Hyperliquid Eyes USDH Upgrade as Paxos, Agora & Frax Pitch Infrastructure

Hyperliquid, a leading decentralized exchange, is set to launch its native stablecoin, USDH, in 2025, attracting fierce competition from Paxos, Agora, and Frax Finance to provide its infrastructure. Announced on September 6, 2025, the initiative aims to reduce Hyperliquid’s reliance on USDC, which holds $5.5 billion in platform deposits, and boost ecosystem growth. Each bidder offers unique strengths, with validators set to choose the winner via on-chain vote, followed by a gas auction.

Paxos, a regulated stablecoin issuer, proposes a USDH compliant with U.S. GENIUS Act and Europe’s MiCA, leveraging its $160 billion issuance track record. Its plan allocates 95% of USDH reserve interest to buy back Hyperliquid’s HYPE token, redistributing value to users and validators. Paxos Labs, bolstered by acquiring Molecular Labs, ensures seamless integration with HyperEVM and HyperCore.

Agora, led by Nick van Eck, pitches a Hyperliquid-native USDH backed by institutional infrastructure, Rain’s global card coverage, and LayerZero’s interoperability. Promising 100% net revenue to Hyperliquid’s Assistance Fund or HYPE buybacks, Agora emphasizes neutrality, avoiding competition with Hyperliquid’s ecosystem.

Frax Finance offers a community-driven USDH, backed 1:1 by its frxUSD and BlackRock’s BUIDL treasury fund. It commits to forwarding 100% of treasury yields—potentially $220 million annually—to Hyperliquid users, with seamless redemption across USDC, USDT, and fiat.

This competition could reshape DeFi stablecoin dynamics, enhancing liquidity and regulatory clarity. Analysts predict USDH’s adoption may stabilize prices and boost Hyperliquid’s 70% DeFi perpetuals market share. The validator-driven selection ensures a robust, community-aligned stablecoin, setting a new standard for DeFi infrastructure.