Paxos Proposes USDH Stablecoin to Boost Hyperliquid Ecosystem

TLDR

• Paxos has proposed the launch of USDH, a stablecoin designed for the Hyperliquid ecosystem.
• USDH will comply fully with the GENIUS Act and the MiCA regulatory framework.
• Paxos Labs will lead the initiative following its acquisition of Molecular Labs.
• The stablecoin will be deployed across both HyperEVM and HyperCore chains.
• Paxos will use 95% of USDH reserve interest to buy back the HYPE token.

Paxos has submitted a proposal to launch USDH, a Hyperliquid-native stablecoin designed to meet US and EU regulations. The firm confirmed the stablecoin would comply with the GENIUS Act and MiCA standards. Paxos aims to anchor Hyperliquid’s future growth by integrating USDH into its existing global infrastructure.

USDH to Drive Value Into Hyperliquid Ecosystem

Paxos said USDH would serve as a fully compliant, Hyperliquid-first stablecoin built to grow the ecosystem. Paxos Labs, a new arm of the firm, will lead this stablecoin initiative for Hyperliquid integration. As part of this, Paxos acquired Molecular Labs, the builder of LHYPE and WHLP.

The firm stated USDH would be deployed across both HyperEVM and HyperCore chains for wide accessibility. Paxos plans to route 95% of USDH reserve interest to buy back Hyperliquid’s native token HYPE. The repurchased tokens will then be redistributed to users, validators, and partner protocols.

According to Paxos, “USDH will align incentives and strengthen Hyperliquid’s core through targeted liquidity and value redistribution.” The firm expects this mechanism to directly reward ecosystem participants. It believes this will support Hyperliquid’s continued growth across DeFi platforms.

Paxos Strengthens Market Position Through USDH

Paxos already works with over 70 financial institutions in markets such as the US, EU, Singapore, and Abu Dhabi. The firm will use this reach to distribute USDH and connect it to traditional banking systems. Paxos sees this as a bridge to global regulatory clarity for the Hyperliquid platform.

Paxos confirmed it would integrate HYPE into its brokerage infrastructure powering PayPal, Venmo, and MercadoLibre services. The firm emphasized that USDH offers an institutional-grade product backed by strong compliance and infrastructure. It views the stablecoin as a key element for fintech platforms eyeing regulated DeFi access.

With Hyperliquid now handling over $400 billion in monthly volume, Paxos wants to tap this liquidity. The platform generated $106 million in revenue last month, giving it a 70% market share in perpetuals. Paxos aims to support this momentum through compliant stablecoin infrastructure.

Rewards Mechanism Targets Builders and Validators

Paxos outlined a reward model that returns most reserve yield back to the Hyperliquid community. The firm confirmed HYPE buybacks would directly support builders, validators, and users through periodic distributions. It expects this model to incentivize ongoing innovation across the chain.

Paxos emphasized that USDH is not only a stablecoin but a growth tool for Hyperliquid’s financial architecture. It also revealed plans to expand this model across both HyperEVM and HyperCore environments. This dual deployment is intended to capture both native and EVM-based users.

By leveraging its regulatory foothold, Paxos believes it can offer USDH as a trusted alternative for institutions. The firm stated that this proposal is aimed at fostering a sustainable and incentivized DeFi framework. It sees USDH as a compliant on-ramp for institutional-grade digital finance.

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