Ethena Joins $5B Hyperliquid USDH Stablecoin Race With BlackRock-Tied Proposal
Ethena Labs has become the sixth bidder looking to handle the $5 billion launch of Hyperliquid’s USDH stablecoin after submitting a proposal that involves asset management giant BlackRock.
In a blog post, Ethena Labs proposed launching a version of USDH that is backed entirely by USDTb, the project’s stablecoin that is 100% backed by BlackRock’s BUIDL fund. This token will also be issued through Anchorage Digital Bank on Oct. 1.
Through that structure, Ethena Labs argues that USDH benefits from a combination of institutional credibility with compliance and scalability.
The team went on to highlight how it has already been able to mint more than $23 billion of tokenized dollar assets without any downtime.
“We are excited to enable Ethena’s USDtb, which is 100% backed by BUIDL and uniquely positioned to offer institutional grade cash management as well as on-chain liquidity to Hyperliquid users,” BlackRock’s Head of Digital Assets Robert Mitchnick said in the proposal.
Ethena Says It Will Deploy 95% Of The Net Revenue To The Hyperliquid Community
In its proposal, Ethena said that it would “deploy at least 95% of the net revenue generated via USDH reserves” for the “benefit of the Hyperliquid community.”
Those revenues, the team said, will either be deployed in the form of “HYPE purchases and contributions to the Assistance Fund, HYPE purchases and distributions to all validators, and other means that may be considered preferred by the community.”
The team added that it will “cover all transaction costs for migration of USDC to USDH” if Hyperliquid community members and validators want to “redenominate the current quote pairs on the core exchange into USDH from USDC.”
In addition to that, Ethena Labs said that it will also submit a proposal to the Ethena Risk Committee to add USDH as a backing asset for USDe.
If that proposal is approved, Ethena said it will offer a “special fee tier” to large traders and market makers who want to swap USD Coin (USDC) and Tether’s USDT.
The protocol said it will commit at least $75 million in ecosystem incentives as well, adding that this figure could rise to $150 million.
Ethena’s bid comes after it claimed the position of the third-largest stablecoin issuer, only behind Tether and Circle. In under ten months, the supply of its USDe token surpassed $10 billion.
Top five stablecoins by market cap (Source: CoinMarketCap)
Other Bidders Have Also Submitted Proposals For Hyperliquid’s USDH Stablecoin
Hyperliquid announced on Friday the opening of a community process to vote on an issuer for its USDH stablecoin.
With the vote deciding who controls billions of dollars in liquidity and revenue on one of decentralized finance’s fastest-growing derivatives exchanges, several projects have submitted proposals to facilitate USDH’s launch.
The first proposal was submitted by Native Markets, which proposed that USDH be issued via Stripe’s stablecoin payment processor, Bridge. However, this proposal was met with a lot of pushback from the Hyperliquid community.
There have also been proposals from Paxos, Frax Finance, and Agore. The most recent one was submitted by Sky (formerly MakerDAO).
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