Ethena joins Paxos, Frax, Agora, Native Markets and Sky in the race to issue Hyperliquid’s USDH, a mandate tied to $5 billion in liquidity.
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Ethena Labs became the sixth bidder for Hyperliquid’s USDH stablecoin, announcing its proposal in a Tuesday blog . The competition will decide who controls billions in liquidity and revenue on one of decentralized finance’s (DeFi) fastest-growing derivatives exchanges.
The team behind USDe and USDtb is proposing a version of USDH backed entirely by USDtb, a stablecoin tied to BlackRock’s BUIDL fund and soon to be issued through . If selected, Ethena has pledged to return 95% of reserve revenue to the Hyperliquid community and implement safeguards through an elected validator “guardian network.”
The protocol has also promised to cover the costs of migrating Hyperliquid’s markets from USDC to USDH and committed at least $75 million in ecosystem incentives, a figure it said could rise to $150 million.
Ethena’s plan includes partnerships with Securitize to bring tokenized funds and equities to HyperEVM and launch a Hyperliquid-native synthetic dollar called hUSDe. It also proposed instant liquidity routes through its existing stablecoin infrastructure.
To address security risks, Ethena suggested that USDH oversight be handled by selected Hyperliquid validators, a “guardian network,” rather than leaving control solely with the issuer.
Ethena’s bid follows , Frax Finance, Agora, Native Markets and Sky (formerly MakerDAO).
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Hyperliquid announced on Friday the opening of a community process to select an issuer for USDH.
The proposal came from Native Markets, a venture founded by Hyperliquid advocate Max Fiege. The plan would see USDH issued through Stripe’s stablecoin payment processor, Bridge, but it has met with significant .
The most recent proposal before Ethena was from crypto protocol Sky. On Monday, Sky co-founder Rune Christensen outlined a plan for a with a 4.85% yield.
Agora, a crypto infrastructure company backed by VanEck and MoonPay, also threw its hat in the ring, proposing returning to the Hyperliquid community.
Ethena’s bid comes shortly after it claimed the position of the world’s , behind Tether and Circle. Its USDe token surpassed $10 billion in supply in under ten months, the fastest on record, and has grown to over in market value at the time of writing, according to data from Token Terminal.
In Tuesday’s blog post, Ethena also said its commitments to Hyperliquid are not conditional on winning. It called Hyperliquid “one of the most impressive and important stories to emerge in the last 20 years” and pledged to create multibillion-dollar value for the network beyond USDH.
The proposals will be decided after Hyperliquid’s next network upgrade, when validators will hold a formal vote. The date of the upgrade has not yet been announced.
As bids rolled in, Hyperliquid’s native token HYPE hit an all-time high of $55.04 today, according to .
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