Chiara Bianchi
Paxos Labs has released an updated version of its proposal to become the official issuer of Hyperliquid’s upcoming USDH stablecoin, competing against several top stablecoin providers. The new framework, revealed Tuesday, highlights Paxos’ vision to scale the Hyperliquid ecosystem globally.
Central to the plan is a strategic partnership with PayPal, which would integrate USDH into PayPal’s checkout and payment rails. The collaboration also extends to Venmo and PayPal’s on/off-ramp services, with support for both USDH and Hyperliquid’s HYPE token. PayPal has further pledged $20 million in ecosystem incentives to strengthen HYPE adoption.
Under the revised structure, all initial revenue generated by USDH will be redirected into Hyperliquid’s growth initiatives and its Assistance Fund (AF) until the stablecoin surpasses $1 billion in TVL. Even as the market grows, Paxos will cap its revenue share at just 5% once TVL exceeds $5 billion, reinforcing its commitment to sustainable growth.
Paxos emphasized:
“This design ensures that Paxos only succeeds when Hyperliquid succeeds, positioning USDH as the leading stablecoin for global DeFi adoption.”
Regulatory Advantage and Compliance Edge
Paxos also underscored its regulatory strength, noting it is the only company authorized to issue tokens in Europe under the GENIUS Act. To further enhance stability, Paxos will include PayPal USD (PYUSD) as part of USDH’s reserve assets.
Hyperliquid’s Enterprise Expansion
While Hyperliquid has largely catered to retail users so far, Paxos aims to elevate the platform into enterprise-grade liquidity infrastructure. By working with fintech firms and brokerages, Paxos plans to expand Hyperliquid’s reach through builder codes and open-market asset issuance (HIP-3).
In addition, Paxos intends to develop an “Earn” product powered by USDH, which would be integrated into consumer-facing apps. The company highlighted its track record of supporting major platforms such as Stripe, Mastercard, Robinhood, Nubank, Mercado Libre, and Interactive Brokers.
Competitors in the USDH Race
The bidding process has attracted stiff competition:
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Frax Finance has submitted a proposal to back USDH with frxUSD, supported by BlackRock’s BUIDL fund.
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A coalition of Agora, Rain, and LayerZero has pledged a 100% net revenue share while stressing neutrality.
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Ethena Labs and Sky have also put forward competing proposals.
This heated contest underscores Hyperliquid’s rising influence in the DeFi sector. The decentralized exchange began soliciting proposals last Friday, with submissions due by September 10. Validators will vote starting September 14, while the Hyperliquid Foundation will remain neutral.
