Hyperliquid is gearing up to introduce its own stablecoin, USDH, with a launch controlled by its community. This development is anticipated to roll out alongside the platform’s next major network update, as communicated in a Sept. 5
announcement on its official Discord server.
The protocol has characterized USDH as a stablecoin that prioritizes Hyperliquid’s ecosystem while maintaining regulatory compliance. In a departure from typical stablecoin launches, Hyperliquid is fostering a competitive environment, inviting various development teams to participate.
According to the details provided, interested teams are required to submit formal proposals outlining their approach to deploying the stablecoin. Following this, validators within the network will vote to approve a suitable candidate. The chosen team will then need to participate in a gas auction to secure their deployment slot.
This strategic move could have significant repercussions for existing stablecoin providers currently active on Hyperliquid.
Omar Kanji, a partner at Dragonfly,
suggested that the introduction of USDH might exert considerable pressure on Circle’s USDC, which is presently the dominant settlement currency for derivatives trading within the Hyperliquid ecosystem. He highlighted the substantial $5.5 billion in USDC deposits currently held on the platform.
Kanji estimates that a complete shift toward USDH could potentially generate an additional $220 million annually in revenue for holders of the HYPE token, based on an estimated yield of 4%.
Conversely, Kanji also pointed out that such a transition would correspondingly reduce Circle’s earnings by the same amount. He further suggested that this change could represent a 7% decrease in the overall circulating supply of USDC.
Other Planned Upgrade
In addition to the stablecoin launch, Hyperliquid is actively reshaping its market framework to enhance trading efficiency across the platform.
The protocol has officially announced plans to substantially reduce taker fees, maker rebates, and individual user volume contributions by as much as 80% for spot trading pairs that involve two quote assets.
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By implementing these fee reductions, Hyperliquid aims to enhance liquidity and lower financial barriers for traders, thereby encouraging broader participation.
Hyperliquid also intends to broaden accessibility to spot quote assets by transitioning to a permissionless framework. This rollout will initially be tested on the platform’s testnet, with eventual plans to incorporate staking requirements and potential slashing penalties to uphold network security.
Collectively, these initiatives are strategically designed to align user incentives and foster a more decentralized ecosystem within the exchange.
Hyperliquid’s growth
These forthcoming updates are being implemented as Hyperliquid experiences substantial growth in activity on its trading platform.
According to data from DeFiLlama, the decentralized exchange’s monthly trading volume achieved a new peak of approximately $400 billion in August, giving it a market share of more than 60%.
As activity on the platform has surged, the governance token HYPE has mirrored this upward momentum.
Over the past month, the token’s value has increased by more than 22%, reaching a high of $51 before settling near $47 at the time of reporting, based on information from
CryptoSlate.