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Native Markets, a startup formed just weeks ago, has secured control of the Hyperliquid USDH stablecoin following a validator-led governance vote, the company confirmed on September 14. The outcome positions the firm at the center of Hyperliquid’s fast-growing exchange ecosystem, where billions in liquidity are expected to flow through USDH in the coming months.
The decision concludes a nine-day competition launched by Hyperliquid on September 5. The contest invited bids for a stablecoin designed specifically for the exchange’s infrastructure, aiming to reduce reliance on USDC and USDT. Despite participation from established issuers such as Paxos and Frax, Native Markets won with more than 70% of the delegated stake.
“This is a major milestone not just for us but for the Hyperliquid community,” — Max Fiege, Co-Founder, Native Markets, in a statement.
Under Native Markets’ proposal, the Hyperliquid USDH stablecoin will be issued directly on HyperEVM, with reserves split between on-chain partners such as Superstate and traditional custodians like BlackRock. Half of the reserve yield will be directed to HYPE token buybacks, while the other half will fund ecosystem development.
“By internalizing stablecoin yield, Hyperliquid is effectively aligning validator incentives with platform growth,” — Guy Young, Founder, Ethena.
While the validator vote demonstrated the power of Hyperliquid’s governance model, it also sparked controversy. Some industry figures argued that larger, more established institutions offered stronger bids but were sidelined in favor of a newcomer.
Haseeb Qureshi, Managing Partner at Dragonfly, voiced concerns about fairness, noting that one validator wallet reportedly controlled around 15% of the total voting power. Critics argue this undermines decentralization and raises the risk of concentrated influence in future governance processes.
Still, supporters maintain that the result reflects grassroots governance at work. Ethena’s Young, whose team withdrew earlier, defended the outcome as a legitimate validator-led decision that underscores Hyperliquid’s independence from legacy stablecoin issuers.
Native Markets now faces the challenge of delivering on its promises. According to Fiege, initial rollouts of both HIP-1 and ERC-20 versions of the Hyperliquid USDH stablecoin will begin within days, starting with capped mint and redeem tests at $800 per transaction. The cap will later be lifted to allow unrestricted flows.
Plans also include launching a USDH/USDC spot market and an API tailored for institutional and high-volume traders. In a sign of intensifying competition, Circle has already announced a native USDC deployment on Hyperliquid to retain relevance against the new entrant.
“This competition highlights how validator-led ecosystems can rapidly shape billion-dollar markets,” — independent DeFi analyst quoted in Bankless.
For crypto investors, the launch of the Hyperliquid USDH stablecoin is both a milestone and a test case. On one hand, it offers a new pathway for yield generation and reduced dependence on centralized issuers. On the other, it underscores the risks of concentrated validator influence and the challenges of trusting a newly formed startup with a core piece of infrastructure.
The ruling marks a turning point for Hyperliquid’s independence from USDC and USDT, while setting the stage for wider debates about decentralization in validator-led governance. As the USDH rollout unfolds, investors will be watching closely to see whether Native Markets can deliver the scale, security, and transparency required to support billions in liquidity.
Ultimately, the success or failure of the Hyperliquid USDH stablecoin could influence how other decentralized exchanges structure their own governance and stablecoin models. If USDH thrives, it may accelerate a broader shift toward exchange-native stablecoins. If it falters, it could reinforce the dominance of established players like Circle and Tether, reminding investors of the resilience of centralized models.
