Ethena enters USDH race supported by BlackRock BUIDL, Anchorage, Securitize

Ethena Labs submitted a proposal on Sept. 9 to become the issuer of Hyperliquid’s native stablecoin USDH, joining an increasingly competitive race.

The bid consists of backing USDH entirely by USDtb, a stablecoin backed by BlackRock’s BUIDL fund, with the support of Anchorage Digital.

Ethena is committed to returning 95% of net revenue generated from USDH reserves directly to the Hyperliquid community through HYPE token purchases and ecosystem development.

Hyperliquid launched the competitive selection process for USDH following a Sept. 5 announcement that the protocol would introduce its native stablecoin in the next network upgrade.

The move targets the $5.5 billion in USDC deposits currently serving as the primary settlement currency on the decentralized exchange.

The selection carries significant financial implications for Hyperliquid, which currently records nearly $1.3 billion in estimated annualized revenue, according to DefiLlama data. Additionally, the network achieved an all-time high monthly trading volume of $405.8 billion in perpetual contracts during August.

Different approach

Ethena’s proposal differentiates itself through institutional partnerships and proposed security infrastructure.

The company plans to establish an elected guardian network of Hyperliquid validators to oversee USDH operations, removing single-issuer control over the stablecoin’s security management.

Beyond basic stablecoin issuance, Ethena outlined plans to launch hUSDe, a Hyperliquid-native variant of its synthetic dollar product, and committed $75 million in incentives to support HIP-3 market development.

The firm also announced partnerships with Securitize to deploy tokenized real-world assets on HyperEVM and native USDtb integration.

Competing proposals

Competing proposals offer distinct approaches to USDH backing and governance. Paxos proposes backing through New York Department of Financial Services-protected accounts with monthly KPMG attestations.

Frax Finance plans frUSD backing through treasury partnerships with BlackRock and Superstate. Agora offers short-dated US Treasuries with proof of reserves powered by Chaos Labs.

Sky proposes flexible collateral backing through its risk management framework with LayerZero interoperability.

The validator-driven selection process requires proposal approval through community governance before proceeding to a gas auction for final deployment rights.

Omar Kanji from Dragonfly estimates the transition could generate $220 million in additional annualized revenue for HYPE holders while reducing Circle’s USDC supply by 7%.

Ethena emphasized its track record managing over $23 billion in tokenized dollar assets and positioned itself as the largest counterparty capable of supporting Hyperliquid’s expansion into equity perpetual swaps through HIP-3 markets.

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