its own dollar.

MetaMask and M0 are beta-testing mmUSD; Stripe’s recent acquisition of Bridge is widely seen as a prelude to a Stripe-issued token; Coinbase has already ported USDC onto a half-dozen new L2s this year.

Aggregate stable-cap has swollen to $285 billion, up 5 % in the last seven days alone, according to DeFiLlama. Owning the contract means owning the float, the yield, and the data—an irresistible trifecta in a low-fee trading environment.

If USDH survives governance, Hyperliquid will plug the final hole in its balance-sheet loop: traders mint USDH to post margin, the reserve buys T-bills, interest flows back to validators, validators burn HYPE to boostrap spot pairs, deeper liquidity attracts more traders, who in turn need more USDH. A flywheel, sealed at the edges with dollar-denominated glue.

---

What Happens Next

The first governance sprint begins Monday, 15 September.

Proposals must be submitted by 12:00 UTC; the five-day validator vote closes on the 20th; the winning team will enter the following week’s gas auction. If no proposal secures >50 % of voting power, the cycle restarts.

Whatever the outcome, USDH has already achieved one thing: it has forced the industry to confront the question of whether “decentralized” exchanges can remain philosophically pure while racing to capture the same monetization levers as their centralized rivals.

The Empire has all but assembled itself; only the dollar is missing. In two weeks we will learn whether the community hands it over—or demands a different design entirely.

On 8 September 2025, Hyperliquid announced that it will launch its own dollar-pegged stablecoin, USDH, through on-chain governance.

The move is designed to reduce reliance on Circle’s USDC and to create an internal, self-sustaining “blood-making” system. Issuance will be decided by community proposals and validator votes, with an explicit promise of regulatory compliance and decentralized oversight.

Within minutes of the news, the platform’s native token HYPE jumped 4 % to $47.63 before settling near $46. Traders applauded the narrative; critics immediately questioned the fairness of the ticker un-ban and the timing of candidate-team funding.

Whether USDH becomes a watershed moment or another governance drama, it is unmistakably the last puzzle piece in Hyperliquid’s bid to become a fully-fledged financial empire rather than “just another DEX.”

---

From Upstart to Top-Tier DEX

Hyperliquid’s 2025 growth curve looks vertical.

According to DeFiLlama, the venue cleared $398 billion in perpetual-futures volume during August alone, plus another $200 billion in spot. On 25 August, its BTC/USDC pair briefly surpassed Coinbase and Bybit, a first for any decentralized platform.

Total value locked has followed the same trajectory: from $317 million in January to $2.5 billion by early September—an eight-fold expansion that has turned Hyperliquid into a primary liquidity sink for both retail and institutional flows.

Launching a proprietary stablecoin is therefore less a marketing stunt than a logical scaling decision: capture the float, internalize the spread, and recycle reserve yield back into the ecosystem.

---

How USDH Will Be Born—A Governance-First Mint

Unlike USDT or USDC, USDH will not be summoned by a corporate boardroom.

The Foundation has permanently reserved the ticker “USDH” inside the Hyperliquid L1 genesis file. Any team can now submit a technical-and-compliance proposal covering custody, reserve composition, audit cadence, and on-chain attestations.

Validators will vote for five days; the winning team must then outbid rivals in the weekly “Spot-Deploy Gas Auction,” a blind-burn race that permissionlessly slots the contract into the order-book module.

Only after passing both hurdles can USDH go live. The two-step filter is meant to guarantee that the issuer is simultaneously (a) community-approved and (b) economically committed, a novel twist on the usual multi-sig mint.

---

USDH vs. USDT/USDC—Same Dollar, Different DNA

| Dimension | USDT / USDC | USDH (Proposed) |

|-------------------------|---------------------------------------|--------------------------------------------------|

| Issuer | Centralized entity (Tether / Circle) | Team elected by validator vote |

| Reserve yield | Kept by issuer | Can be redirected to validators/community |

| Primary use-case | Universal settlement | Hyperliquid-native margin & spot quote currency |

| Transparency | Periodic attestations | Real-time on-chain proofs + elected auditor |

| Compliance | Varies by jurisdiction | Explicitly designed around U.S. GENIUS Act |

In short, USDH is not trying to replace the greenback everywhere; it wants to become the “in-house blood plasma” that lubricates leveraged trading, liquidation buffers, and liquidity mining—while still being redeemable 1:1 for greenbacks held in a regulated trust.

---

Instant Backlash—Ticker Reversal & “Pre-Loaded” Candidates

The announcement ignited controversy within hours.

Max, lead developer of Hyperstable, reminded the community that the Foundation had black-listed “USDH” six months earlier, forcing his protocol to launch under the ticker “USH.”

“Changing the rulebook after teams have spent months and seven-figure audits is the opposite of credible neutrality,” Max wrote on X, garnering thousands of likes.

A second flash-point involves Native Markets, whose deployer wallet received 50 k HYPE from a known Foundation hot-wallet only three hours before the blog post. Their proposal document—complete with Cayman trust structure and Fireblocks custody diagrams—looked suspiciously polished, fueling rumors of insider coordination.

Foundation contributors counter that the GENIUS Act’s passage materially alters the regulatory landscape, making the old blacklist obsolete, and that the inbound transfer was simply an arms-length ecosystem grant. The debate now sits at the heart of Hyperliquid’s governance forum, with voters demanding on-chain evidence and third-party audits before casting ballots.

---

The Broader Stablecoin Arms Race

Hyperliquid is hardly alone in wanting its own dollar.

MetaMask and M0 are beta-testing mmUSD; Stripe’s recent acquisition of Bridge is widely seen as a prelude to a Stripe-issued token; Coinbase has already ported USDC onto a half-dozen new L2s this year.

Aggregate stable-cap has swollen to $285 billion, up 5 % in the last seven days alone, according to DeFiLlama. Owning the contract means owning the float, the yield, and the data—an irresistible trifecta in a low-fee trading environment.

If USDH survives governance, Hyperliquid will plug the final hole in its balance-sheet loop: traders mint USDH to post margin, the reserve buys T-bills, interest flows back to validators, validators burn HYPE to boostrap spot pairs, deeper liquidity attracts more traders, who in turn need more USDH. A flywheel, sealed at the edges with dollar-denominated glue.

---

What Happens Next

The first governance sprint begins Monday, 15 September.

Proposals must be submitted by 12:00 UTC; the five-day validator vote closes on the 20th; the winning team will enter the following week’s gas auction. If no proposal secures >50 % of voting power, the cycle restarts.

Whatever the outcome, USDH has already achieved one thing: it has forced the industry to confront the question of whether “decentralized” exchanges can remain philosophically pure while racing to capture the same monetization levers as their centralized rivals.

The Empire has all but assembled itself; only the dollar is missing. In two weeks we will learn whether the community hands it over—or demands a different design entirely.