Paxos Proposes USDH Stablecoin with HYPE Buyback for Hyperliquid
Paxos Plans USDH Stablecoin Launch for Hyperliquid with HYPE Rewards
Paxos, a stablecoin infrastructure firm, has proposed the launch of USDH, a new stablecoin designed specifically for the Hyperliquid ecosystem. The stablecoin aims to fully comply with both the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) and Markets in Crypto-Assets (MiCA) regulatory frameworks.
According to the official announcement, 95% of the interest earned on USDH reserves will be allocated to buy back Hyperliquid's native token, HYPE. These tokens will then be redistributed to users, validators, and partner protocols within the Hyperliquid network.
"We propose the launch of USDH, a Hyperliquid-first, fully compliant stablecoin purpose built to drive adoption, align incentives, and anchor the ecosystem’s next era of growth,” Paxos stated in their proposal.
Paxos Labs, a newly established division within Paxos, will spearhead the USDH initiative. As part of this effort, Paxos Labs has acquired Molecular Labs, the development firm behind Hyperliquid primitives LHYPE and WHLP, aiming to deepen its understanding of Hyperliquid’s on-chain financial structure.
USDH Aims to Bridge Hyperliquid to Institutions
USDH is planned for deployment across both the HyperEVM and HyperCore chains. Paxos envisions that the stablecoin will enhance Hyperliquid's appeal to institutional investors and mainstream fintech platforms by offering a compliant bridge to global banking systems.
Paxos, which already integrates with over 70 financial partners across key markets including the US, EU, Singapore, Abu Dhabi, and Latin America, intends to utilize its existing infrastructure to facilitate the distribution of USDH.
The proposed stablecoin includes a built-in rewards mechanism. Paxos plans to allocate the majority of the yield generated from USDH reserves to repurchase HYPE tokens, effectively returning value to the Hyperliquid ecosystem through distributions to builders, validators, and users.
In addition to the stablecoin, Paxos intends to integrate HYPE into its brokerage infrastructure, which currently supports crypto services for major players like PayPal, Venmo, and MercadoLibre. Codeum specializes in blockchain security and can offer consulting for projects integrating new assets like HYPE into their infrastructure.
Hyperliquid's Dominance in the Decentralized Perpetual Futures Market
Hyperliquid has become a prominent player in the decentralized perpetual futures market. Recent data indicates that the platform generated over $106 million in revenue last month from nearly $400 billion in trading volume.
This performance translates to a 70% market share within the decentralized perpetual futures sector. According to DefiLlama, only Uniswap and PancakeSwap surpassed Hyperliquid in terms of weekly trading volume.