Hyperliquid’s USDH Showdown: Paxos, Frax, Agora Lock Horns Over HYPE Stablecoin Launch
As Hyperliquid moves to launch its stablecoin USDH, service providers including Paxos, Frax, and Agora are going head-to-head for the chance to facilitate the rollout.
According to a Discord post from the project, the goal behind USDH is to launch a “Hyperliquid-first, Hyperliquid-aligned, and compliant USD stablecoin.”
Hyperliquid says that it has already reserved the USDH ticker, and invited teams to submit proposals. The winning proposal, which will be determined through a validator vote, will receive the approval to purchase the ticker and issue the token.
HYPE’s price jumped over 12% in the last 24 hours as the battle to launch USDH heats up.
HYPE price chart (Source: CoinMarketCap)
Paxos, Frax, And Agora All Want To Handle USDH Launch
Stablecoin issuer Paxos, which has been active since 2018, is among the entities that want to facilitate USDH’s launch. Paxos has already launched stablecoins for both PayPal and Binance.
In its proposal, Paxos said that its newly-formed Paxos Labs team would handle the Hyperliquid stablecoin. Launched in June, the Paxos Labs team was created to accelerate the adoption of stablecoins in decentralized venues.
In its bid, the issuer said that the USDH stablecoin will comply with both the MiCA framework and the GENIUS Act. Paxos Labs also said it will offer a significant revenue share, with 95% of interest going towards HYPE token buybacks. This HYPE will then be redistributed to “ecosystem initiatives, partners and users,” the proposal added.
“Additionally we plan to add support for HYPE as an asset within Paxos’s brokerage infrastructure which powers crypto trading for platforms such as PayPal, Venmo, MercadoLibre, Nubank, Interactive Brokers and many others,” the issuer wrote.
Another proposal was submitted by Frax, which launched its own frxUSD stablecoin earlier this year. The project said that it will offer USDH 1:1 backing with frxUSD, which is backed by BlackRock’s yield-bearing BUIDL on-chain treasury fund.
Frax framed its proposal as “community-first,” and said that “100% of the underlying Treasury yield” would be forwarded to Hyperliquid users “with zero Frax take rate.” The project will also offer USDH “smooth mint/redeem across frxUSD, USDC, USDT and fiat,” the team added.
Stablecoin builder Agora, which raised $50 million in a Series A funding round, formed a coalition for its bid.
Agora promised that if selected, USDH would “be powered by Agora’s institutional stablecoin infrastructure, Rain’s global card & on/offramp coverage, and LayerZero’s interoperability.”
Agora also said it will share “100% of net revenue” with Hyperliquid. These funds will then be put toward HYPE token buybacks as well.
Hyperliquid Community Pushes Back Against Possible Stripe Control
Among the bids was one tied to Stripe’s Bridge platform.
Some members of the Hyperliquid community pushed back against that proposal, and warned that it could hand over control of Hyperliquid’s monetary layer to the payments giant if approved.
Stripe is already building its own blockchain called Tempo, and currently controls Hyperliquid wallet infrastructure following its acquisition of Privy. If the Stripe-linked proposal is selected, it could see Hyperliquid cede economic sovereignty to a competitor, according to the community.
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