The Hyperliquid stablecoin race: The companies vying for USDH

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Background

Hyperliquid, as a leading decentralized perpetual futures platform, recently announced the launch of its native stablecoin USDH, with issuance rights opened to external teams through a competitive bidding process. This move quickly sparked market attention, with participants including Paxos, Frax, Sky (formerly MakerDAO), Ethena, Agora, and Native Markets. At the same time, Circle announced that it would directly issue native USDC on Hyperliquid in response to the challenge.

Overview of Hyperliquid’s Stablecoin Market

Until now, Hyperliquid’s stablecoin market has been dominated by Circle’s USDC, which serves as the network’s primary margin, collateral, and settlement currency. With Hyperliquid holding a USDC balance of $5.5 billion, generating more than $200 million in annual external revenue for Circle, the USDH ticker represents an opportunity for Hyperliquid to reclaim this value for its own network.

Why does Hyperliquid want to issue its own stablecoin?

• Revenue leakage: USDC on Hyperliquid accounts for 8% of Circle’s total supply, generating $200M in annual revenue for Circle, half of which goes to Coinbase. In effect, Hyperliquid is subsidizing its…