Ethena Labs is competing to issue Hyperliquid’s new native stablecoin, USDH. They have put in a proposal that they are being backed by BlackRock. Ethena’s offer, which was made public on September 9, 2025, puts it in competition with other big names like Paxos, Frax Finance, Agora, and Sky for a key role on the decentralized exchange, which is growing quickly.
The proposal suggests backing the new stablecoin, USDH, with USDtb, a tokenized note collateralized by BlackRock’s BUIDL fund.
Ethena’s official proposal details a plan to return 95% of all net revenue to the Hyperliquid community and includes a commitment of $75 million in incentives to support market development. Key partners in the bid include institutional custody firm Anchorage Digital and tokenization platform Securitize.
Hyperliquid’s move to introduce a native stablecoin follows its announcement on September 5 and aims to replace the $5.5 billion in USDC currently used for settlement on the platform. The exchange has grown a lot, and in August, the volume of perpetual contract trading reached an all-time high of $405.8 billion. According to DefiLlama, the protocol makes over $1.3 billion a year, which makes the stablecoin contract a very valuable reward.
The financial implications are substantial. Omar Kanji of Dragonfly estimated the transition could generate an additional $220 million in annualized revenue for holders of Hyperliquid’s native token, HYPE. He also projected the move could reduce the circulating supply of Circle’s USDC by as much as 7%, representing a significant shift in the stablecoin landscape.
The competition for Hyperliquid’s stablecoin issuance is a major event in decentralized finance, highlighting a battle for a significant and stable revenue stream on one of DeFi’s leading platforms. By being backed by BlackRock, the company shows how the future is being shaped between institutional and digital finance.
A community vote and a gas auction will decide the final choice. This is a very important test for decentralized decision-making in high-stakes financial relationships, where the result will decide both the ecosystem’s future and set parameters for this disruptive partnership.
Also Read: Hyperliquid to Launch USDH Stablecoin Ticker Post Validator Vote
