Hyperliquid is rewriting the rules of stablecoin issuance. The protocol confirmed that the long-awaited USDH ticker will be assigned through an onchain validator vote.
The timeline is tight. Proposals close on September 10 at 10:00 UTC. Validators must declare support by September 11 at 10:00 UTC. The decisive onchain voting happens on September 14 between 10:00–11:00 UTC.
That means less than a week separates pitch decks from final governance power plays. And the contenders? Some of the biggest names in stablecoins, RWA custodians, and payment rails.
Nick van Eck’s $USDH Vision
The first serious proposal came from Nick van Eck, pitching USDH as Hyperliquid’s native stablecoin. The design outsources custody to State Street, which commands an eye-watering $49 trillion in assets under management. Revenue flows back into the system through community-driven HYPE buybacks.
Integration with Rain’s fiat ramps and LayerZero’s cross-chain bridges aims to unlock seamless global liquidity. The model positions Hyperliquid not just as a DEX but as a payments and RWA infrastructure powerhouse.
If executed correctly, the flywheel looks potent. But execution is everything. Risks loom from regulators circling the stablecoin sector and Tether’s dominance over the broader market.
Agora, Frax, Paxos, Circle: Heavy Hitters Enter the Arena
As soon as Hyperliquid dropped the announcement, the scene exploded.
Agora Alliance (@withAUSD) stepped forward with a proposal backed by Moonpay, LayerZero, RainCards, VanEck, and yes, State Street. A heavyweight coalition.
Frax Finance (@fraxfinance) joined the race, flexing its proven stablecoin infrastructure.
Paxos, the issuer behind Binance’s now-defunct BUSD, threw in what many consider the strongest proposal yet. The pitch? Send 95% of reserve interest revenue directly into HYPE buybacks. The irony of Paxos jumping ship from Binance to Hyperliquid wasn’t lost on the community.
Then came Circle. The company suddenly remembered that 8% of USDC’s supply sits on Hyperliquid. After fumbling a six-month head start, Circle rushed to announce native USDC support, scrambling just before proposal deadlines. Hyperliquid is already the top holder of USDC, making the timing all the more awkward.
New Challengers: Ethena Labs and Beyond
The momentum didn’t stop. Ethena Labs (@ethena_labs), creators of USDe, announced it would accelerate integration with Hyperliquid. That commitment only sharpened the stakes of the validator vote.
By this point, the community started crunching the math. Hyperliquid currently hosts around $5.5 billion worth of stablecoins. At a conservative 4% interest rate, those reserves could generate roughly $220 million annually in buybacks for HYPE.
No surprise, the HYPE token pumped as the market realized what was at play.
Validators, Musical Chairs, and the Kingmaker Exit
In this kind of governance war, votes are everything. And votes come from validators. Naturally, the power struggle quickly turned into a game of musical chairs. Delegators began shifting their stake to validators aligned with their preferred stablecoin proposal.
At one point, over $2 billion in stake was concentrated. But then, in a shock twist, @kinetiq_xyz bowed out entirely. They abstained from the vote, walking away from the role of kingmaker.
The absence of a central arbiter only intensified the chaos. Every proposal now has to scrap for support directly, validator by validator.
Observers noted the absurdity of it all. Hyperliquid managed to orchestrate a full-scale war among the biggest names in crypto with $0 spent on marketing. Just a Discord post triggered:
- VCs scrambling to back competing proposals.
- Validators reshuffling delegations.
- Tokens pumping as whales accumulated HYPE to secure more voting power.
It’s a masterclass in organic narrative-building.
As one user put it:
“This is 4D chess. Fade all the VCs until they’re tripping over each other to buy your token. All from a single Discord post.”
What’s at Stake
The validator vote isn’t just about a ticker. It’s about control of Hyperliquid’s monetary layer. Whoever wins the USDH contract controls the protocol’s native stablecoin. That means custody rights, interest revenue distribution, and a long-term lock on payments infrastructure.
The flywheel is clear:
- Stables flow in.
- Yield gets redirected into HYPE buybacks.
- More value accrues to token holders.
- Validators gain deeper influence.
- And the cycle repeats.
But so are the risks. Regulators remain unpredictable, especially around stablecoin custodians like Paxos and Circle. Tether’s stranglehold on global liquidity is also a major competitive hurdle. And with so many proposals, consensus may fracture instead of solidify.
Market Reactions
At the time of writing, the $HYPE token is enjoying a surge, powered by speculation around the validator vote. CoinMarketCap data confirms the pump, with volume spiking alongside delegation shifts. The added uncertainty is keeping traders glued to Discord updates, X posts, and validator dashboards.
Summary of the ABSOLUTE scenes in the $USDH wars happening right now:
– Hyperliquid posts that they will be releasing the $USDH ticker for purchase, with validators voting to allow the best proposal to win. USDH being the native, Hyperliquid aligned stable coin.
– Immediately,… pic.twitter.com/IYo7zbrrpE
— Stupifff (@Stupifff) September 8, 2025
The countdown is on. By September 14, validators will have chosen who gets to mint USDH, and by extension, who secures the economic engine of Hyperliquid.
This isn’t just another governance vote. It’s a battle for narrative dominance in the stablecoin wars. Hyperliquid’s move from DEX to RWA-plus-payments layer could redefine its trajectory for years.
And as validators line up, one fact is clear: the outcome won’t just decide USDH. It will decide Hyperliquid’s future.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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