In a significant development for the decentralized finance (DeFi) landscape, Native Markets has emerged as the victor in the competition to issue Hyperliquid’s native stablecoin, USDH. This decision, reached through a community vote, indicates a preference for innovation and speed over the historical reliability associated with established firms.
The announcement, made on Sunday, September 14, revealed that Native Markets successfully outperformed veteran competitors such as Paxos, BitGo, Ethena, and Frax. The selection was determined through a voting process that saw a two-thirds majority of staked HYPE tokens favor Native Markets. The team plans to initiate a limited testing phase for USDH shortly, prior to its broader release.
Experts suggest this choice reflects a strategic pivot within Hyperliquid’s community, valuing agile responses and a sense of alignment with platform goals over the security typically associated with industry leaders. Native Markets is championing a rapid implementation timeline alongside a promise to reinvest profits back into the ecosystem, despite an appraisal of them as relatively new and untested.
“The agility and innovative drive of Native Markets resonated with the Hyperliquid ethos,” commented Sid Sridhar, founder of Bima Labs. He articulated that disruption often materializes not from those entrenched in the sector, but from dynamic newcomers ready to challenge the status quo. Similarly, Chandler De Kock, co-founder at Silhouette, noted that Native Markets’ commitment over the past year to launch a stablecoin favored their bid markedly. Although established contenders held stronger records, their interests in USDH seemed more diluted compared to Native Markets, for whom this project represents their key focus.
Should Native Markets succeed, this could illustrate a narrative whereby an outsider capitalizes on opportunities overlooked by established participants. Conversely, failure could erode confidence in both Hyperliquid’s upcoming stablecoin and the broader ambition to normalize stablecoins within the financial landscape.
Further reinforcing their winning proposition, experts highlighted that Native Markets designed the USDH project explicitly for Hyperliquid. Jonathan Morgan, a senior crypto analyst at Stocktwits, explained that in-house operations would enhance reliability, particularly with the initiative’s planned balance between reserve yield allocations to HYPE buybacks and ecosystem growth.
However, as with any financial instrument, especially stablecoins, trust remains paramount. This is where Native Markets faces its most significant hurdle. Established issuers like Paxos have cultivated a history of compliance, audits, and regulatory relationships over years, exemplified by their role as the issuer for PayPal’s PYUSD.
Sridhar noted, “Opting for a newer issuer signifies a trade-off in established trust and proven systems.” This shift does not undoubtedly lead to failure but elevates the standard of proof required for confidence in the new issuer’s capabilities.
Concerns surrounding the dynamics of the voting process were raised by Nic Puckrin, CEO of Coin Bureau. Puckrin emphasized potential governance issues, stating that allegations of a predetermined outcome could undermine trust in the selection process and, by extension, in USDH itself.
As the developments surrounding USDH unfold, stakeholders will observe closely to assess both the risks and the opportunities presented by Native Markets’ initiative and its implications for the future of stablecoins in the DeFi space.
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- Original coverage – Source article
