In a significant development within the decentralized finance (DeFi) landscape, Native Markets has emerged victorious in the competition to develop the USDH stablecoin for the Hyperliquid platform. This decision, confirmed by a community vote held on September 14, highlights a preference among validators for rapid innovation and ecosystem alignment over the pedigree of established financial institutions.
Native Markets, a relatively new player in the crypto space, triumphed over well-known contenders including Paxos, BitGo, Ethena, and Frax. The proposal they submitted received overwhelming support from the community, securing approximately two-thirds of the staked HYPE tokens necessary for approval. As part of the process, USDH will undergo an initial testing phase shortly, paving the way for a comprehensive launch.
Industry analysts suggest that this choice reflects Hyperliquid’s community ethos, which favors speed and commitment over reliance on traditional companies. “Native Markets was chosen due to their agility and innovative approach, which resonates with Hyperliquid’s vision for disruption in the sector,” remarked Sid Sridhar, founder of Bima Labs. “True disruption often comes from more nimble entities that are eager to explore uncharted territories.”
This sentiment was echoed by Chandler De Kock, co-founder of Silhouette, who highlighted Native Markets’ dedication to launching their stablecoin – a goal they have pursued over the past year. “Their deep engagement with the community positioned them as the ideal candidate. While established firms might leverage their proven track records, for Native Markets, the launch of USDH represents a core mission rather than just another project,” he explained.
For Native Markets, the stakes are notably high. If successful, the team could exemplify a classic narrative of newcomers capitalizing on opportunities that traditional players have either overlooked or hesitated to pursue. However, the risks associated with such an ambitious undertaking cannot be ignored. Analysts caution that the foundation of any stablecoin ultimately lies in trust, an area where Native Markets will need to prove its reliability.
Notably, the infrastructure supporting USDH is thought to be strategically centralized, as evidenced by its design that emphasizes in-house management. Jonathan Morgan, a senior crypto analyst at Stocktwits, pointed out that the 50/50 distribution of reserve yield—supporting both HYPE buybacks and ecosystem growth—has likely bolstered the proposal’s appeal. He further noted that compliance measures are being facilitated through Bridge, which employs Stripe’s KYC/AML protocols, while BlackRock manages off-chain reserves, and Superstate oversees on-chain tokenization of reserves.
Nevertheless, experts emphasize that the effectiveness of these systems relies heavily on their operational stability. If challenges arise in key services like Bridge or Superstate during periods of high demand, significant complications could ensue. Furthermore, governance issues have surfaced regarding how the outcome of the voting process was determined, with some suggesting that the result may have been influenced prior to the vote. Such implications could lead to broader concerns regarding trust and transparency within the Hyperliquid community.
“Concerns about the governance surrounding the selection process may affect perceptions of fairness and credibility,” warned Nic Puckrin, CEO of Coin Bureau. “If confidence in the voting mechanism is compromised, it could spill over into skepticism about USDH and its broader implications for trust within the stablecoin industry.”
As USDH prepares for its upcoming launch, all eyes will be on Native Markets to see if they can overcome the challenges and live up to the high expectations set by the community. The outcome could have significant implications not only for the Hyperliquid platform but also for the wider adoption of stablecoins in the evolving financial landscape.
