A competitive scramble is underway in the cryptocurrency world, reminiscent of a reality dating show, as various entities vie for the prime position of preferred stablecoin on the Hyperliquid blockchain. Over the past week, several organizations, including Bridge (recently acquired by Stripe – learn more here) and a venture linked to Paxos, have presented their proposals to launch a stablecoin within the Hyperliquid network. The allure? Access to nearly $6 billion worth of stablecoin transactions facilitated by Hyperliquid’s leading exchange.
Mert Mumtaz, head of the cryptocurrency firm Helius, playfully commented on social media platform X, noting the intense competition: “Companies are essentially writing public letters of admiration, hoping to be selected as the chosen stablecoin partner. It’s like The Bachelor, but for digital currencies.”
bro ngl this is pretty crazy
Hyperliquid has grown men writing public love letters to their protocol so that they may be picked as a partner
This is basically The Bachelor, but for stablecoins
Who will get the last rose? Incredible https://t.co/0zWfjAxKYg— mert | helius.dev (@0xMert_) September 8, 2025
Below, we delve into the forces driving this stablecoin showdown, identify the key contenders vying for the top spot, and analyze potential implications for Circle, a publicly traded giant in the stablecoin market.
Understanding Hyperliquid
Hyperliquid serves a dual purpose: it’s a rapidly expanding cryptocurrency exchange and the underlying blockchain upon which it operates. It functions within the decentralized finance (DeFi) sphere, facilitating services like lending and borrowing through blockchain technology. Since its inception in 2022, the Hyperliquid exchange, which caters to traders seeking to speculate in more volatile crypto derivatives, has achieved an impressive annualized revenue nearing $1.3 billion, according to data provided by crypto analytics firm DefiLlama.
Stablecoins, cryptocurrencies pegged to stable assets like the U.S. dollar, are integral to the functioning of any exchange. Given the notorious price swings of cryptocurrencies such as Bitcoin and Ethereum, traders often hold their funds in stablecoins to mitigate potential losses. Currently, approximately $6 billion in stablecoins are held on Hyperliquid, as reported by Artemis Analytics, a crypto data firm.
Currently, over 90% of these stablecoins are Circle’s USDC, the second-largest stablecoin by market capitalization, according to Artemis. However, the Hyperliquid Foundation, a crucial entity behind the blockchain and exchange, announced it would grant the ticker symbol USDH to any party planning to create a stablecoin specifically designed for the Hyperliquid platform.
The Battle for Dominance
While the foundation is simply assigning the ticker symbol and affirms that the Hyperliquid blockchain will continue to support multiple stablecoins (according to their Discord channel), crypto observers believe that owning USDH offers a significant advantage. Bhau Kotecha, cofounder of Paxos Labs, a contender for the ticker, explained, “It will be the stablecoin favored by the community, unlike [USDC from] Circle, which they currently use out of necessity.”
Stablecoin issuers typically back their digital assets with dollar-equivalent reserves, such as U.S. Treasury bills, generating revenue through the yield earned on these holdings. This means the billions in stablecoins on Hyperliquid translate to potentially substantial revenue, given prevailing interest rates. Andrew Van Aken, a data scientist at Artemis, emphasized the stakes: “Opportunities to manage $5 billion don’t come around every day,” referring to the approximate value of stablecoins on Hyperliquid.
To challenge Circle, which has historically not shared the yield from its reserves with integration partners, Hyperliquid contenders have pledged to reinvest earnings back into the blockchain ecosystem.
Following the Hyperliquid foundation’s call for USDH proposals, prominent crypto organizations have entered the fray, including ventures connected to Stripe, the stablecoin issuer Paxos, and various DeFi projects. Zach Abrams, cofounder of Bridge (recently acquired by Stripe), expressed his enthusiasm on X, stating, “We’re incredibly excited about Hyperliquid taking the lead and controlling its own monetary system.”
Impact on Circle’s Position
Prediction markets, such as Polymarket, suggest that Bridge and its partner, Native Markets, are leading contenders in the stablecoin race (see predictions here).
Regardless of the ultimate winner, Circle’s revenue stream appears, at least in the short term, to be at risk. In the second quarter of this year, over 96% of Circle’s revenue was derived from the interest earned on the reserves backing USDC. Given that nearly one-tenth of USDC’s total supply resides within the Hyperliquid exchange (according to Artemis Analytics), the outcome of the Hyperliquid stablecoin competition directly impacts Circle’s financial performance. “It’s definitely a short-term challenge,” noted Van Aken.
However, a Circle spokesperson contested the notion that the Hyperliquid stablecoin race would negatively impact the company, stating: “We do not anticipate the USDH ticker vote affecting USDC’s position as the primary stablecoin on Hyperliquid. Circle remains committed to strengthening our presence within the Hyperliquid ecosystem.”