Paxos Publishes Updated Proposal to Win USDH Stablecoin Bid

TheCryptoTimesPublicado a 2025-09-10Actualizado a 2025-09-10

Paxos Labs, a blockchain and fintech firm, has published a Version 2 of its proposal to mint Hyperliquid’s USDH stablecoin today. This follows its first proposal on September 7, to outbid other stablecoin issuers for the chance to launch Hyperliquid’s new USDH stablecoin.

This second version of the proposal includes three major upgrades: a new PayPal partnership, better rewards for the community, and expansion efforts globally. The official statement reads, “Together, this framework ensures Paxos only wins if Hyperliquid wins, and USDH becomes the gateway stablecoin for global DeFi adoption.”

PayPal Partnership

The first major highlight of the proposal is the partnership with PayPal. HYPE tokens will soon be available for purchase on PayPal and its subsidiary Venmo, pending regulatory approval. At the same time, USDH will have free on/off ramps through PayPal’s platform, making it easy for users to access the stablecoin in all supported countries.

PayPal is also contributing $20 million in incentives to support HYPE and USDH adoption. Additionally, HYPE and USDH will be integrated into PayPal Checkout and Braintree, including the new “Pay With Crypto” solution.

Community Rewards and Governance

The community is at the heart of this plan. All USDH revenue will be reinvested into growing the platform and supporting Hyperliquid’s Assistance Fund (AF) until the total value locked (TVL) reaches $1 billion. After that, Paxos’ share of fees is capped at 5%, meaning they only benefit if USDH succeeds.

Ecosystem rewards will incentivize partners and platforms that contribute to USDH adoption. The Hyperliquid community can vote on future distribution changes as the network grows.

Paxos also highlighted it is the only company that can issue stablecoins legally across Europe and other major markets, enabling safe global expansion. It will also support liquidity across Hyperliquid’s spot and perpetual markets and onboard asset issuers to HIP-3, Hyperliquid’s permissionless platform for creating new markets.

Growing USDH in a Competitive Market

Paxos already powers stablecoin services for platforms like Stripe, Mastercard, Robinhood, Nubank, Mercado Libre, and Interactive Brokers. Yet the race for USDH issuance is competitive. Frax Finance has proposed backing USDH with frxUSD, supported by BlackRock’s BUIDL fund, while Agora, Rain, LayerZero, Ethena Labs, and Sky also submitted proposals.

This bidding process shows how important Hyperliquid and stablecoins are in DeFi. Hyperliquid launched the search for a USDH issuer last Friday, with proposals due by September 10. Validators are set to vote on the winning proposal starting September 14, while the Hyperliquid Foundation will remain neutral in the decision.

Also Read: VanEck CEO Jan van Eck Publicly Pitches Partnership with Hyperliquid

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