Validators backed a fast, ecosystem-first proposal over established issuers, raising questions about risk, governance, and trust.<\/p>\n
Native Markets has won the bid to build decentralized exchange Hyperliquid\u2019s<\/a> native stablecoin USDH<\/a>, with experts saying the choice reflects a gamble on speed and alignment over the safety of established issuers.<\/p>\n The team, which announced the news on Sunday, Sept. 14, beat out well-known firms like Paxos, BitGo, Ethena<\/a>, and Frax in a community vote. Native Markets submitted the first proposal and was picked by a two-thirds majority of staked HYPE tokens. USDH will start with a small testing phase in the next few days, before a full launch.<\/p>\n The vote underscores how Hyperliquid\u2019s community prefers speed, alignment, and commitment over big names, experts told The Defiant. Native Markets\u2019 proposal promised a fast rollout, direct integration with the platform, and a plan to return earnings to the ecosystem, even though the team is new and untested.<\/p>\n \u201cNative Markets was chosen because they move fast, they innovate, and they fit Hyperliquid\u2019s vision,\u201d said Sid Sridhar, founder of Bima Labs. \u201cThat is how disruption happens \u2013 not by the incumbents who have the most assets under management or the biggest compliance teams, but by new entrants who are hungrier, more agile, and willing to push boundaries.\u201d<\/p>\n Chandler De Kock, co-founder of Silhouette, echoed the point, noting Native Markets had been pushing to launch a stablecoin for over a year. \u201cTheir standing within the ecosystem made them the clear choice,\u201d De Kock said. \u201cOther, more established players had stronger track records, but for them, USDH would have been just another project. For Native Markets, it\u2019s their core focus, and that alignment mattered to validators.\u201d<\/p>\n If Native Markets succeeds, \u201cit will be a classic story of an outsider seizing an opportunity that incumbents were too slow or too cautious to capture,\u201d Sridhar added. \u201cIf they fail, it could damage confidence not just in Hyperliquid\u2019s stablecoin but in the broader effort to make stablecoins mainstream.”<\/p>\n Experts also pointed to Native Markets\u2019 Hyperliquid-first design as a key reason behind the vote. \u201cBasically everything is staying in-house,\u201d said Jonathan Morgan, senior crypto analyst at Stocktwits, adding that the 50\/50 split of reserve yield between HYPE buybacks and ecosystem growth likely helped win support. <\/p>\n Validators also valued the plumbing, Morgan said, with compliance handled through Bridge (using Stripe\u2019s KYC\/AML system), off-chain reserves managed by BlackRock, and tokenized reserves on-chain through Superstate.<\/p>\n On the other hand, experts cautioned that stablecoins ultimately depend on trust \u2013 and that\u2019s where Native Markets still has the most to prove. Established issuers like Paxos have years of experience with audits, compliance checks, and regulatory oversight. For context, Paxos is the issuer of PayPal\u2019s PYUSD. <\/p>\n \u201cThe established issuers have spent years building these defenses. They have battle-tested infrastructure, they have endured regulatory fire drills, and they have deep institutional relationships,\u201d Sridhar said. \u201cWhen you select a newer issuer, you are trading away some of that history. That does not mean failure is inevitable, but it does mean the bar for proof is higher.\u201d<\/p>\n Other risks come down to the mechanics. Morgan noted that collateral, issuance rails, and liquidity only work if the systems and counterparties behind them run without disruption. \u201cIf Bridge freezes or Superstate lags when there\u2019s a lot of demand and activity, it could cause some problems in the future.\u201d<\/p>\n Meanwhile, some experts see risks in how the decision was made. Nic Puckrin, CEO of Coin Bureau, said the process has already raised eyebrows. \u201cSome suggest the outcome was pre-determined<\/a>, which has raised governance concerns and thereby trust issues,\u201d Puckrin said. \u201cIf trust in the selection process is shaky, it could spill over into skepticism about USDH itself.\u201d <\/p>\n He also emphasized that the hybrid reserve model is risky, as relying partly on off-chain assets and external managers is \u201cfine when things are smooth, but peg volatility could become exaggerated in its early days. \u201c<\/p>\n\u2018Willing to push boundaries\u2019<\/h2>\n
Building Trust<\/h2>\n