Crypto protocol Sky (formerly Maker) has officially entered the competition to help issue and manage USDH, Hyperliquid's upcoming native stablecoin. On Monday, Sky co-founder Rune Christensen unveiled the project's proposal, positioning Sky as the fifth major contender vying for the opportunity.
A High-Stakes Auction for USDH Issuance
Hyperliquid last Friday issued an open call via Discord for teams interested in issuing "a Hyperliquid-first, native stablecoin with the ticker USDH." Sky's proposal, following bids from Native Markets (backed by Stripe's Bridge), Frax, Paxos, and Agora (supported by MoonPay), introduces a compelling mix of financial incentives and technical capabilities.
Sky's Offer: Yield, Multichain, and Governance-Ready
Rune Christensen pitched Sky's proposal with three main pillars:
Yield Above T-Bills: Hyperliquid would earn a 4.85% return on all USDH held on its platform—“significantly above the T-Bill rate.”
Seamless USDS Interoperability: USDH could convert to and from Sky's USDS stablecoin, which itself offers a 4.75% yield. The architecture would be “natively multichain” via LayerZero interoperability.
GENIUS Act Compliance & Customizability: Sky's model allows for customization—such as compliance with US regulations like the GENIUS Act, which prohibits paying yield on stablecoins.
Additionally, Sky pledged $25 million toward a dedicated DeFi accelerator on Hyperliquid, intended to foster organic ecosystem growth and potentially generate significant returns.
Who is Competing for USDH?
Native Markets, spearheaded by Max Fiege, proposes issuance via Stripe's Bridge.
Frax, a leading algorithmic stablecoin protocol.
Paxos, a regulated, institutional-backed issuer.
Agora, a crypto infrastructure firm supported by MoonPay.
These bids highlight a diverse field ranging from DeFi-native to regulated fintech-backed contenders.
VanEck CEO Makes a Personal Pitch
Jan van Eck, CEO of investment manager VanEck and father of Agora's co-founder Nick van Eck, took to X (formerly Twitter) to sway Hyperliquid's community. He emphasized their genuine interest in collaborating—not as outsiders being “gang-tackled.” His pitch blends personal connection with a firm assertion of independence.
The Road to Decision: Governance Still to Come
Hyperliquid's validators will determine the winner through a governance vote, which will take place after the platform's next network upgrade. The launch will be subject to the usual gas auction format, meaning the selected proposal must still secure on-chain deployment through market mechanisms.
What is at Stake?
Reduced USDC Dependency: USDH could displace Circle's USDC—which currently represents the bulk of stablecoin liquidity on Hyperliquid—reducing revenue flow to Circle while boosting native ecosystem returns. CryptoSlate estimates the shift could redirect $220 million in annualized value to HYPE token holders.
Ecosystem Integration: A native stablecoin could streamline settlement, reduce fees, and incentivize tighter Protocol integration.
Conclusion:
The battle for USDH issuance underscores how much is riding on stablecoin issuance strategy in today's DeFi landscape. Sky's proposal brings a powerful combination of yield, technical flexibility, and regulatory awareness—working alongside a multi-million-dollar ecosystem investment. Other contenders bring unique strengths too, whether through regulatory credibility, institutional backing, or fintech alignment.
Ultimately, Hyperliquid's validator vote will reveal whether protocol alignment, financial incentives, or innovation takes priority. Regardless of the outcome, Hyperliquid's approach signals a maturing DeFi ecosystem where stablecoin issuance is no longer taken for granted—it's competitive, strategic, and consequential.
