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- Paxos proposes USDH, a fully compliant stablecoin for the Hyperliquid ecosystem.
- 95% of USDH yield will fund HYPE buybacks, rewarding users and validators.
- Hyperliquid already controls 70% of the decentralized perp market.
Stablecoin infrastructure provider Paxos has submitted a proposal to launch USDH, a fully compliant stablecoin designed exclusively for the Hyperliquid ecosystem. The stablecoin would adhere to the GENIUS Act in the U.S. and MiCA standards in Europe, giving Hyperliquid an institutional-grade asset with global regulatory clarity.
The initiative will be led by Paxos Labs, a newly formed division within the company. To accelerate development, Paxos Labs has acquired Molecular Labs, the creator of Hyperliquid’s onchain primitives LHYPE and WHLP, strengthening its integration with Hyperliquid’s financial architecture.
Yield-Backed HYPE Buybacks
Unlike typical stablecoin models, Paxos plans to use 95% of interest earned from USDH reserves to buy back Hyperliquid’s native token, HYPE. These buybacks would then be redistributed across validators, builders, and users, aligning incentives and funneling real yield back into the ecosystem.
This design aims to anchor Hyperliquid’s next phase of adoption by making the token economy self-reinforcing. Paxos also intends to integrate HYPE into its brokerage infrastructure, which already powers crypto services for PayPal, Venmo, and MercadoLibre.
USDH as a Bridge to Institutions
The proposed stablecoin will launch across HyperEVM and HyperCore chains, extending Hyperliquid’s reach into institutional finance and fintech networks. With Paxos already connected to over 70 financial partners across the U.S., EU, Singapore, Abu Dhabi, and Latin America, USDH could help onboard new institutional players into the Hyperliquid ecosystem.
Also Read: Lowkick Studio Launches $SHARDS Token on Top Tier Exchanges for WorldShards MMORPG
Hyperliquid’s Market Dominance
Hyperliquid has rapidly emerged as a leader in decentralized perpetual futures, processing $400 billion in monthly trading volume and generating $106 million in revenue last month. According to DeFiLlama, the platform now commands 70% of the decentralized perp market, making it second only to Uniswap and PancakeSwap in weekly trading volume.
If approved, USDH could reshape Hyperliquid’s growth trajectory, combining compliance, yield-driven tokenomics, and institutional access. For Paxos, it represents another step toward bridging traditional finance with Web3 innovation, while Hyperliquid strengthens its position as the dominant player in decentralized derivatives.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
