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- Native Markets controversy overshadows USDH race.
- Paxos remains top competitor with institutional support.
- HYPE holders see 20% gains amid bidding frenzy.
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Hyperliquid’s proposed stablecoin, USDH, has ignited one of the most aggressive bidding wars in the crypto space, drawing top issuers such as Ethena (ENA), Paxos, Sky (SKY), Frax, and more. With stakes so high, the race has quickly become a hot topic for investors and crypto enthusiasts alike.
Controversy Surrounds Native Markets’ Bid
While the competition is fierce, controversy has emerged around Native Markets, a newcomer with no prior experience in issuing stablecoins. Dragonfly VC’s managing partner, Haseeb Qureshi, called the process a “farce,” claiming it is rigged in favor of Native Markets.
According to Qureshi, multiple bidders reported that validators seemed unwilling to consider anyone besides Native Markets, hinting at potential pre-arrangements. Evidence cited includes Polymarket odds, rapid proposal submissions, and other early signals suggesting insider knowledge.
Starting to feel like the USDH RFP was a bit of a farce.
— Haseeb ＞|＜ (@hosseeb) September 9, 2025
Hearing from multiple bidders that none of the validators are interested in considering anyone besides Native Markets. It's not even a serious discussion, as though there was a backroom deal already done.
Native Markets'… pic.twitter.com/qrc9xChv6z
Paxos Emerges as a Top Contender
Despite the controversy, the race has largely narrowed to Paxos and Native Markets. Paxos briefly saw its winning chances rise to 47% following a revised proposal, though Native Markets remains priced at nearly 60% likelihood of victory according to market indicators.
Most bidders are pledging 95%-100% value accrual in HYPE, often supported by regulated entities such as BlackRock, signaling a strong institutional interest in Hyperliquid’s new stablecoin.
Strategic Goals Behind USDH Launch
The push for USDH isn’t purely competitive. Currently, Circle’s USDC dominates Hyperliquid’s DEX, generating roughly $100 million in yield that goes to Coinbase rather than Hyperliquid. A proprietary stablecoin could redirect these gains and help Hyperliquid manage regulatory risks, particularly around on/off ramps.
Investment analyst James Evans of Reciprocal Ventures explains, “That risk could materialize as an attack on Hyperliquid’s on/off ramps. So in addition to being a product decision, having a compliant stablecoin could be a first step to building regulatory legitimacy.”
Also Read: Sky (ex-Maker) Joins Race to Power Hyperliquid’s USDH Stablecoin With $25M Plan
HYPE holders are already seeing immediate benefits: the altcoin surged to a new high of $55, roughly 20% higher since the bidding war began over the weekend.
The USDH bidding war is more than a competition—it reflects Hyperliquid’s ambition to expand its ecosystem, gain regulatory footing, and reward HYPE holders. As final proposals close on September 10 and validator votes are cast by September 14, the crypto market will be watching closely to see who claims the coveted USDH partnership.
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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 a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
