Hyperliquid Faces Community Pushback Against Stripe-Linked USDH Proposal

Decentralized speech and layer-1 concatenation Hyperliquid’s plan to launch a proprietary stablecoin, USDH, has turned into 1 of the astir contentious governance battles of caller years successful crypto.

At involvement is power of a dollar-pegged token that could regenerate the $5.5 cardinal of USDC, which presently represents 95% of the platform’s stablecoin supply, and make hundreds of millions successful gross from yields connected U.S. Treasuries. The validator ballot connected Sept. 14 volition determine who issues USDH.

The contention has attracted heavyweight bidders, including Paxos, Frax arsenic good arsenic a conjugation involving Agora and MoonPay, but the fiercest statement is implicit a connection tied to Stripe’s Bridge platform.

Some members of the assemblage are informing that handing power of the exchange’s monetary furniture to Stripe, which is gathering its ain blockchain called Tempo and already controls wallet infrastructure done its Privy acquisition, would magnitude to ceding economical sovereignty to a competitor.

“If Hyperliquid relinquishes their canonical stablecoin to Stripe, a vertically integrated issuer with wide conflicts, what are we adjacent doing?” Nick van Eck, CEO and co-founder of Agora, which has a connection successful beforehand of voters, wrote.

In announcing its information successful the Agora coalition, MoonPay President Keith Grossman stressed that his outgo processor holds much licenses and verified users than Stripe oregon Bridge, saying “USDH deserves scale, credibility and alignment – not BS capture.”

Crowded field

Paxos has pitched 95% of reserve net into HYPE token buybacks, leaning connected its decade-long way grounds arsenic a regulated issuer. Frax offered a “community-first” model, passing done 100% of Treasury output to users with zero take.

Agora’s bid emphasized neutrality and alignment, promising 100% of nett gross for HYPE buybacks oregon Hyperliquid’s Assistance Fund.

With Ethena hinting it whitethorn participate the race, the lineup of bidders could expand, adding different furniture of complexity to an already crowded field.

Each connection offers a antithetic imaginativeness for however USDH should function: From Paxos’ regulatory-first attack to Frax’s user-yield exemplary to Agora’s Hyper-native conjugation backed by organization custodians and consumer-facing outgo rails.

Hyperliquid dominates the DeFi derivatives market, with astir an 80% marketplace share. Given the maturation of the Hyperliquid ecosystem, the close to contented its autochthonal stablecoin would beryllium incredibly lucrative for whoever is awarded the contract.

Hyperliquid acceptable Sept. 10 arsenic the deadline for proposals — much are expected successful the adjacent 48 hours — and Sept. 14 arsenic the day for the validator vote. The Hyperliquid Foundation besides said that it volition “effectively abstain,” leaving the determination to validators.