Paxos, Frax, Agora Compete for Hyperliquid’s Stablecoin Bid

14 hours ago

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What sparked the intense battle between Paxos, Frax, and Agora for USDH dominance?

Which strategies are Paxos, Frax, and Agora employing to win the USDH bidding war?

How might the USDH competition influence the future of stablecoins and the broader crypto ecosystem?

Paxos, Frax, Agora Compete for Hyperliquid’s Stablecoin Bid — Image source: Unblock Media

Major stablecoin issuers, including Paxos, Frax Finance, Agora, and Native Markets, submitted proposals for USDH.
Validator voting is set for September 14, with the winning bid to reflect Hyperliquid’s ethos and compliance priorities.

On September 7, 2025, The Block reported that Paxos, Frax Finance, Agora, and Native Markets are in a high-stakes race to issue USDH, the native stablecoin for Hyperliquid, a decentralized trading platform managing $5.5 billion in USDC deposits. Hyperliquid seeks a compliant, ecosystem-aligned issuer through an upcoming validator vote. Key focus areas for the proposals include revenue-sharing frameworks, regulatory adherence, and ecosystem integration strategies.

Paxos presented its bid via its new division, Paxos Labs, highlighting compliance with standards such as MiCA and the GENIUS Act. Their proposal features one of the most competitive revenue-sharing models, with 95% of interest proceeds allocated to buy back Hyperliquid’s native token, HYPE. Furthermore, Paxos aims to incorporate HYPE into its infrastructure, which powers services like PayPal and Venmo.

Frax Finance proposed supporting USDH with its frxUSD stablecoin at a 1:1 ratio. Backed by BlackRock's on-chain BUIDL treasury fund, Frax’s pitch outlines a programmatic return of 100% of the stablecoin’s Treasury yield to Hyperliquid users, reinforcing a community-focused approach.

Agora, in collaboration with Rain and LayerZero, committed 100% of its net revenue either to Hyperliquid’s Assistance Fund or HYPE token buybacks. Agora CEO Nick van Eck emphasized the neutrality of their stablecoin, adding that it does not compete with other settlement networks.

Native Markets, the first to file a proposal, benefits from the involvement of former Uniswap Labs President MC Lader. Their plan offers a “meaningful share” of reserve proceeds to Hyperliquid’s Assistance Fund, aiming to bolster the platform’s long-term sustainability.

Ethena Labs has also expressed interest in joining the bidding process but had not submitted a formal proposal by September 7. Additional bids may still surface before the September 10 submission deadline, with validator voting slated for September 14.

As of September 7, 2025, at 21:12 UTC, Hyperliquid (HYPE) is trading at $47.01, marking a 2.39% growth in 24-hour trading volume as reported by CoinMarketCap.