Hyperliquid Faces Backlash Over Stripe-Linked USDH Stablecoin Proposal
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Paxos, Frax, and Agora compete for issuance rights ahead of Sept. 14 validator vote
Hyperliquid’s plan to launch its proprietary stablecoin, USDH, has sparked a heated governance battle within the crypto community. With a validator vote scheduled for Sept. 14, concerns are mounting over whether a proposal linked to Stripe’s Bridge platform could give the payments giant too much control over the exchange’s monetary layer.
Billions at stake in stablecoin revenue
USDH is designed to replace the $5.5 billion of USDC currently circulating on Hyperliquid, which makes up 95% of the platform’s stablecoin supply. Control of the new stablecoin would not only reshape Hyperliquid’s ecosystem but also generate hundreds of millions of dollars in revenue from U.S. Treasury yields.
Community concerns over Stripe’s influence
Critics warn that allowing Stripe to issue USDH would effectively cede economic sovereignty to a potential competitor. Stripe is already developing its own blockchain, Tempo, and controls wallet infrastructure through its acquisition of Privy.
“If Hyperliquid relinquishes their canonical stablecoin to Stripe, a vertically integrated issuer with clear conflicts, what are we even doing?” said Nick van Eck, CEO of Agora.
Proposal: Agora stablecoin infrastructure to power USDH with a coalition of best-in-class providers.
Introduction If Hyperliquid relinquishes their canonical stablecoin to Stripe, a vertically integrated issuer with clear conflicts, what are we all even doing?
Frax offered a community-first model, promising to pass 100% of Treasury yield directly to users.
Agora, backed by MoonPay, emphasized neutrality and alignment, pledging 100% of net revenue for HYPE buybacks or Hyperliquid’s Assistance Fund.
MoonPay President Keith Grossman added: “USDH deserves scale, credibility and alignment – not BS capture.”
Meanwhile, Ethena has hinted at joining the race, potentially adding another layer of complexity.
Validator vote to decide future
The Hyperliquid Foundation confirmed that it will abstain from the vote, leaving the final decision entirely to validators. Proposals are due by Sept. 10, with the decisive vote set for Sept. 14.
With Hyperliquid holding an 80% share of the DeFi derivatives market, the outcome could reshape not just the platform’s economy but also the balance of power in stablecoin issuance.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.
