tl;dr
Hyperliquid, a decentralized exchange and layer-1 network with $5.7 billion in stablecoins, is considering Ethena Labs' proposal for a new stablecoin, USDH. Ethena's stablecoin would be backed by USDtb, a stablecoin issued by Anchorage Digital and collateralized by BlackRock's BUIDL fund. This ins...
**Ethena Steps Into the Ring: The Battle for Hyperliquid’s Stablecoin Crown Heats Up**
Hyperliquid, the decentralized exchange and layer-1 network, is no longer the scrappy underdog of DeFi. With $5.7 billion in stablecoins on its network—according to crypto data provider DefiLlama—the platform has become a magnet for attention from big names in the crypto world. Now, Ethena Labs, the team behind the synthetic-dollar protocol, is throwing its hat into the ring, proposing a new stablecoin for Hyperliquid that could shake up the status quo.
Currently, Hyperliquid relies on Circle’s USDC and Tether’s USDT to power its operations, but the community is actively seeking a “Hyperliquid-aligned” stablecoin. Ethena’s proposal, unveiled Tuesday, positions itself as a contender with a unique edge: institutional-grade backing and a coalition of high-profile partners.
**A Stablecoin with Institutional Heft**
Ethena’s proposed stablecoin, USDH, would initially be backed by USDtb—a stablecoin issued by Anchorage Digital, a federally chartered digital assets bank. What makes USDtb stand out? It’s 100% collateralized by BlackRock’s tokenized BUIDL fund, a $14 trillion asset manager’s foray into crypto. This connection gives USDH indirect institutional backing, a feature that could appeal to Hyperliquid’s growing user base, which includes both retail traders and institutional investors.
“Ethena’s USDtb is uniquely positioned to offer institutional-grade cash management and on-chain liquidity to Hyperliquid users,” said Robert Mitchnick, BlackRock’s Head of Digital Assets, in the proposal.
**Partnerships as a Power Play**
Ethena isn’t just throwing its weight around—it’s bringing allies. Anchorage Digital, which already issues USDtb, would deploy the stablecoin natively on Hyperliquid’s network. Meanwhile, Securitize, the BlackRock-backed real-world asset tokenization firm, would deploy its platform on Hyperliquid’s layer-1, enabling institutional-grade tokenized funds, stocks, and other financial products—without deployment costs.
This isn’t just about stability; it’s about expanding Hyperliquid’s ecosystem. By integrating Securitize’s tools, Hyperliquid could attract traditional finance players eager to dip their toes into DeFi.
**Revenue Sharing and Token Incentives**
Ethena’s proposal also includes a revenue-sharing model. At least 95% of USDH’s reserves would be distributed to Hyperliquid’s “Assistance Fund,” alongside HYPE token purchases and distributions to validators. HYPE, Hyperliquid’s governance token, has surged 20% in a single day, trading around $53 on Tuesday, according to CoinGecko. This spike suggests the community is taking notice—and possibly leaning into Ethena’s offer.
If approved, Ethena would even cover transaction costs associated with making USDH the go-to stablecoin on Hyperliquid. That’s a rare concession, one that could tip the scales in favor of Ethena’s proposal.
**A Shift in DeFi’s Power Dynamics**
Ethena’s move underscores a broader trend: DeFi is no longer just about innovation. It’s about credibility. Hyperliquid, once seen as a scrappy startup, now finds itself courted by major players like Ethena, Paxos, and even World Liberty Financial—a project backed by U.S. President Donald Trump.
But Ethena’s institutional ties and strategic partnerships give it a distinct advantage. If the Hyperliquid community votes in favor of USDH, it could mark a turning point for the platform—and for Ethena, which has long focused on synthetic assets.
So, what does this mean for the future of stablecoins? Will USDH dethrone USDC and USDT on Hyperliquid? Or will the platform stick with its tried-and-true options?
The answer might just be a click away.